Wolverhampton City Council has confirmed that it is in the late stages of negotiating a merger of its IT systems with Staffordshire County Council, in a bid to cut costs.
By sharing its IT and other back office functions, Wolverhampton said that it would be able to replace its "now dated" systems for finance, HR, procurement and IT with a new, fully-integrated set of applications.
"We are committed to arriving at a partnership agreement with Staffordshire that provides us with up-to-date technology and allows the delivery of services in the most cost-effective way," said Tom Rennie, the interim strategic director for delivery leading the programme on behalf of Wolverhampton.
"Over the coming weeks, I will be preparing a detailed report, for consideration by the council's cabinet, setting out recommendations as to how we progress this work."
A spokesperson for Staffordshire confirmed that the negotiations were underway, but said that details had yet to be signed off.
In its five-year strategic plan for 2011 to 2016, the council outlined its plans to work with partners "within and outside of Staffordshire to develop shared services, resources and expertise to achieve greater efficiencies and generate income."
Wolverhampton believes that establishing the partnership would lay the foundations for expanding the shared services model with neighbouring local authorities.
"If we can put this partnership on a firm footing, it could well lead to even wider joint opportunities," said Simon Warren, chief executive of the council.
However, redundancies are expected if the merger goes ahead.
"We're hoping that can be managed through retirements and natural wastage," said Philip Atkins, Staffordshire's Conservative council leader, in The Sentinel.