Conservative councillors in Calderdale and Kirklees have drawn up plans to merge services across the two authorities to offer better value and save £2.5 million a year.

Kirklees would be split into two, with one authority to cover the north and another to cover the south. Wards in Calderdale would be reorganised to reduce the number of councillors from 51 to 36, in line with the size of the Kirklees wards.

This would create three authorities running their own neighbourhood services out of Dewsbury, Halifax and Huddersfield. Strategic services would be managed as one, but split equally between the three councils.

The three councils would be separate entities but would share a chief executive and five other directors, who would run the councils with a reduced number of second and third-tier managers.

Councillor Robert Light, leader of the Conservative group on Kirklees Council, said: “These proposals have been under development for some time and we know that they are well-founded and deliverable.”

The Conservatives’ target date for establishing the new councils is May 2014, so work would need to begin this June.