Local government IT leaders fear that key e-government projects could be abandoned after the government announced the end of central support for the £100m National Projects scheme.
Last week the Office of the Deputy Prime Minister, which runs the National Projects programme, said ownership of the projects - which include CRM, smartcards and e-procurement - would be handed to their lead authorities at the end of the year.
"It will then be for each lead authority to decide if it wishes to share this opportunity with any other members of the National Project board or with existing or new commercial partners," the ODPM said. The National Projects were designed to provide the building blocks to help councils deliver local e-government services.
To avoid duplication of effort between councils, one local authority was appointed to lead development for each project.
If a lead authority does not want ongoing responsibility for a project, it could be offered to other public sector organisations or the private sector, but if no one takes it on, the project will be discontinued, the department said.
Kate Mountain, chief executive of public sector IT directors group Socitm, said some lead councils would not want to develop projects and valuable work could be lost if no one steps in to support them.
"It is more simple for the ODPM to focus on new initiatives and not have any residual responsibility for this one," she said.
It will now be up to Socitm, the Local Government Association and its Innovation and Development Authority to put together a plan to support the National Project scheme, Mountain added.
A spokesman for the ODPM said, "A central body was not viable in the longer term - in effect we would have created a small consultancy/software house, which would not be well placed in a competitive marketplace. Neither did we want to outsource products to the private sector when so much public sector resource has been invested in them. Offering products to the lead authorities was the preferred option."
The handover of National Projects will not take place until December, and for the next year the ODPM will support projects with £3.5m funding via the National Project roll-out programme .
"Having invested almost £100m in the National Projects programme, we can hardly be accused of not giving them tangible backing," the ODPM spokesman said.
What is the National Projects scheme?
The National Projects provide the building blocks to help local authorities in England deliver local e-government.
The principle "build once, use often" underpins the development of National Projects products, which are designed to be taken up by any local authority interested in achieving service improvements and efficiency savings.
These saving will be required by all authorities as the Gershon Review comes into effect.
A report by Capgemini on six of the National Projects estimated that the average annual benefits for English local authorities were £320m in cost savings and £1.3bn in "service improvement".