Purpose

A Shared Services Agreement for Transaction HR/Payroll Services (the ‘Agreement’) has been operating successfully since April 2012. This is a collaboration under the terms of the Local Government Goods and Services Act (1970) that allows for a ‘not for profit’ agreement with two local authority partners. The terms of the agreement allow for fees to be recovered that reflect the costs for the service and for each partner to share future savings for the benefit of the joint service and the wider community.
The current agreement has been operating since April 2012 and delivers a good standard of service, providing value for money for all payroll, recruitment and training administration requirements to the Council, St Leger Homes and schools / academies. Over this time a strong client / contractor relationship has been established which enables the efficient and effective operation of the Agreement. There was a service review undertaken in 2015 which also included a number of benchmarking and cost review exercises including a service charge check to provide a validation to the annual service charge level.
The current agreement concludes in March 2026.
Other alternatives were considered as outlined below but following outcomes from the review and further discussions with key personnel within the Council, the option to renew the Agreement with Rotherham was determined to be the most viable option that would ensure continued delivery of the service and achieve value for money.
The schedule of services has been reviewed and details agreed with both parties. This covers financial, procurement, staffing and performance information, the approach to service delivery and service deliverables. It also covers the specification overview of the new HR / Payroll service. The contract also covers ensuring an exit strategy is in place as well as agreement to associated exit costs for the system should the contract be ended. The exit costs are agreed on the same 60/40 split as the overall contract.

Decision

To continue Shared Services Agreement for Transactional HR / Payroll services between Doncaster Council and Rotherham Council for a period of 10 years (1st April 2026 to 31st March 2036) with a review built in annually.
The previous agreement was set for 8 years and is due to conclude in March 2026. This ODR covers the rationale behind the new agreement which will run from 1st April 2026 – 31st March 2036, with a review built in annually

Alternative options considered

There were two main alternatives:-
• Bring the services back in-house. This would have involved staff from Rotherham
transferring back to Doncaster under TUPE and finding an alternative HR/Payroll supplier
• Engage another organisation to provide the services on behalf of the Council and TUPE transfer staff from Rotherham to the new provider.

Neither of these options were viable given the time constraints involved; the potential for any agreed contract to be significantly more expensive than the current agreement; the high level of risk in jeopardising the provision of the payroll service; the adverse impact on staff in relation to organisational change and the potential for payroll / recruitment and training administration services to be significantly disrupted.