Edinburgh Council reckons to have saved £10m this year by using a new system to cut its procurement bill and by standardising systems to enable it to renegotiate an outsourcing contract.
The council said its savings showed that, for large councils, internal efficiencies can be great enough to meet the demands of the government's Gershon efficiency review, without the need to share services with neighbouring authorities or other outside agencies.
Andrew Unsworth, head of e-government at Edinburgh Council, said the savings equated to 2.4% of the council's total budget this year - just shy of the 2.5% target set by the government's Gershon efficiency review to be achieved by 2008.
"The opportunities from internal projects are certainly large enough to deliver substantial parts of the Gershon agenda," said Unsworth.
This year Edinburgh Council renegotiated a long-standing outsourcing deal with BT, cutting its annual bill to £22m from £26m. Unsworth said the saving was made possible by the council moving towards standardising its 18,000 desktops on a single build of Windows XP, as well as starting to consolidate its applications.
The desktop programme, being carried out by BT subcontractor Civica, started in July and is due to be completed by June 2007.
Alongside this saving, Edinburgh said it has cut £6m from its procurement bill by using a procurement module on an Oracle enterprise resource planning system installed in April 2005.
"Some of the large authorities, such as Edinburgh, can meet the Gershon efficiency savings using their own capacity," said Eric Woods, government practice director at analyst firm Ovum.
In last week's pre-Budget report, the chancellor Gordon Brown announced that councils have to make further savings of 3% year-on-year from 2008 to 2011.
Woods said, "The challenge for Edinburgh will be working with front-line services, such as social care, to meet the next round of efficiency targets.
Vista waiting game
Edinburgh Council decided against standardising on Windows Vista for its desktop refresh because it wants to wait until other users have implemented the new Microsoft operating system.
Head of e-government Andrew Unsworth said, "We did not want to be in the first wave of Vista. It is early in Vista's lifecycle and we are planning with BT to look at the new operating system next time around."