Sharing back office services, including IT, has saved councils £75 million over the past year, according to the Local Government Association (LGA).
Many local authorities are now sharing ICT services, including a number of councils in the East Midlands, Devon, Essex, Kent and Yorkshire, among others.
The back office savings represent 21 percent of the total savings of £357 million that councils have saved in the past financial year, 2013/14. It is the most significant area of savings for local authorities, after shared environment, waste and transport services (£84 million).
The LGA’s latest shared services map shows that the total saved by local authorities sharing their services has increased by £83 million since 2013.
LGA figures show that 96 percent of councils share services with other local authorities and public sector organisations. There are now 337 councils involved in 383 different shared service arrangements, the map shows.
The LGA found that shared service arrangements are growing fastest in London and the south-east, at a rate of 26 and 37 arrangements respectively in the last year.
In London, for instance, there are ICT sharing arrangements in place in Kingston and Sutton councils and the London tri-borough of Westminster City Council, the Royal Borough of Kensington and Chelsea, and Hammersmith & Fulham Council.
Councillor Peter Fleming, chair of the LGA's Improvement and Innovation Board, said: "At a time when local government funding has seen huge cuts, it is positive to see how much councils have saved taxpayers by sharing services and how many councils have adopted this approach.”
He added: "Even despite the massive cuts local government has faced, it has continued to be the most efficient part of the public sector and councils have worked hard in the face of this to deliver vital services.
“As councils continue to explore ways to share services and provide the taxpayer with value for money, we are optimistic other areas of the public sector will be inspired by the shared services map and follow the example set by local government."