Purpose

The Orbis Partnership arrangement between Brighton & Hove City Council (BHCC), East Sussex County Council (ESCC) and Surrey County Council (SCC) was set up to deliver shared services under the principle of economies of scale, value for money and standardisation of services. It is managed and overseen by a Joint Management Board (JMB) comprising a senior officer from each Partner, who meet regularly to review performance and strategic alignment.

In spring 2025, the JMB commissioned impartial service reviews, informed by internal and external insights, which revealed opportunities for improvement and recommended alternative service delivery models appropriate to each service reviewed.

Cabinet agreed in January 2026 to consult staff on the preferred option to exit Orbis arrangements for IT&D, Procurement and Internal Audit services and revert to sovereign operating models, exiting the Inter Authority Agreement in August 2026. This report provides an update on the staff consultation findings and seeks a final decision to end the Orbis arrangements for these services.

Transitional arrangements are being established through a phased approach to implementation. The main changes for line management of Internal Audit, Procurement and IT&D staff will take place on the 1st May, with a period of supported transition taking place across the weeks leading up to the conclusion of the Orbis Partnership and formal termination of the IAA in August 2026. Any buy back arrangements to support longer term provision that are yet to be articulated by BHCC and ESCC will be given consideration as part of the transition planning and approved via the Deputy Chief Executive as they arise. In addition, a simpler set of arrangements with BHCC and ESCC are being developed to maintain the existing Treasury Management, Insurance Policy and Insurance Claims Handling functions that are provided to SCC.

The transitional arrangements are designed to minimise disruption. There are no redundancies for staff within SCC as a result of these arrangements. TUPE transfer will apply to 1 member of staff leaving SCC and 3 joining SCC. The Cabinet paper which set out the staffing and financial impacts remain unchanged.

The IAA will be mutually terminated, and an operational exit plan will be agreed, detailing capability and technical dependencies such as how system separation and access will be arranged and agreed. The exit plan and transitional agreements will be monitored via the Joint Management Board and the Director for Customer, Culture and Transformation on behalf of SCC as the accountable officer for SCC Orbis arrangements. The project team established will continue to support the exit until the project and Orbis arrangements conclude at the end of August 2026.

The completion of staff engagement and consultation processes across the services operating under the Orbis Partnership, informs this decision in line with the appropriate due diligence. Staff and trade unions were consulted and able to raise questions and suggestions regarding the proposals. Feedback was limited in volume, largely constructive, and focused primarily on job security, continuity of service, clarity of line management and transition arrangements. Assurances were provided that there would be no job losses, changes to salary grades or contractual terms, that services would continue without disruption, and that transition planning is underway. Where feedback suggested improvements to structures or reporting lines, proportionate amendments were made within the scope of the review. To ensure uninterrupted service of an external Internal Audit contract, it will be novated from ESCC to SCC for delivery. Overall, no material issues were identified that would prevent progression to final decision?making, and the consultation outcomes support the proposed transition.

In summary, this report seeks authority, in accordance with the delegation, to execute the recommendation agreed at Cabinet and revert the Internal Audit, Procurement and IT & Digital services from the Orbis shared service arrangement to sovereign Surrey County Council services and wind up of the Orbis shared services partnership.

Decision

It was AGREED that:

1. Surrey County Council will exit the Orbis Partnership arrangements for Internal Audit, Procurement and IT & Digital services, and revert these services to sovereign Surrey County Council delivery models.
2. Transitional arrangements will be put in place with Brighton & Hove City Council and East Sussex County Council, where necessary, to support continuity of service, systems and specialist capability during the implementation and stabilisation period. Additionally, new arrangements will be put in place to maintain the existing Treasury Management, Insurance Policy and Insurance Claims Handling functions.
3. Authority is exercised to enter into, vary, and conclude any required agreements, including transitional arrangements and exit documentation under the Orbis Inter?Authority Agreement.
4. The implementation of the decision will proceed in line with agreed programme governance, workforce processes and legal requirements.

Reasons for the decision

• Independent reviews of Internal Audit, Procurement and IT & Digital services demonstrated that, while Orbis has delivered historic value, the shared service model no longer sufficiently supports the divergent strategic and operational priorities of the partner authorities.
• Benchmarking indicates a clear sector trend away from large?scale shared service models for these functions, particularly IT & Digital and Procurement, in favour of sovereign models that provide greater agility, accountability and strategic alignment.
• A sovereign model best supports Surrey County Council’s future requirements, including delivery of Local Government Reorganisation, while protecting governance, resilience and decision?making clarity.
• The consultation process provided further evidence to inform the assessment of risks, costs, workforce impacts and implementation considerations.

Alternative options considered

The following options were considered and discounted due to issues including strategic misalignment, governance complexity, insufficient partner appetite, or increased risk and cost:

• Maintaining the Orbis shared service arrangement.
• A hosted and traded model.
• Creation of a Local Authority Trading Company (LATCo).
• Creation of a Public Service Mutual, Joint Venture or Joint Committee.