Westminster Council has today announced a network IT contract with BT that may see it saving £30m on its HR and finance systems.
BT is calling the deal a "radical redesign of corporate human resources and finance services across three authorities", and hopes the deal - which will initially run for four years - could be extended to a maximum of eight.
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BT says it will replace older computer systems in both departments, while giving managers and staff "the latest technology tools". The telecoms provider also plans to cut "duplication and red tape... allowing a close relationship with one company as service manager".
Hammersmith and Fulham's cabinet is due to meet on 11 February 2013 to select services from the agreed framework, with Kensington and Chelsea following suit on 21 February 2013.
Councillor Melvyn Caplan, Westminster City Council cabinet member for finance and customer services, said: "This deal is all about back-office efficiencies which enables us to protect and preserve our front line services.
"In the current economic climate, this type of transaction, which provides outstanding value for money, is crucial for Westminster council to enable us to meet our demanding financial targets. I'm confident it will lead to a more efficient service for the people our councils serve, so it really is significant beyond the world of the council office."
Westminster Council's COO, Barbara Moorhouse, said: "Our partnership with BT will allow our staff to do the best job possible by giving them the optimum tools. We hope that the deal we have agreed with BT will be of interest to other London boroughs and beyond."
Seventeen other local councils have already expressed an interest in joining the deal, which Westminster Council says has been structured to encourage widespread adoption by other authorities.
