Bournemouth council's cabinet has agreed to continue its HR and finance outsourcing arrangements with its existing transformation partner, Mouchel, despite the company's financial problems. The transfer will take place on 1 February 2012.

The cabinet ratified the contract extension at a meeting on 6 January 2012 after considering an independent risk assessment based on Mouchel Group's audited financial statements for the year ended 31 July 2011.

It also considered an impartial review of the risk management and contract governance arrangements that are already in place.

About 100 staff from Bournemouth's HR and finance departments will transfer to Mouchel under Tupe rules.

John Beesley, council deputy leader and cabinet member for resources, said: "We are extending this contract having undertaken a great deal of background work."