A NEW computer system will save two Worcestershire councils £130,000 a year but may lead to job losses.

Wychavon District Council and Malvern District Council are looking at merging their payroll, human resources and development services teams in a bid to save cash.

Under proposals to be discussed by Wychavon council bosses tomorrow, the council will take over the services for both local authorities with Malvern staff transferred to Wychavon.

The councils are estimating a saving of £70,000 a year for Wychavon and £60,000 a year for Malvern from 2012/13.

However, there may be job losses among the 11 full-time positions employed across the two councils’ teams.

A report to Wychavon’s executive committee said: “There is the potential for a redundancy situation and any costs would need to be offset against savings if suitable alternative employment is not found for affected employees.”

The proposals, which are being consulted with staff and unions, would follow existing shared service agreements created for the councils’ computing and internal audit services.

“The decision to merge the services comes after both councils ordered the same IT system.

According to the report, the new system will “reduce the need for data input and maintenance from staff” – which is why the councils have been able to identify further savings.

Councils are looking at ways to save more cash amid tight budget conditions and an expected 25 per cent cut in the government grant predicted to come following the result of a national spending review later this month.

Earlier this year councillors in Worcester, Wychavon and Malvern were told the taxpayer had been saved £1.2 million after the merging of the revenue and benefits services in south Worcestershire in 2007.