Sutton Council could team up with Merton Council to provide a human resources system generating shared savings of £500,000 in a first among London councils.

Executive Lib Dem councillors agreed to the project at a meeting on Monday night in a move that has been backed by the Conservative opposition.

Sutton will be the host service provider and take responsibility for delivering HR services to both boroughs, with Merton paying for the arrangement.

The move will see approximately 100 HR staff in both Sutton and Merton working more closely together to achieve big savings in areas such as procurement.

The merge between the two follows an increasing trend of local authorities using HR outsourcing or shared services as a way of increasing efficiency and cutting costs.

But Sutton Council’s executive member for Councillor John Drage said it was the first of its kind in the capital.