Surrey Police Authority has withdrawn from a £1.5 billion shared service contract which would have seen its IT and other services privatised.
With the support of the government the authority had previously jointly advertised contracts with the West Midlands Police Authority. However, in July Surrey suspended it's involvement in any deal.
That suspension came after one of the six main contractors in the frame, G4S, became embroiled in the Olympics security fiasco, when it failed to provide a enough security staff for the games, and the armed forces had to be brought in to help protect the event.
At a public meeting Surrey Police Authority confirmed its withdrawal from the Business Partnering for Police Programme. At its previous public meeting in July, the Authority decided to suspend its involvement in the partnering programme and indicated that it was minded to withdraw entirely.
However, members of the Authority agreed that no final decision on withdrawal should be taken until a paper setting out the financial and legal implications of withdrawal could be presented and discussed in public.
Authority members had raised particular concerns around the impending arrival of new police and crime commissioners (PCCs) which will be elected this year and "whether it would be right to continue to spend money on a programme with an increasingly uncertain future".
The Authority said, "Potential PCC candidates are now actively campaigning to put a stop to the Business Partnering for Police Programme and the Authority agreed that it would be not be prudent to continue to invest Surrey tax payers' money in a programme that seems unlikely to be brought to a fruitful conclusion."
Surrey Police will still have to pay £160,000 towards the total costs of the programme so far, which currently stands at £800,000, with the Home Office and West Midlands Police making up the balance.
The Unite union has campaigned against the Surrey deal and similar proposed contracts across other police forces, warning that such deals represented the "privatisation of the police". It welcomed Surrey's decision to pull out.
Unite is now calling for any police authority "considering privatisation to abandon its plans and for the home secretary to rule out the privatisation of police services".
Unite national officer Peter Allenson said: "At last good sense and wisdom has prevailed over sheer madness. The fiasco at the Olympics caused by G4S was a warning of the potential disastrous consequences of privatising parts of the police. We now expect the West Midlands police authority to do the same."
Police forces are facing a 20% cut in central government funding, and Surrey and West Midlands forces were looking to outsource services to help make up for the shortfall.
Three police authorities in the UK are still considering outsourcing their organisational support services to G4S, despite it coming under fire for under-supplying security staff for the Olympics.
Bedfordshire, Cambridgeshire and Hertfordshire have said that they plan to continue developing a business case that will consider outsourcing the services to G4S, which include IT and human resources.