MAKE It York is set to have its contract with the council renewed - but some of the tourism body's responsibilities will be taken away.
As a result, the contract budgets will be adjusted, a City of York Council report says.
The council will take over the company's responsibilities for inward investment - helping to bring new businesses to the city - and economic development, which aims to promote York as a business location.
Most businesses and organisations support the role of Make It York, according to a survey by the council, but some had concerns.
A report says: "It is clear that the company model is not well understood and that it is not perceived to be accountable and transparent.
"It is felt to be involved in too broad a range of activity as a result of which quality of delivery is seen to be inconsistent."
It said there is support for the council to take over some functions - but Make It York will still be responsible for markets, events, culture, tourism and the city centre.
Cllr Andrew Waller said the changes ensure the expertise of both Make It York and the council can be used to benefit the city.
Cllr Claire Douglas said she has challenged the role of Make It York and is pleased to see proposals for inward investment to be brought back under council responsibilities being adopted.
The report, prepared for a meeting of senior councillors next week, says: "In view of the transfer of functions from Make It York back to the council [...] the final value of the new contract and the revenue support to be provided by the council will be adjusted."
The budget will be shared with senior councillors when it is agreed but is not detailed in the report.
Cllr Andrew Waller said: “We saw during the pandemic the benefits from bringing teams together to respond to the needs of businesses and individuals, and these proposals will help to bring together economic development in one place to have maximum impact to help the recovery.
“These changes aim to ensure that the expertise at Make It York works closely, council’s development strategy and in tandem with the private sector.
"It also ensures that the respective strengths of Make It York and the council can be used to their best effect on behalf of the city.”
Greg Dyke, chair of Make It York, said: "The proposed new service level agreement with City of York Council focuses on the development of Make It York's work supporting the city's tourism industry, delivering the culture strategy, creating a world-class events programme and operating Shambles Market.
"With a clear strategic focus on these areas, we are in a strong position to help support York's tourism, retail, hospitality and cultural sectors as we move into the next key stage of economic recovery.
“Inward investment and business support will continue to be a clear priority for the city's economic development and the vital expertise and experience of the Make It York team is proposed to merge with City of York Council's Economic Growth team to really strengthen York's future.
"A huge thank you to colleagues within this team for all their hard work to date in supporting York's business community, particularly during the last year.
“I'd also like to thank City of York Council for their ongoing support and all partners and businesses across the city who have been involved in the consultation process. Throughout, the process has been hugely collaborative and we look forward to continuing to work together to ensure that York bounces back strongly from the challenges created by the pandemic."
Cllr Claire Douglas, responding to the plans, said: “The economic growth function is essential to the city’s recovery from the Covid19 pandemic and ongoing, critical approach to growing businesses, creating jobs, and improving residents’ lives.
“This is why Labour has been challenging the lack of focus in this area for years under Liberal Democrat control of the council. So we’re pleased to now see our proposal for this function to be brought back in-house being adopted by the council’s ruling parties, where they can be much more accountable for performance, be it good or bad.
“Having functions operate outside the council can work in some circumstances, but not if the council steps back and fails to hold an external organisation to its contract, as has been the case for years with Make it York”.
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