UK - Two London boroughs have joined forces to cut outgoings by appointing a single pensions administrator, becoming the first to sign a deal on cost-sharing - a principle recommended in a prominent government report.

The London Borough of Hammersmith and Fulham and the London Borough of Brent have appointed Capita Hartshead to act as their single pensions administration provider for the next four years.

The cost-sharing 'framework agreement' is not necessarily limited to the two boroughs, the pensions administrator said.

Under the agreement, other London boroughs can join the framework, appointing Capita Hartshead for their pensions administration without needing to go through their public sector procurement process.

Leader of Hammersmith and Fulham Council, councillor Stephen Greenhalgh, said: "This is about maximising value for money for the taxpayer by doing everything possible to reduce our pension administration costs, while maintaining a quality service."

Steve Birks, director of operations at Capita Hartshead, said: "This is a time of great change for public sector pensions, so, as well as providing administration services, we will be advising the two boroughs on the impact of these changes.

"We will also be working with them on their communications to increase member engagement, introducing member websites and onsite monthly pension surgeries."

The contract runs for four years from 1 October. Administration services for the two boroughs' 31,000 members will be provided from Capita Hartshead's office in Banstead.

The London boroughs are not the only UK public sector pension schemes to seek to share outsourced services.

In January, Merseyside Pension Fund linked up with Lancashire County Pension Fund and the local government pension scheme for Cumbria to tender for actuarial services.

This followed a joint tender for actuarial and investment services from the Environment Agency in combination with five other regional funds.

In his final report into public sector retirement in March, Lord Hutton mentioned suggestions that public service pension schemes make administration more efficient and use more shared arrangements.

He said this was particularly relevant for locally run schemes.