Newham and Havering councils in London have set up a joint ICT support service to save money in the face of government central funding cuts.
The shared service agreement has been formally signed after a one year trial. The partners say the trial has already led to savings in recruitment, support and procurement costs.
The joint venture aims to save £4m for Havering and £7.5m for Newham over the next four to five years.
The main savings are expected to be made in procurement, as software licences, support and hardware can be purchased in bulk. There is also knowledge and skill-sharing.
This agreement is part of the East London Solutions partnership, which consists of the East London boroughs of Havering, Barking and Dagenham, Newham,
Redbridge, Waltham Forest and Tower Hamlets. They have all agreed to identify joint areas of work to deliver efficiencies.
Councillor Michael White, leader of Havering Council, said, “This shared service agreement is a great example of where we can make significant savings without cutting front line services. Across the council we have found £19m of savings projected over the next three years and we are continuing to look at how we can make the council more efficient and cost effective."
White said the agreement was not about merging services but looking for opportunities where joint working can offer significant benefits for the authorities involved.
To deliver the benefits though, a joint service team has been created under the leadership of Geoff Connell, Havering and Newham's joint head of ICT. His team will be created from existing staff to support the two borough's ICT support systems, which includes updating and consolidating them.
Mayor of Newham, Sir Robin Wales, said, “In terms of grant funding Newham is being hit harder than any other London borough, so we have to make considerable savings. By entering into this agreement Newham expects to save around £7.5m over 5 years."
Wales said the pair were hoping to attract other boroughs to join the deal, in an attempt to make even greater savings.
Three other councils in West London recently announced they planned to merge their services in light of the government’s Comprehensive Spending Review. Hammersmith & Fulham, Westminster City Council and Kensington & Chelsea said that they were looking to share "every major service" in order to avoid cuts to frontline services.