Agenda item

The Committee received for consideration a report on the future waste treatment and disposal arrangements which included an outline of the progress that has been made throughout the County.

Members noted that the Council’s current waste and recycling services were delivered by CWM Environmental.  The company was established in 1997 as a Local Authority Waste Disposal Company (LAWDC) for the Council. However, in March 2015 the council’s fifteen year contract with CWM ended, and a three-year bridging extension was granted to extend the contract up until March 2018.  The Council was now in the latter stages of exploring its options for establishing its future waste management arrangements.

The report provided an overview of the process to date and included a detailed analysis of an options appraisal which was conducted at a strategic level. Members noted that the options appraisal found that there were several advantages to using a Teckal approach for the procurement of the Council’s new waste treatment contract.  Based on the results of the options appraisal, a business case had been developed for the preferred option.  The business case methodology was included within the report.

The Head of Waste and Environmental Services highlighted to the Committee that since the production of the report, the Governance Proposals section had been updated to include the Executive Board Member for Environment within the proposed membership for the Council Shareholder Board.  In addition, the proposed membership for the Teckal Company Board had been updated to include 2 x independent non-executive Directors. 

As set out in the report, the Waste Services Manager explained the next steps and stated that during the development of the options appraisal and business case, the Council had benefited from external technical, legal and financial advice to that end, the move into the implementation stage for the new Teckal company was recommended.

The following questions/issues were raised on the report:-

• In response to a query, the Head of Waste and Environmental Services stated that Cwm Environmental was actively competing for external contracts with recent contract awards from other Local Authorities including the treatment of waste from Swansea Council’s Garden Waste Collection scheme. 
  
  
• Arising from the above an additional query was raised regarding benchmarking, the Head of Waste and Environmental Services explained that the difficulties of benchmarking against other businesses due to the nature and number of services provided and the existence of cross-unit arrangements in relation to funding.  The Director of Environment added that outside contract arrangements effectively reduced organisational risk and looking forward, additional statistical work would be required to determine ‘best value’ and as a company seek to gain best advantage.

• It was asked if the company would compete fairly with the private sector.  The Director of Environment agreed that this was an important factor and reassured the Committee that the business case would incorporate salient aspects in order to protect local businesses and jobs.

• Following a query regarding interim arrangements, the Waste Services Manager stated that the new arrangements were planned to start in April 2018.  In addition, the Director of Environment reported that following legal advice, and by the nature of a Teckal business there would be no obligation to go through a procurement process, thus enabling a speedy process. 

• It was commented that none of the profits made by Cwm Environmental had been returned to the Council.  The Head of Waste and Environmental Services explained that Cwm Environmental was currently trading as an arm’s length company which enabled the Authority to benefit from the profit made through the investment in infrastructure that works towards increasing the Council’s recycling performance.

• Reference was made to the Business Case Methodology section of the report.  It was commented that whilst it was suggested within the report to proceed with the ‘Moderate Business Growth’ scenario, it was felt that the ‘Ambitions Business Growth’ scenario would be the best fit.  The Head of Waste and Environmental Services explained that having regard to the regional potential and the given time constraints along with the uncertainty of the waste market the ‘Moderate Business Growth’ scenario would provide a more suitable basis for a business plan in the short term with an appropriate level of ambition in future years.

• A comment was raised that in previous years, it had been identified that waste lorries from both the Council and Cwm Environmental were collecting from the same places, which was deemed as a waste of resources.  The Head of Waste and Environmental Services stated that this scenario would often occur as the both the Council and Cwm Environmental were in direct competition, this would reduce as a result of future arrangements.

• In response to a query, the Director of Environment stated that she had confidence in the operations delivered and that the public would not be impacted upon during the cross-over period.
  
  
• It was asked if the North of the County would see an improvement in waste services following the formation of the new Teckal Company.  The Head of Waste and Environmental Services stated that any identified improvements required would be included as part of a forward planning strategy.

• With regard to the news on China’s ban on imported plastic, it was asked how this would impact the waste recycling service in the future.  The Head of Waste and Environmental Services stated that China would be stopping imports of mixed paper and plastic bottles waste from early next year.  The ban would affect all Authorities and that a collaborative approach would be investigated in due course.

• Confirmation was sought regarding the transfer of all employees’ contracts.  The Director of Environment confirmed that with the caveat of taking legal advice, TUPE regulations did not apply to this arrangement and that all staff terms and conditions would remain the same.  Furthermore, any new employees would be employed under the Teckal Company’s terms and conditions.

UNANIMOUSLY RESOLVED:

5.1         to receive the future waste treatment and disposal arrangements;

5.2         that the outcome of options review for future waste treatment and disposal services be noted;

5.3         that the current development of business case for the preferred option be noted;

5.4         that the next steps for project delivery be noted.