Richmond upon Thames, Merton, Croydon, Sutton and Kingston upon Thames have signed a 'Memorandum of Understanding' which they say will lead the way to co-operation between the local authorities and shared services.
Richmond has already merged its legal department with Merton, to save £100,000 from its budget, and is to look at joining up its children's services with Kingston.
Mandy Skinner, assistant director of commissioning, corporate policy and strategy at Richmond council, said, 'With sharing legal services the numbers of staff involved is relatively small, but with children's services we are talking about the whole range - absolutely everything - and that requires a lot of consideration.'
Lord True, leader of Richmond council, said, 'The face of local government is changing for good. How we deliver services is also changing. Our prime purpose is to protect and deepen local identities, but we can do that by sharing the costs and benefits of support services across borough borders. In the future far more services will be delivered either through commissioning or by sharing services with other organisations where that provides economies of scale and good value for local taxpayers.'
He added, 'Our five councils share many key values including a commitment to high standards and quality in service provision. We also have similar philosophies around devolution, localism, public involvement and the role of volunteering, all of which are crucial to the coalition Government's vision of the Big Society.'
Westminster, Hammersmith and Fulham, and Kensington and Chelsea councils began merging services, including family services, last month, which they said would generate savings of between £50m and £100m a year.