Aberdeen City Council has agreed to add Highland Council as a partner in a major joint venture which could potentially save millions of pounds a year.

The local authority will extend the existing shared service with Aberdeenshire Council to add Highland Council as a partner in a bid to cut down on the costs of the commissioning of services and supplies.

Members of the city’s finance, policy and resources committee agreed to the deal which could potentially save the council £1.56 million annually while maintaining staffing levels and ensuring local suppliers have more opportunities in the process.

Combined, the three councils have a revenue spend of circa £1 billion that is commissioned on goods and services. Capital expenditure is above this. The sheer scale of this spend should provide the catalyst to drive efficiencies.

Aberdeen City Council finance policy and resources convener, Councillor Willie Young, said: “This decision represents an importance step in developing partnership approach to commissioning across the region and one which will allows all three of us to compete with larger local authorities.

“The agreement represents a tremendous opportunity to deliver a shared service across the North and East of Scotland that provides clear financial and reputational benefits for the council.

“As an organisation, we are committed to finding new and innovative ways to save on our expenditure. This agreement allows us to continue to deliver a sound and localised procurement service while freeing up resources which can be used to directly support our residents on the frontline.”