Plans for two North East councils to merge their transactional services have taken a major step forward.

Newcastle City Council’s Cabinet today (Mon Jan 15) approved the businesses case to share transactional services with Northumberland County Council subject to call-in by scrutiny. The county council’s cabinet agreed the proposal on Tuesday, January 9.

A Joint Committee will now be set up to start the process along with a formal consultation with staff and trade unions.

Under the proposals, city council staff who deliver these services will transfer over to the Northumberland County Council under TUPE arrangements. It’s expected the move will ensure high quality transactional services such as council tax, business rates, staff payroll and revenues and benefits.

The move to shared services is in line with national and local government reform and is expected to save £895,000 over the next three years for each council, a total of almost £1.8m. .

Newcastle’s Cabinet Member for Resources, Cllr Veronica Dunn, said: “Over the last seven years Government cuts have had a profound effect on councils up and down the country. As a result, they have had to explore new ways of providing services.

“Newcastle has a proud record of finding innovative ways of doing more with less. Coming together with our neighbours in Northumberland will, I believe, deliver savings that can be reinvested back into sustaining vital public services that people depend upon.”

Northumberland’s Cabinet Member for Corporate Services, Cllr Nick Oliver, said: “All councils continue to face significant pressures to reduce costs, while at the same time continuing to provide essential high quality services to our communities and our residents.

“By exploring opportunities to provide joint financial services, this will help us to look at ways we can continue to achieve high quality frontline services in a cost-effective and more efficient way.”

Transactional services cost both authorities about £11m a year.

Bringing staff together will create a single workforce of over 400, formal consultation with staff affected will now take place.

It is hoped the new service will be up and running by April 1 2018 and staff will move into new office accommodation in July or August 2018.