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MAIDSTONE BOROUGH COUNCIL
RECORD OF DECISION OF THE Cabinet
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Decision Made: |
12 October 2011 |
TENDERING STRATEGY - WASTE AND RECYCLING CONTRACT FROM 2013
Issue for Decision
To consider the tendering strategy for the new waste and recycling contract, together with proposals for street cleansing due to start in August 2013 and approval to commit to a joint procurement with Ashford and Swale Borough Councils.
Decision Made
1 That the joint procurement arrangements as set out below be agreed.
2 That the principles of financial disaggregation asset out below be agreed.
3 That delegated authority be given to the Director of Change, Planning and the Environment, in consultation with the Head of Legal Services and Cabinet Member for Environment, to agree the Inter Authority Agreement and enter into the agreement on behalf of the Council for a ten-year partnership with Ashford and Swale Borough Councils and Kent County Council (KCC).
4 That approval be given to commence the joint procurement of Waste Collection Services, to include refuse and recycling and the mechanical sweeping element of the street cleansing service.
5 That this Council takes the lead on the procurement process, managing the various processes, be agreed.
6 That delegated authority be given to the Director of Change, Planning and the Environment in consultation with the Head of Legal Services, to agree and enter into a separate agreement with Canterbury City Council for its inclusion in the procurement exercise but on the basis that there would be no detriment to the Council based on the financial disaggregation in the report.
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That the responses to the Scrutiny Committee
Recommendation action and Implementation Plan (SCRAIP), as attached at Appendix
A, be agreed.
Reasons for Decision
Following a best value review of refuse and recycling in
2009, the Council adopted a five-year Waste and Recycling Strategy. This built
on the work of the Kent Waste Strategy which the Council had signed up to, but
identified the specific direction for waste and recycling to be reflected in
the new contract arrangements for 2013.
The Strategy identified specific key elements:
i) To increase the amount of household waste sent for recycling, re-use or composting to 50% by 2015 (above the national target of 45%.
ii) To reduce the total household waste arisings by 10% by 2015 compared with 2005-2010 average.
iii) To meet any additional costs of operating the service through the support of the Kent Waste Partnership and efficiency improvements on the rest of the waste collection service.
iv) To improve the value for money of the waste collection service.
v) To improve residents’ satisfaction with Maidstone Borough Council’s waste and recycling services.
vi) To increase glass recycling by up to 600 tonnes during the period of the plan.
vii) To work with KCC to minimise the amount of recyclables sent for incineration and maximise the benefits of the value of those materials for both the Council and KCC.
viii) To
support the Council’s objective of 3% annual carbon reduction through the
optimum utilisation of resources, increased consideration of energy efficiency
and higher priority given to service improvements which offer energy reduction.
The proposals identified in the report of the Director of
Change, Planning and the Environments will help deliver the targets and
improvements in all eight of the elements of the strategy.
The Council’s refuse and recycling collection contract is due to be re-tendered in 2013 and discussions have been held with other adjacent authorities whose re-tendering timescales coincides with Maidstone’s i.e. 2013. This has led to the establishment of a Mid Kent Joint Waste Partnership (MKJWP) to consider the possibility of a joint procurement.
This project follows on from the East Kent Joint Waste
Project which provided waste/resource Collection and Street Cleansing Services
for Dover and Shepway District Councils, as well as food, garden and dry
recyclate processing services on behalf of KCC in respect of Dover, Shepway and
Thanet District Councils and Canterbury City Council. It was tendered in 2010
and the contract commenced on 16th January 2011. The project delivered an
annual joint collection service saving of £900k to both Dover and Shepway
District Councils. Future avoided disposal savings are dependent upon tonnages
and movements in recyclate values but are forecast to average £2.9m p.a. from
2013-2021 in East Kent.
The tendering exercise will also consider the environmental aspects of collection arrangements, seeking ways to minimise carbon emissions and seeking innovative ways to use the recyclates that are collected.
