A meeting of the cabinet at London Borough of Brent last week approved plans to create the joint function with its south London counterpart Lewisham.

In a report to councillors, officers estimated that following a restructuring, Brent would save more than £1m a year over current costs. Brent has already agreed a target of reducing its overall IT spend by £1.62million a year.

Michael Pavey, Brent's deputy leader, said "This is an absolutely ground-breaking deal. It will save a huge amount of money whilst safeguarding an outstanding service.

“The Government have slashed our funding in half, but through creative work like this we can protect essential services for residents."

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Other London councils - including Newham with Havering and Kingston with Sutton – have already agreed similar deals. In September, Islington and Camden announced plans to merge their services.

Under this deal, Brent and Lewisham will create a shared ICT services from April 2016, with Brent acting as host authority.

The arrangements will be governed by a joint committee with two elected members from each council overseeing a shared management board.

A joint head of digital services will be appointed before the merger in order to prepare for the shared service.

The shared service will be looking to provide services to more organisations going forward in order to reduce costs even further, the councils announced.

Under a separate arrangement already in place, Brent Council provides ICT services to the Local Government Association.