County councillors to consider dropping Serco after payroll chaos

Debate in the chamber at Lincolnshire County Council. Photo supplied.
Debate in the chamber at Lincolnshire County Council. Photo supplied.

Lincolnshire County Council’s executive is to consider how its payroll and other support services will be run beyond April 2020 when its controversial contract with Serco ends.

The executive will be looking at whether to extend the contract with Serco for some or all of the support services they have been providing since April 2015.

The contractor hit the headlines when Serco’s new Agresso payroll systems caused havoc for hundreds of staff, schools and even the fire service with suppliers’ payments and employees’ wages and pension pots being wrongly paid or not paid at all, with issues running on for months afterwards. Schools struggled to balance the books and set business plans for the year ahead.

The company was fined over £1m by the council two years ago for the administrative errors after Serco won the £70m, five-year contract in 2015 to manage financial and personnel services for the county council.

Serco said at the time it was “fully committed to putting things right”. All staff eventually received their correct pay, although some were said to have suffered hardship and anxiety through missed payments on bills.

One of the initial recommendations is that from 2020, the council enters a shared service arrangement with Herefordshire County Council, for the council’s payroll and Human Resources administration, through its wholly-owned supplier - Hoople.

The recommendation is also to use Hoople for the council’s access to the Business World On! system (formerly known as Agresso) for the council’s finance functions.

Richard Wills, interim chief executive at the county council, said: “Our contract with Serco has saved the council money and some services have been run effectively. However other services such as our payroll function, have not been run as we expected. It’s right that we now look at how the market has changed since the beginning of the contract in 2015, and what our options are going forward.

“The option to enter a shared service agreement with Hoople is recommended to give the council increased confidence in its payroll arrangements by partnering with an organisation who specialises in local authority payroll.

“Although we are two years away from the end of the contract, we are looking at all the different options so that any changes will be well-managed. No decisions are being taken at this stage about other support services such as IMT, our customer service centre, and various finance support services while those options are explored in more detail.”

The council has the option of extending the contract with Serco for a further four years from April 2020. The recommendation to enter a shared service arrangement with Hoople would be subject to further work and a satisfactory agreement with Herefordshire County Council.

A report outlining the recommendations will be considered by the council’s overview and scrutiny management board on Thursday April 26 before a decision is made by the council’s executive on Tuesday May 1.