The MKJWP encompasses the following districts in Kent that
are renewing collection contracts in 2013:
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District |
Current Contract End Dates |
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Ashford Borough Council |
31st March 2013 |
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Maidstone Borough Council |
31st July 2013 |
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Swale Borough Council |
13th December 2013 |
In order to maximise the efficiency of the collection
contract arrangements and to ensure the three contract areas finish at the same
time, it is proposed that the partnership and contract arrangements continue
for a period of ten years up until 21st October 2023.
The MKJWP seeks to provide the most cost effective means of collection and processing waste/resources. Learning form the experiences in East Kent the proposed collection methodology would provide for the following:
· Weekly Food Waste Collection;
· Fortnightly Dry Recycling Collection; and
· Fortnightly Residual Waste Collection.
To minimise collection costs the food waste is collected
separately but on the same vehicle that provides for the residual waste and dry
recycling collection service. To maximise the value of the recyclate and
minimise material recycling processing costs mixed paper and card is collected
separately from glass, cans, plastic and tetrapak. This is being achieved on
the same vehicle using split backed collection vehicles.
It is proposed that the collection of Garden Waste is included in the contract and will continue to be available at a charge.
There is still a national debate regarding the provision of
weekly collections and the Government has recently introduced incentives for
authorities with fortnightly collections to revert to weekly arrangements.
However, the Council has already introduced a very successful weekly food
collection with fortnightly dry recycling and residual waste collections. This
has proved very popular with the public with participation around 80%. There
are therefore no proposals to change these arrangements.
The proposed collection method is referred to as the Preferred Collection Methodology or PCM and the key difference between this and the current arrangements in Maidstone will involve separating the dry recycling to maximize the value collected. An insert or similar will be provided to go into the dry recycling bin in which paper will be separately stored prior to collection. In addition, glass can be placed in the recycling bin, although residents will still be able to utilize the glass bins across the district. The cost of the containerisation is to be provided by KCC.
Maidstone is currently achieving recycling rates in the mid
40% and this has reached 50% in times of high composting. However, the
Government Waste Policy in England 2011 reaffirms the need for councils to
increase their recycling rate to ensure, at the very least, meeting the EU
framework directive of 50%. The Council has set a target of 50% by 2015, in
the adopted Waste and Recycling Strategy.
It is possible that alternative collection methods may be proposed, if during the course of the tendering process greater collection/disposal savings can be delivered by adopting a variant to the PCM.
Street cleansing is also included in the current Waste
Collection Services for both Ashford and Swale and the tender documents for
these authorities will include both refuse and recycling collection and street
cleansing. Both currently have an external contractor.
In Maidstone, the street cleansing service is provided ‘in house’ and the
merits of this compared with an external contractor are considered at Appendix
1 to the report of the Director of Change, Planning and the Environment.
In summary, the flexibility of the current arrangements combined with good
performance and low price support the retention of the ‘in house’ service.
However, it is recognised that there could be good opportunities for combined
operations for mechanical sweeping and thereby good levels of potential
savings. Whilst slightly increasing the complexity of the management of the
service, this is considered the best option for the Council.
A detailed project review has been prepared by consultants
working for the Kent Waste Partnership which identifies the potential savings
of a joint procurement arrangement. This is provided in the Exempt Appendix to
the report of the Director of Change, Planning and the Environment. The
modelling that has been undertaken has used prices from the tendering process
undertaken for the East Kent Project.
In order to achieve the significant savings identified and
to reflect the other benefits of partnership in the form of cross boundary
operation, improved recycling rates and likely improved customer satisfaction.
It is therefore proposed that the Council enters into an agreement with Ashford
and Swale Councils for the joint procurement of a waste collection services
contract, comprising of the refuse and recycling services and mechanical
sweeping element of the street sweeping services to commence on 1st
August 2013 and ending on 13th October 2023.
