The Director of Economic Growth and Neighbourhood Services submitted a report (previously circulated) seeking Members’ views and feedback on the Tees Valley Joint Waste Management Contract prior to its consideration by Cabinet at its meeting on 5 November 2019.
The submitted report outlined the current position of the Tees Valley local authority waste contracts; Hartlepool, Stockton, Middlesbrough and Redcar and Cleveland operated a single contract by SUEZ whilst Darlington had a separate contract for municipal waste treatment and disposal; and that these contracts were due to expire in 2025.
It was reported that a joined procurement approach across the five Tees Valley authorities for the delivery of a residual waste management solution was approved by Cabinet in January 2019; the updated Joint Waste Management strategy was adopted by the Tees Valley Local Authorities in January 2019 and set out the future strategic aims and objectives of the Tees Valley councils.
An outline business case had been developed to address the future treatment of municipal residual waste; an Inter-Authority Agreement developed to deliver the procurement, setting out the terms of joint working arrangements, procurement milestones and appointed Hartlepool Borough Council as the lead authority; and a reference site with full planning consent would be offered to bidders to ensure there was adequate competition for the contract and to mitigate any perceived advantage of SUEZ.
Details were provided of the key dates and financial considerations; the Tees Valley Combined Authority would provide funding of up to £5m for the procurement process which would be repaid over a 25 year period; and that the financial commitment for Darlington would be £1m.
Following a question Committee was advised of the process for waste transportation out of the borough to the disposal facility and it was confirmed that costs of transportation would be equalised and included in the gate fee to ensure no local authority was penalised for their location.
Discussion ensued in respect of the implications of the expected change in Government policy to widen the definition of municipal waste; Members were advised that rates of waste disposal had slowed down in part due to improved recycling and less packaging, but will inevitably rise due to population increases; a key objective of the Tees Valley Joint Waste Management strategy was to increase recycling of household waste; and that Darlington were performing well, with recycling rates at 46% in Quarter one.
A Member in attendance at the meeting highlighted the requirement to reduce domestic and industrial refuse by one sixth by 2050 in order to meet government climate change targets; that this would likely result in reduced rates of refuse; and that the potential impacts on the waste contract should be considered as part of the procurement process.
RESOLVED – (a) That the report be received.
(b) That Cabinet be:
i) advised of this Scrutiny’s view that the procurement process should consider the implications of the Government climate change agenda and targets to reduce pollution from consumption, which if met, would result in a reduction in municipal waste;
ii) advised that the adoption of the Outline Business Case, the proposal to enter into the Inter-Authority Agreement and the Terms of Reference for the Project Delivery Group, all as appended to the submitted report, be supported; and
iii) requested to take into account this Scrutiny Committee’s views when considering the Tees Valley Joint Waste Management Contract report at its meeting on 5 November 2019.
The Leader of the Council introduced the report of the Director of Economic Growth and Neighbourhood Services (previously circulated) requesting that consideration be given to adopting the Outline Business Case (OBC) for the future treatment of municipal residual waste on behalf of the five Tees Valley (TV) Councils; entering into an Inter-Authority Agreement (IAA), between the five Tees Valley authorities in respect of the TV municipal residual waste treatment project; and the Terms of Reference for the Project Delivery Group (all also previously circulated).
The submitted report outlined the background to the project; stated that currently Hartlepool, Stockton, Middlesbrough and Redcar and Cleveland operated a single contract for waste disposal; Darlington operated a separate Waste Treatment and Disposal Contract; the OBC had been developed to address the future treatment of municipal residual waste (waste remaining after recycled material had been removed) when the current contract(s) expired in March 2025; the strategic outline case was agreed in 2017; and that the IAA had set out the terms of the joint working arrangements for the project and had appointed Hartlepool Borough Council as the Lead Authority in carrying out the procurement milestones. References were also made to the risk implications of the contract; financial considerations; legal implications; and the consultation undertaken.
It was reported that the Place Scrutiny Committee had consider the Cabinet report and in supporting the adoption of the OBC, IAA and Terms of Reference had recommended that the procurement process should consider the implications of the Government’s climate change agenda and targets to reduce pollution from consumption, which if met, would result in a reduction in municipal waste.
Discussion ensued on the scrutiny of the procurement process.
RESOLVED - (a) That the Outline Business Case for the future treatment of municipal residual waste, on behalf of the five Tees Valley Authorities, as appended to the submitted report, be adopted.
(b) That the Council enter into the Inter-Authority Agreement (IAA) between the five Tees Valley Authorities in respect of the Tees Valley Municipal Residual Waste Treatment project, substantially on the terms as detailed in Appendix 2 to the submitted report, and that the Managing Director ba authorised to approve any minor amendments to the IAA.
(c) That the financial commitment to Darlington’s share of the procurement and project costs of £1m, as detailed in the submitted report, be noted, and the funds be released subject to approval by full Council as part of the 2020/21 Medium Term Financial Plan, to be applied to the Project in accordance with the IAA.
(d) That the Council enter into an agreement with the Combined Authority to repay the £1m associated with the procurement over a 25-year period with the final details of the agreement being delegated to the Assistant Director Resources, in consultation with the Director of Economic Growth and Neighbourhood Services, Assistant Director Law and Governance and the Cabinet Member with the Leisure and Local Environment Portfolio.
(e) That the Director of Economic Growth and Neighbourhood Services, in consultation with the Assistant Director Resources, Assistant Director Law and Governance and the Cabinet Member with the Leisure and Local Environment Portfolio, be authorised to accept any minor changes to the Outline Business Case, the Inter Authority Agreement and Terms of Reference of the Project Board if required.
REASONS - (a) To enable Darlington to participate in the joint procurement of the wider Tees Valley residual waste treatment facility for post 2025.
(b) Entering into the IAA sets down the legal parameters for the procurement, ensuring that no individual authority can withdraw without financially compensating the other authorities for the relevant share of procurement costs and other losses.