BOURNEMOUTH council is set for a huge policy U-turn by bringing its outsourced services back in house after six years.

The move will be discussed at cabinet next week and looks to be another step towards the council merging with neighbours Poole and Christchurch - dubbed the south east Dorset 'super council'.

Amid some controversy, a number of services areas were handed over by Bournemouth to Mouchel in 2010 to deliver. These included revenues, benefits, ICT and facilities management, with human resources and payroll following later.

Mouchel was taken over by the Kier Group last year.

But now, after being told the government will again slash grants to Bournemouth, by around £14million in the next two years, council bosses say they need to take back control of all services.

Leader, Cllr John Beesley, said the authority needed to find savings of £14m in 2016/17 and £12m in 2017/18.

"There are even more difficult decisions needed beyond then and the council has no choice but to look further and deeper into departmental budgets to do all it can to protect frontline services.

"In this increasingly difficult financial environment, the council needs to control directly the £14m associated with the Kier contract."

Social care services now account for around 75 per cent of the council's budget.

The council is also warning that increasing existing charges for services and introducing news ones are likely and services may not be delivered at all in future.

The move, if approved by full council will result in more than 200 staff being transferred back to the council from Kier.

Councillors will also asked to formally shut down the Community Finance Initiative - the so called 'Bank of Bournemouth' which was set up to lend money to business and individuals. But it has only made a handful of loans and the CFI has cost the council £1m.

Mouchel's original 10-year deal came with a target of 40 per cent savings in the departments involved and a guarantee from Mouchel of 350 new jobs.

A review in 2013-14 claimed the company had created 126 new jobs, 99 of which would last for more than 15 months, set up a new 24/7 IT helpdesk and sped up the processing of benefit claims.

But there was no financial monitoring report in the public domain, while the council’s medium term financial plan suggested the projected savings had been revised down.

Three “section 151” officers – the post responsible for ensuring the legality of council finances – parted company with the council. The first, Judith Martin, was made redundant in 2010 amid claims she had been critical of the outsourcing plans.

Her successor, Stephen Parker, was suspended after emailing councillors in 2011 to say a report they were about to consider did not provide an adequate assessment of the risks involved with another Mouchel outsourcing deal.

Head of finance Liz Wilkinson left early last year, saying she had “serious concerns” about the outsourcing deal. A tribunal rejected her claim that she had been constructively dismissed for being a “whistle-blower”.