Serco will continue its contract with Lincolnshire County Council until 2022.
Senior councillors have signed off on a renewal of the company’s service for a further two years.
It means that the firm will continue to provide IT, payroll, HR, customer services, exchequer services and adult care finance for the authority. But services such as Freedom of Information, complaints and information governance and the Agresso payment system administration will be taken in-house.
The current five-year contract with Serco is due to expire at the end of March 2020. It had been beset by problems which led to the authority reconsidering its services. In December 2015, hundreds of public sector staff were left unpaid following an IT error which resulted in the company apologising to workers and being fined £2million.
Both senior county councillors and members of the authority’s overview scrutiny panel have now backed an extension.
Council chief executive, Keith Ireland, also said that “his neck is on the line” to deliver the contract. He said that the company is as “good as anyone” to provide the service.
Council leader, Martin Hill, said: “I do think that it is a sensible way forward and we would expect Serco to deliver.”
He added that it was right for the council to bring some services in-house.
The council had the opportunity to enter into a shared service agreement with Herefordshire County Council to deliver payroll. But, officials turned the agreement down after they said they “could not influence” the service going forward.
Coun Richard Davies, executive member for highways and IT, felt there had been a difference in the contract in recent months.
“The performance of Serco has improved and there is a risk of moving to a new provider at the moment,” he said.