Staffordshire Moorlands District Council (SMDC) and High Peak Borough Council (HPBC) expect to save the money by implementing e-tendering, renegotiating existing contracts and expanding the use of electronic procurement systems, among other IT modernisations.
The authorities partner with technology services firm Northgate, which was contracted to conduct a review and came back with several suggestions on how to modernise procurement activities through IT.
Northgate will implement a number of the procurement exercises on behalf of the authorities. The firm “has committed to put its fees at risk if efficiencies are not achieved”, according to the councils’ shared executive director and chief finance officer Andrew Stokes.
Both councils already work with Northgate thanks to a £6 million, seven-year desktop ICT contract signed with them and two other local public sector bodies in 2010.
They share a chief executive and senior management teams and a wide range of functions, including ICT, customer services, waste, housing, finance and human resources.
They claim to have saved a total of £620,000 a year since then by implementing their shared services strategy, and have said they are examining how to achieve further efficiencies and savings.
Sharing services with other public bodies has become a popular mechanism for councils trying to cope with unprecedented funding cuts. Figures released by the Local Government Association last May show 96 percent of councils in England share back office services such as IT.