Worcester City Council has just issued the following statement, reproduced in full, on the proposed merger with Malvern Hills District Council. More news and comment will follow soon.

AS today's statement from the Leader of Malvern Hills District Council makes clear, the majority Conservative Group at Malvern have decided that they cannot support the commissioning of a business case that includes the option of bringing our two organisations together.

We were formally informed of this development in writing yesterday. Accordingly the joint Chief Executives report on the agenda for Wednesday's City Council Cabinet has been withdrawn.

The Leader of the City Council Simon Geraghty said: "it is very disappointing that at this late stage Malvern Hills have indicated that they do not feel able to commit to the commissioning of the business case to explore the benefits and risks to both Councils of closer collaboration."

"The preparation of a business case did not constitute a decision by either organisation to come together at this stage. What it would have done is clearly show the financial savings and service improvements that would flow from a range of different options to enable a decision on the way forward to be made in the Autumn."

Chief Executive, David Wareing said: "Worcester was up for this as a way forward but it appears when it came to the crunch Malvern Hills were not. This is most disappointing but it is better to find out now that Malvern Hills were not prepared to see this project through than for them to withdraw much later in the process."

The City Council will now review its options in the light of the continuing need to reform the present two tier system of local government; the requirement set by Government to find savings and efficiencies; and the severe financial problems facing the Authority.

"I have made it clear all along that the City Council faces some stark choices" said Councillor Geraghty. "Our funding falls well short of that necessary to provide the range of services that you would rightly expect of a County town. That is the underlying reason for our difficulties. Given that scenario we either find ways through shared and collaborative working to greatly reduce costs whilst sustaining services or we will be forced to make hard decisions about what services we can continue to provide.