This study delves into the intricate internal dynamics of the Norwegian Labour and Welfare Administration (NAV), tasked with delivering comprehensive welfare services through state-municipal partnerships. While NAV's mandate promotes empowered local offices and holistic services, realising this can present significant challenges. Our ongoing research focuses on an organisational development process within a NAV office in a city district in Oslo marked by alarming school dropout rates and substantial social budget expenditure. We ask whether the state-municipal partnership aligns with the municipal agenda. Methodologically, we employ a qualitative approach encompassing individual and focus group interviews and observations over an extensive period. Our exploration of municipal perspectives and perceptions regarding the state partnership and daily collaboration unveils hurdles to comprehensive service delivery. The findings illuminate the challenges to local collaboration that can arise from merging cultures and service functions, resulting in tensions in understanding roles, employment codes, and service delivery systems. NAV State’s absent role in addressing dropout rates in the district is noteworthy. The study underscores the pressing need for customised, integrated services tailored to individual needs and bolstering internal social work capabilities. In conclusion, the paper discusses some aspects of the local partnerships that might impede offices from harnessing organisational resources effectively, delivering holistic welfare services, and aligning with ambitious social work agendas.