Agenda item

The Committee received the Xentrall Annual Report 2025/26. Xentrall operated design and print services, processing and systems for finance and HR, and ICT services for both Stockton-on-Tees Borough Council (SBC) and Darlington Borough Council (DBC).

The report outlined how the service had performed, key achievements, and future work for the service. Key points highlighted were:

• SBC and DBC had maintained a rolling annual agreement with Xentrall since 2015, following exceeding its original cost reduction target when established in 2008.
• While SBC and DBC where the two main customers of Xentrall, they also had external customers which generated £1.2million in business.
• Short term staff issues led to a dip in performance for payment of creditor invoices at the start of 2025-26, however this was recovered and performance standards regained by Quarter 3.
• The service had achieved green assessment in the Red/Amber/Green rating system in most of the control checks undertaken by Internal Audit
• It had also maintained certification in the ISO Standards 27001 (Information Security Management) certification and 9001 (Quality Management), and the BACS Accredited Bureau status was maintained. It also was re-certified for continued access to the Government’s Public Services Network (PSN).

Members questioned the measurable continued savings to the Council. It was explained that Xentrall was funded through a management fee shared between the two councils, with SBC contributing approximately 60% and DBC 40%. A specific figure for continuing savings was not available as savings were achieved by avoiding the costs that would be incurred if each council operated these services independently. Since the delivery of the initial £14 million savings, the management fee had effectively remained frozen, with annual increases limited to staff pay awards, while the impact of inflation has been absorbed by Xentrall.

The cost of ICT hardware and software was discussed. It was noted that there had been a global shortage of components for ICT due to the demands of creating Artificial Intelligence (AI), and this had driven up prices not only for laptops, but other items required for infrastructure. Members questioned what was being done to mitigate the risks of rising costs and were informed that design work had been ongoing on the replacement of the platform hardware (servers), which was replaced every five years reflecting the industry standard. In addition, procurement to buy new kit was brought forward before prices increased further, and some kit was repurposed by upgrading the components within. This had saved approximately £500,000 on what it would possibly have cost over a five-year period.

Members raised cybersecurity, and the officer noted that there was a dedicated cybersecurity team in place as well as a contract with a security company to provide 24-7 monitoring service of the whole network. The company either blocked any attacks at source or alerted the team who were on call. Xentrall also worked with the Governance team to carry out phishing simulations to increase awareness with staff of some of the issues the network was facing.  

Members also raised the use of AI. Officers noted that Customer Services systems used an element of AI and some social work teams had been testing AI transcription tools, such as Magic Notes, to assist with their note taking and improve efficiency. However, there were limitations to these, and AI would not be making decision on the care of adults and children. The Microsoft applications used by the Council also had AI built into them which staff were able to use to improve efficiency, however some elements had been turned off by Xentrall and boundaries had been drawn to mitigate any risks to information.

AGREED the Xentrall Annual Report be noted.