Issue - meetings

Report by Director of Communities, Economy and Transport.

9.1 The Head of Transport and Operational Services introduced report and the Waste Team Manager gave a presentation on the background to the Waste PFI Contract for waste disposal. The presentation covered the key aspects of the contract, which are summarised below.

The Contract

9.2 The Waste Contract is a joint contract with Brighton and Hove City Council (BHCC). It is in the operational phase where all facilities have been constructed and are in use. The total cost of the contract is around £40m per annum, of which ESCC pays £26m per annum. The contract was let against a background where there was a drive to reduce waste and landfill through European Union regulations. Landfill tax was beginning to increase (it now costs now £90/tonne) and there was only one remaining landfill/land raise site (at Pebsham) in East Sussex.

Facilities

9.3 Under the terms of the contract a range of facilities were constructed. They include:

·          3 waste transfer stations;

·          A materials recovery facility (MRF) for sorting waste at Hollingdean;

·          A composting facility for food and green waste; and

·          The Energy Recovery Facility (ERF) at Newhaven

In addition, the contract provides 12 Household Waste Recycling Sites (HWRS) in East Sussex and 2 in Brighton and Hove. The HWRS at Maresfield, Crowborough and Pebsham are new sites provided under the contract.

Management of Waste

9.4 Over 90% of residual waste (i.e. black bin waste) goes to the ERF at Newhaven and only 5% goes to land fill. There are only three other Local Authorities nationally that perform better in terms of landfill avoidance. The ERF generates enough electricity for 25,000 homes and ESCC gets an income share from the sale of electricity and the disposal of commercial waste. The materials recovery facility, which takes all of Brighton & Hove’s recycled waste, is not currently at full capacity. The composting facility at Woodlands takes green and food waste and the resulting compost sold to farmers and is also for sale at HWRS sites.

Contract Payments

9.5 The contract payment system is complex, but predominately waste disposal is paid for on a per tonne basis. This includes a base payment, a supplement for recycling, energy production, beneficial use and landfill tax. If more waste is recycled, the cost of waste disposal will be reduced. It is worth noting that a 0.5 % increase in waste will result in an additional £100k cost per annum. ESCC does get income from the contract in the form of Private Finance Initiative (PFI) credits from the Department for the Environment, Food and Rural Affairs (DEFRA) and benefits from sale of recycled materials and electricity.

Waste Collection Authorities

9.6 ESCC is the Waste Disposal Authority and is responsible for the disposal of all domestic waste delivered to it by the Waste Collection Authorities. The Waste Collection Authorities, which are the five District and Borough Councils in East Sussex, are responsible for household waste collection.

9.7 Four of the five Waste Collection Authorities in East Sussex have worked together  ...  view the full minutes text for item 9

Report by the Director of Communities, Economy and Transport

26.1     The Assistant Director Operations introduced report. The report outlines two pieces of work on the Waste Contract. The first is the contract review undertaken by the Department for Environment, Food and Rural Affairs (DEFRA), which produced four key recommendations. The fourth recommendation of the DEFRA review was to carry out an in depth savings review of waste contract. The department has engaged Local Partnerships, which is joint venture between the Treasury and Local Government Association to carry out the in depth review of contract. This piece of work will conclude around February or March 2017. The intention is to bring back the outcomes of the review to the Economy, Transport and Environment (ETE) and Audit, Best Value and Community Services (ABVCS) Scrutiny Committees in June 2017.

26.2     The Committee discussed the recommendations of the report and concluded that it was preferable to await the completion of the Local Partnerships review before undertaking further scrutiny work. The Committee considered that having a joint Review Board would be preferable to each Committee looking at this matter individually.

26.3     The Lead Member for Transport and Environment supported this approach and commented that it would provide more continuity by reference to the May 2017 elections.

26.4     The Committee RESOLVED to:

1)      Note the update on work with the Department for Environment Food & Rural Affairs (DEFRA) and Local Partnerships; and

2)      Await completion of the work being undertaken with Local Partnerships on the Operational Savings Review before considering whether to undertake further scrutiny work jointly with the Audit, Best Value and Community Services (ABVCS) Scrutiny Committee.

