ESSEX County Council is to spend £2.7million on a major transformation of the way it runs services.

County Hall wants American computer giant IBM to help save £200million a year from backroom operations, so it can be spent it on frontline services instead.

While a full agreement between the two is due to be signed by the end of the year, an interim agreement is being reached to make a start.

As a result, County Hall has agreed to transfer £2.71million from waste budget reserves to get the ball rolling.

The money is to go on staff training, procurement and other functions which are away from the frontline.

Last week, county council finance chiefs revealed the recession and Government cutbacks meant they were facing a £300million shortfall within four years.

Deputy chief executive Nick Bell said the county was “ahead of the game” in dealing with the forecasted problems, although he refused to rule out redundancies.