Wiltshire County Council has signed a seven year, £12m deal with IT services firm Logica to overhaul its internal business services and streamline front-line support.

The programme wil provide an IT backbone for five local authorities - Wiltshire County Council, West Wiltshire District Council, North Wiltshire District Council, Salisbury District Council and Kennet District Council - which will merge in April 2009.

Carlton Brand, resource director at Wiltshire County Council, said: “The creation of a single authority is a major undertaking for us and we needed a long-term partner with experience in creating and operating a shared services model to assure our drive for efficiency and value for money can be achieved."

Working with Logica Wiltshire aims to simplify, standardise and increase the efficiency of internal business processes and applications. The new council is hoping for substantial savings from the contract. "The move will potentially save the new One Council for Wiltshire between £9m and £11m a year after an initial investment of £8 million is repaid," it said.

Logica will implement and host a new SAP ERP system to deliver finance, procurement, HR, payroll services and performance management for the new council body.

Wiltshire joins a growing number of councils that have responded to Whitehall demands for increased efficiency by outsourcing or renewing the outsuorcing of IT. These include Glasgow, Ealing and Southwark, which all have outsourcing deals with Serco. Edinburgh recently renewed a large outsourcing contract with BT, and Southampton and North East Lincolnshire are working with Capita to cut costs.

Reading has a desktop service deal with Northgate that focuses on cost savings, and Herefordshire is working with Deloitte to consolidate legacy systems.