COMMERCIAL: A North East trust has announced it is outsourcing payroll services to a trust in Lancashire, affecting up to 37 members of staff.

South Tees Hospitals Foundation Trust is transferring its payroll, accounts payable and accounts receivable teams to East Lancashire Financial Services – part of Calderstones Partnership Foundation Trust.

The contract, which will begin in April, is part of wider efforts to save South Tees £90m over three years.

The 37 full and part time employees who will be affected by the decision were informed two days before Christmas.

While staff will be subject to the transfer of undertakings protection of employment regulations, the trust has conceded that moving to Lancashire “may not be a viable option for some staff”.

Tricia Hart, South Tees’ chief executive, said the trust would work with these employees to look for alternative roles within its organisation.

Professor Hart said it would “not normally want to make such an announcement so close to Christmas”.

“However, in our discussions with staff over the last three months they have made it clear that they wanted to know about any decision on the future of their services as soon as it was made,” she added.

She said the trust board had given “detailed consideration” to a proposal from staff to keep services in-house, but “unfortunately it did not offer the same benefits as the outsourcing option”.

In papers from a board meeting last October, Calderstones said the contract was worth £850,000 a year and that winning it would “put [East Lancashire Financial Services] back into an annual recurring surplus position from 2015-16 onwards”.

Calderstones and East Lancashire Financial Services declined to comment on the contract win.