A PRIVATE firm has lost responsibility for some of the services it provides for Blackburn with Darwen Council following a review.

The decision follows a review of the authority's 15-year partnership with Capita, which was signed in 2001, and the renewed deal is now worth £10million a year, a reduction of £2million.

Simon Pilling, executive director of Capita, said the result of the review was a refreshed, modern partnership which would continue to optimise service delivery in the borough.

And council chiefs stressed the partnership had been good for the borough, and saw the creation of 720 new high-end jobs, and the opening of a £10million business centre in Barbara Castle Way, Blackburn.

But a senior councillor admitted the partnership had evolved into a "boss and contractor" type relationship with the typical frictions that follow.

The council will take back the administration of finance and management, adult social services and children's services, human resources consultancy, and customer services for revenues and benefits.

Council chiefs said taking back social services and children's services was necessary because of a restructuring at the council which saw education and children's social services merge in April 2006. A new adult social services department was also created at the same time.

In customer services for revenues and benefits, a restructuring also meant it now made more sense for the council to control this area, said bosses.

They said the council was taking back the human resources consultancy because it had realised it was too important a service to outsource, and there was a view that organisational development needed to be driven from within.

The explanation for finance administration and management being brought back to the council was that tighter regulations meant the council now needed full control in these areas.

It is understood the move is likely to affect around a fifth of the 500 jobs that moved to Capita in 2001, which will return to the council.

Services to remain with Capita until 2011, when the next review is planned, include council tax and business rates administration and collection, recruitment and payroll, IT services, property management, architectural services, civil engineering, and printing.

Council leader Kate Hollern said the partnership had been good for the council, and good for the area.

She said the partnership was now in a stronger position to carry the arrangement forward for the coming decade.

Mr Pilling added that the partnership was an excellent model for partnership between private and public sector bodies.