The changes to the current refuse and recycling contract can be summarized as follows:-
· The existing collection arrangements for the householder remain predominantly the same:
Weekly food waste collection
Fortnightly dry recycling
Fortnightly residual waste
· Paid-for garden waste collection
· The specific change, subject to the detailed procurement outcome, is that in order to extract the maximum value of the recyclate, an insert will be provided in the recycling bin to allow the separate storage and collection of waste paper. It is also envisaged that glass will be able to be placed in the recycling bin.
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There will be no other additional bins required.
It has been modelled that this should increase the Council’s
recycling rate to just above 50% which is in accordance with Government policy
and will ensure the Council is in the top quartile of performance when compared
to other districts.
The financial benefits to the Council are summarized in the
Exempt Appendix to the report of the Director of Change, Planning and the Environment.
Alternative options for a stand-alone tender, a partnership
with one other authority and a co-mingled collection of recyclates have been
considered and these are detailed at Appendix 2 to the report of the Director
of Change, Planning and the Environment. However, the PCM and
partnership procurement offer the best financial option for the Council.
It is therefore considered that the potential savings are so
significant that the Council should enter into the joint procurement
arrangements and the Inter Authority Agreement for a ten-year partnership with
Ashford and Swale Councils.
The savings for street cleansing are modest in the region of
£70k and by retaining the in-house service, the Council will retain the
flexibility of its own workforce which is currently performing well.
A draft Inter-Authority Agreement (IAA) is attached at
Appendix 3 to the report of the Director of Change, Planning and the
Environment . The objective to this agreement will bind the four authorities
to the procurement arrangements and financial disaggregation of the joint
project with KCC set out in this report. Delegated authority is requested to
agree the final version of the IAA and enter in the agreement on behalf of the
Council.
It is proposed that each of the four authorities will seek
agreement to enter into the partnership and the notice regarding the
procurement will be published in October, in accordance with the timetable
necessary to have the new contract arrangements in place by August 2013.
It has been agreed that, subject to each authority agreeing
the proposals, Maidstone will act as the procuring authority and officers will
work on the specific tender documents. All costs are to be met by KCC and it is
recommended that this be supported.
As recently as the last week in September 2011, Canterbury City Council has expressed a wish to be involved in the joint procurement arrangements. This would require a separate agreement between the current three partners and Canterbury.
However, the detailing modelling of the impact of including Canterbury has not been undertaken, although the consultant’s initial view is that it should further improve the savings potential for all partners. It is therefore proposed that the Director of Change, Planning and Environment, in consultation with the Head of Legal Services, enter into a separate agreement with Canterbury City Council regarding its inclusion in the procurement exercise but on the basis that there would be no detriment to the Council based on the financial disaggregating in the report.
In making the decision set out above, the Cabinet had regard
to the Sustainable Community Strategy.
Alternatives considered and why rejected
The Council could decide to seek tenders independently but
this would not generate the economies of scale of a joint procurement and would
not produce the waste disposal savings to be shared by all the partners. A
summary of the potential savings is set out at Appendix 2 to the report of the
Director of Change, Planning and the Environment.
Tenders could be sought with just one partner, but again this would not generate the economies of scale of a three way procurement and again, would not produce the waste disposal savings to be shared by partners. A summary of the potential savings of a two partner procurement are set out at Appendix 2 to the report of the Director of Change, Planning and the Environment.
The Council could decide to operate a different form of
collection for dry recyclables by co-mingling the waste and not separating the
paper. This would not produce the value for paper recycling as the paper would
be ‘contaminated’ and the possible savings would be reduced. Details are
provided at Appendix 2 to the report of the Director of Change, Planning and
the Environment.
It would be possible to seek a tender for street cleansing and this could form the modelled work providing an additional modest saving. However, this does not provide the flexibility currently provided by the ‘in house’ service and is therefore not recommended.
Background Papers
None
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Should you be concerned about this decision and wish to call it in, please submit a call in form signed by any two Non-Executive Members to the Head of Change and Scrutiny by: 20 October 2011 |