Havering and Newham Councils will extend their share services across both boroughs in a bid to save £11m.
The agreement will result in the creation of a new team from existing staff who will support the borough’s technological systems and implement a programme to update and standardise systems.
Mayor of Newham, Sir Robin Wales, said "In terms of grant funding, Newham is being hit harder than any other London borough so we have to make considerable savings. By entering into this agreement Newham expects to save around £7.5m over five years. We hope to be able to attract other boroughs to join us, offering the opportunity for even more efficiencies.”