The Department for International Development and the Foreign & Commonwealth Office have agreed to share a voice over IP network in a bid to cut costs.

DFID is the latest of the two departments to sign a contract with Cable & Wireless, as part of a government-wide framework agreement with the supplier. The FCO signed an £82 million, five and a half year contract in September.

DFID is one of only two departments not to have seen its budget cut in the corporate spending review, but is still taking steps to pare down costs.

Its agreement, running for five-and-a-half years, is worth £10.3 million. The first major “material” cost of the service is expected to be booked in 2011 to 2012, after the rollout is complete.

The department expects to save £9 million in telecoms costs over the period. It operates 44 offices globally and has over 1,200 users, and will draw on VoIP and other IP services.

In the run up to last month’s Spending Review, the government agreed with many of its leading IT suppliers, including Cable & Wireless, that there would be more cross-departmental procurement and more sharing of services.