MILLIONS of pounds of taxpayers' money could be saved after a landmark Supreme Court ruling.

A series of London councils, including Harrow and Brent, tried to set up shared insurances services to cut costs, but were hamstrung by a Court of Appeal ruling in 2009.

The judgement said the system violated European laws, but since then the Government has brought in new laws to allow the scheme.

The final hurdle was removed when the highest court in the land overturned the original judgement in a case brought by Harrow Council yesterday.

Councillor Bill Stephenson, leader of the council, said: “This landmark decision clears the way for councils to innovate and share services, saving tens of millions of pounds for taxpayers across the country.

“At a time when we need to find huge savings, this case is an important win for all public bodies.

“It liberates us to cut operational costs in areas such as insurance, so we can direct a greater portion of our money to delivering front line services for our residents.”

Councillor Barry Macleod-Cullinane, deputy leader of the Tory Group, said: “This is extremely good news and I concur with everything Cllr Stephenson has said.

“Our administration started this legal process under the previous council leader, Councillor David Ashton, because we knew it had the capacity to save councils and residents millions of pounds across the country – and not just in Harrow.”