Bristol City Council has announced plans to migrate its IT infrastructure to the cloud via a two-year £1.5 million contract with Eduserv.
The contract, which was set up through the G-Cloud framework, is part of wider plans to consolidate the authority's office space by 40 percent to help close a budget gap of £90 million between now and 2017.
Eduserv, a not-for-profit SME based in nearby Bath, will help with the process of moving the council's services to the cloud and will be responsible for the day-to-day management of the council's IT estate.
A spokesman for the company explained that the current infrastructure at the council supports all of its core applications, of which there are several hundred spread across Windows, Linux and IBM environments.
He said: "During the project we are migrating half this hardware to our Swindon data centre and also providing a managed service for the entire estate."
Contracts on G-Cloud only run for two years, but once this initial phase of migration is finished the council may choose to involve third party providers, he added.
The migration will free Bristol from owning much of its ICT, allowing the council to move to flexibly buying services that match demand, service manager Steven Pendleton explained.
He said: "Like every council, we are faced with the challenge of delivering high quality services while reducing our costs by 30 percent.
"The ICT market is changing rapidly, becoming much more commoditised and consumer led, where significant economies of scale are now possible."
Bristol follows the Royal Borough of Windsor and Maidenhead, which CIO Rocco Leballarte claimed to be the first UK local authority to move to a fully cloud-based infrastructure in May this year.
Eduserv's sales director Andrew Hawkins said: "We have worked hard to develop a cloud proposition for local government which allows organisations to choose the right mix of IT and professional services for the specific challenges they may face.
"The benefit of having our own data centre is local government can free up their real estate immediately by collocating in our data centre and migrating to the cloud in a controlled environment."
The announcement helps to boost Bristol City Council's stated aims of buying more through G-Cloud and using more SMEs and local suppliers.
The authority is one of the three biggest local government buyers through G-Cloud and this deal will help to advance its aim, inspired by policy in central government, for 25 percent of its spending to go to SMEs.
The council released plans to use more open source technologies in 2010 and has since become a pioneer in local government, using Drupal for its website and Alfresco's content management platform, for example.
Sign up for CIO Asia eNewsletters.