Report by the Director of Communities, Economy and Transport

44.1     The Assistant Director, Operations introduced report. The report describes two pieces of work on the Waste Contract. One is the Department for Environment, Food and Rural Affairs (DEFRA) contract review and the other is a more detailed piece of work this is being undertaken with Local Partnerships. The intention is to bring outcome of the Local Partnerships, Operational Savings Review, to both Audit Best Value & Community Services (ABVCS) and Economy Transport and Environment (ETE) Scrutiny Committees.

44.2     The Committee discussed whether to establish a joint Review Board with the ETE Scrutiny Committee earlier in February or March 2017, to consider the outcome of the Operational Savings Review.  Staring this piece of work earlier could be abortive, as it is close to the pre-election period (Purdah) and membership of the Committee may change as a result of the County Council elections. It was agreed to wait until after the County Council elections in May 2017 to start this piece of work with ETE Scrutiny.

44.3     The Committee RESOLVED to:

1)      Note the update on work with the Department for Environment Food & Rural Affairs (DEFRA) and Local Partnerships; and

2)      Await completion of the work being undertaken with Local Partnerships on the Operational Savings Review before considering further scrutiny work jointly with the Economy, Transport and Environment (ETE) Scrutiny Committee.

Report by the Director of Communities, Economy and Transport

6.1       The Committee considered a report by the Director of Communities, Economy and Transport which provided an update on the Waste PFI (Public Finance Initiative) Contract.

6.2       The Assistant Director, Operations introduced report and introduced Justin Foster, Waste Team Manager and Sue Short, Waste PFI Accountant to the Committee. East Sussex County Council (ESCC) is the Waste Disposal Authority which is distinct from the waste collection authorities who collect refuse from residential properties. ESCC is working with Brighton and Hove City Council (BHCC) in a 30 year contract with Veolia which has built and operates a number of waste disposal facilities including:

• the Newhaven Energy Recovery Facility (ERF);
• the Woodlands composter at Whitesmith;
• the Hollingdean Materials Recovery Facility (MRF); and
• twelve Household Waste Recycling Sites (HWRS).

6.4       Justin Foster, Waste Team Manager outlined the main sections of the report. The operation of the Waste (PFI) Contract is complex and has been reviewed recently by the Department for Environment, Food and Rural Affairs (DEFRA). ESCC and BHCC were awarded £113m in PFI credits from DEFRA towards the cost of the contract. The contract payments to Veolia include amounts for the repayment of the capital invested to build the facilities, interest charges, the operation of contract, plus a small profit for the contractor.

6.5       The Committee thanked the Waste Team Manager for the quality of the report. The Waste Contract expenditure represents a large proportion of the department’s budget. The Economy, Transport and Environment (ETE) and the Audit, Best Value and Community Services (ABVCS) Scrutiny Committees are both interested in the impact that the Waste Contract has on the Council’s revenue budget and savings plans.

6.6       The Committee discussed the report in more detail and the key points of the discussion are summarised below.

Waste Collection and Recycling targets.

6.7       The European Union (EU) Waste Directive imposes a target of recycling 50% of all waste by 2020. This target has been reflected in the Waste Contract targets. The United Kingdom (UK) has an aspiration to meet that target and current UK performance is 44%.It is a stretching target and could be achievable. What is not known is whether there will be any financial penalties if ESCC does not meet this target.

6.8       Waste collection arrangements and the impact on recycling rates and contract costs:

• The Committee heard that there was an impact on the waste contract from the collection arrangements and recycling performance of the collection authorities. ESCC has a duty to dispose of all household waste delivered to it by the waste collection authorities. Consequently, the more waste that is recycled under the current arrangements, the less ESCC has to pay in disposal costs.
• The Lead Member for Transport and Environment commented that it was up to each waste collection authority to determine how they collect waste, and that the waste collection arrangements were not part of the Waste PFI Contract.

·         The Committee considered that it would be useful to have a breakdown of recycling rates across the various collection authority  ...  view the full minutes text for item 6