London Borough of Lewisham has extended its current payroll and human resources software contract without a tender.

The council has announced that it would stick with supplier Northgate Arinso for a further two years to cover the period up to the launch of a proposed shared ICT service it is planning with London Borough of Brent.

It said that changing supplier before the new service goes live in April 2016 would ‘neither be advantageous or cost effective”.

In a statement, it added that “changing supplier at this stage would require a significant period of testing and parallel running of systems. Given it is now the beginning of December it would not be possible to achieve the testing and parallel monitoring in the time-scale allowed.”

Related content

Councils to merge finance ICT
Case study: Immediate savings for Poole Borough Council

In addition, council officers will not have absolute clarity about the requirements and future direction of the payroll and HR information system until the new shared service starts, it said.

The value of the two year extension is £374,000.

Lewisham said that the shared service will allow it to bring its ICT services in house, resulting in a cost saving on its revenue budget and improvements to its technology infrastructure, which is currently provided by Capita.

Last month, a report to Brent councillors estimated that the council would save more than £1m a year over current costs through the new arrangements. Brent has already agreed a target of reducing its overall IT spend by £1.62million a year.

Other London councils – including Newham with Havering and Kingston with Sutton – have already agreed similar deals. In September, Islington and Camden announced plans to merge their services.