Seven councils in the South East of England have agreed to form a consortium to buy shared services, including IT.
Called the SE7, the consortium will be led by Surrey and East Sussex, and includes West Sussex, Kent, Hampshire, Medway and Brighton and Hove councils. The councils have a combined annual budget of £3.4 billion.
The consortium hopes that its collective purchasing power will allow the councils to save "millions of pounds" of costs by sharing services such as IT, highways construction and maintenance, special education facilities and waste management.
Dr Andrew Povey, Surrey County Council leader, said: "Buy 'bulk buying' we will enjoy economies of scale and provide even greater value for money for the 5.3 million residents SE7 represents.
"All seven councils recognise that in the current financial climate they will need to remove several hundred million pounds of costs over the next few years and this is one way we can help to achieve it."
At the beginning of this year, Lancashire County Council announced that it was looking for suppliers to provide up to £1.9 billion worth of IT services, which would be shared with its 12 borough councils, Cumbria County Council and other local bodies over a ten-year period.