Three London local authorities are considering merging their procurement teams as part of a move to save up to £100 million a year.

Westminster City Council, Hammersmith and Fulham Council, and the Royal Borough of Kensington and Chelsea estimate that sharing the services they provide - everything from procurement to refuse collection - will reduce duplication and create savings of between £50 million and £100 million-a-year.

A spokeswoman for Hammersmith and Fulham said: “All services are being considered. This includes the sharing of internal services like procurement.” She said no further details would be available until the councils announce finalised plans in February 2011. 

The move raises questions over how the councils will conduct tendering across their constituencies.

In a joint statement the councils’ leaders said: “In challenging times our priority is to protect high quality front-line public services, while preserving the democratic sovereignty of local authorities. Ensuring we can provide a high standard of local services in today’s tough economic climate means thinking differently about how we operate. To achieve this in the age of austerity we need to seriously examine new ways of working including sharing service provision with other local authorities to deliver more for less.”

The councils have begun by focusing on merging the children’s services departments, before moving on to assess how environmental services, adult social care and corporate services can be shared.

The leaders said: “Our plans may be the first of their kind, but sharing of services in this way can no longer be viewed as a radical concept. It will soon become the norm for local authorities looking for innovative ways to keep costs down while delivering high quality front line services.”

Elected councillors will remain in place at the authorities.