Plans for two north-east councils to merge a range of services – including the administration of council tax, business rates, staff payroll, revenues and benefits – are now closer to being put into practice.

Newcastle City Council and Northumberland County Council would like to merge the provision of these ‘transactional services’ in order to save money in a climate of ongoing central government austerity.

Earlier this week, Newcastle City Council’s cabinet approved the business case to share transactional services with Northumberland. The proposals will now be subjected to further scrutiny before being fully approved.

Northumberland County Council approved the proposals on January 9th.

Under the proposals, Newcastle City Council staff who provide transactional services will be transferred over to Northumberland Council. A joint committee will be set up to begin this process and there will be consultations with staff and unions.

Merging the transactional services staff of both councils will create a workforce of around 400. It is hoped that the new service will be up and running by April 2018 and that staff will move into their new offices by July or August 2018.

It is estimated that sharing transactional services could save each council £895,000 over the next three years, which works out at nearly £1.8 million in total.

Transactional services cost both councils around £11 million per year.

Cllr Veronica Dunn, Newcastle City Council’s cabinet member for resources, 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.”

Cllr Nick Oliver, Northumberland County Council’s cabinet member for corporate services, 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.”

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