The councils will merge their adoption and fostering services, which will include having a single point of referral to social services. The boroughs will also merge their safeguarding children's boards. However, safeguarding teams will still be based in their local areas.
The councils estimate that combining their children's services departments will save £9.5m by 2014/2015.
Councillor Sir Merrick Cockell, leader of the Royal Borough of Kensington and Chelsea, said: "Combining services will increase our ability to respond and engage on local issues and ensure a greater share of resources go to the frontline."
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