YORK council looks set to pull out of a multi-million pound partnership aimed at getting local government services online.

Under ambitious plans to transform computer systems across the county, residents would be able to make one-stop phone calls, send emails or make interactive internet calls to deal with bills, benefits and planning queries.

IT firm Agilisys was chosen to look at how this grand vision could be delivered across North Yorkshire.

But now the York company looks set to be dumped by City of York Council amid growing concerns about contract costs and doubts over whether it can come up with the goods to meet a December 2005 "e-government" deadline.

Agilisys has not "cleared necessary hurdles" to enable officers to recommend a ten-year contract be signed, a report to the City of York Council executive states.

Resources director Simon Wiles said a contract would lead to a "high risk and unaffordable costs".

The IT partnership, opposed by Unison, started as a £276 million deal involving nine North Yorkshire councils. That fell to five when a raft of district councils dropped out. York, Ryedale and Richmondshire have now followed, leaving Hambleton and North Yorkshire to proceed in the scaled-down project to buy hi-tech equipment and services.

The city council today said it intended to continue with plans to create a one-stop call centre dealing with 80 per cent of inquiries. But it said the Agilisys partnership could not continue after expected savings were not identified and £650,000 government funding was lost.

The executive report states that if the deal went ahead York would roughly pay between £8.8 million and £10.3 million-plus over ten years.

Officers said those figures were "higher than expected" and also raised concerns about lack of local government experience among the Agilisys team, extensive personnel changes and errors in pilot phases.

But Chris Sellers, Agilisys local government director, said: "E-government is about improving services to citizens. Some councils felt the savings were not sufficient to make the investment necessary.

"It is up to individual councils as to how they decide to proceed with achieving the national e-government targets and North Yorkshire County Council and Hambleton District Council both believe this investment is worthwhile and are continuing to work with Agilisys."

James Drury, head of public services at York council, said the authority remained committed to delivering a one-stop contact centre and improving customer access.

Councillors will make a decision on Tuesday.

Updated: 11:12 Friday, October 08, 2004