Two councils are set to renew the contract of a shared services company criticised last year in a peer review.
Local Government Association reviewers said last April that Compass Point Business Services - owned by East Lindsey and South Holland DCs, which LGA chair Lord Porter (Con) is leader of - “needs specific attention in the immediate term to address issues” as it was perceived to be opertating “in a vacuum”.
Compass Point was set up in 2010 with a 10-year contract to deliver back office services and was expected to win business beyond its two parent councils.
But a council report from earlier this year noted that only “a small number of low financial value contracts are also delivered to other organisations”.
East Lindsey this week confirmed an earlier decision - also endorsed by South Holland - to extend Compass Point’s contract for five years from 31 July with an option to extend it for a further five years.
This will differ from the original contract by the addition of two non-voting outside expert directors and creation of a partnership group to resolve disputes.
The councils called in accountant Grant Thornton which said there remained further opportunity for financial efficiencies amounting to 12%, which would be equivalent to £614,000 for East Lindsey. A figure was not provided for South Holland.
Compass Point provides information technology, human resources, revenues and benefits, customer services and finance services.