The borough council is to share services with another council in a bid to save more than £7 million in the coming years.
It will share payroll, human resources (HR) and training services with East Riding of Yorkshire Council from 2015 under the proposals that were approved by its cabinet, last week.
Subject to the completion of due diligence and the finalisation of a plan for implementation it is hoped that the shared system will go live on April 1 2015.
Further due diligence is to be carried out to see if there are other services that could be shared between the two councils.
Councillor Tom Fox, leader of Scarborough Borough Council, said: “We continue to face challenging budget savings targets. Sharing services with other public sector organisations can provide the opportunity to deliver efficiency savings through economies of scale and sharing systems and systems support costs.
“We look forward to progressing with our shared services plans with a view to maximising benefit for both authorities and the communities we serve.”
The report, which went before Cllr Fox and his cabinet, says that more work needs to be done but the benefits service could be the next stage of the sharing arrangement.
It stated: “The shared service proposal is for full back office processing of benefit claims and customer call centre facilities, but Scarborough Borough Council will retain a local front office presence for face-to-face enquiries and first point of contact.
“Scarborough will retain employment of any staff and these staff will not transfer between employing organisations.”
A report on the benefit service is scheduled to come before the cabinet in October.
Councillor Stephen Parnaby OBE, leader of East Riding of Yorkshire Council, said the shared services have ‘great potential to be mutually beneficial for both authorities’.