More than 650 staff working for Somerset County Council and Taunton Deane Borough Council have formally transferred to a new company as part of a £400m, 10-year shared services deal.
Southwest One is a joint venture between the councils and outsourcing provider IBM. It will deliver services such as human resources, IT, finance and customer contact centres for both councils.
About 100 IBM staff are now working full-time in Taunton, with a further 100 expected to transfer next year. IBM also plans to open an office in the county town in the future.
Both councils have said they expect to save in the region of £200m over the course of the contract, originally signed in October, for reinvestment into front-line services.
Jill Shortland, leader of Somerset County Council, said: “Southwest One has been set up with the express purpose of transforming and improving the delivery of services, making them more accessible and driving down costs. These are significant benefits for the residents of Somerset.”
The joint venture will also be open to more than 30 other public sector organisations in the region, which will be able to take advantage of the shared services on offer.