Shared-service centres that run back-office functions such as HR will become "the norm" in local government by 2009, the Public Sector People Managers' Association (PPMA) has predicted.
Last week, the London Borough of Hammersmith and Fulham signed a £120m, 10-year deal to set up London's first local government shared-services centre from 1 October. The centre aims to run back-office functions for other London councils.
The PPMA said the need for the public sector to make savings, driven by the government's Gershon efficiency agenda, would mean more local authorities moving towards this model.
Alan Warner, past PPMA president and corporate director (people and property) at Hertfordshire County Council, said there was great potential for local authorities to offer a range of services to other councils.
"This is the direction of travel for HR in local government," he said. "We will see some real changes within the next three years."
NHS organisations are also taking steps in adopting the shared-services model. The Department of Health is on the verge of providing funding for a pilot project.