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MAIDSTONE BOROUGH COUNCIL
CABINET
12 OCTOBER 2011
REPORT OF THE DIRECTOR OF CHANGE, PLANNING AND THE ENVIRONMENT
Report prepared by Steve Goulette
1. WASTE AND RECYCLING – TENDERING STRATEGY
1.1 Issue for Decision
1.1.1 This report considers the tendering strategy for the new waste and recycling contract together with proposals for street cleansing due to start in August 2013 and seeks approval to commit to a joint procurement with Ashford and Swale Borough Councils.
1.2
Recommendations
of the Director of Change, Planning and the Environment
1.2.1 That Cabinet agrees
the joint procurement arrangements as set out in the report.
1.2.2 That Cabinet approves the principles of financial disaggregation set out in the report.
1.2.3 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.
1.2.4 That approval is given to commence the joint procurement of Waste Collection Services which includes refuse and recycling and the mechanical sweeping element of the street cleansing service.
1.2.5 That this Council
takes the lead on the procurement process managing the various processes.
1.2.6 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.
1.3
Reasons
for Recommendation
1.3.1 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.
1.3.2 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.
1.3.3 The proposals
identified in this report will help deliver the targets and improvements in all
eight of the elements of the strategy.
1.3.4 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.
1.3.5 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.
1.3.6 The MKJWP
encompasses the following districts in Kent that are renewing collection
contracts in 2013:
District |
Current Contract End Dates |
Ashford Borough Council |
31st March 2013 |
Maidstone Borough Council |
31st July 2013 |
Swale Borough Council |
13th December 2013 |
1.3.7 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.
1.3.8 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.
1.3.9 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.
1.3.10 It is proposed that the collection of Garden Waste is included in the contract and will continue to be available at a charge.
1.3.11 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.
1.3.12 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.
1.3.13 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.
1.3.14 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 in Appendix
1.
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.
1.3.15 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. The modelling that has been
undertaken has used prices from the tendering process undertaken for the East
Kent Project.
1.3.16 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.
1.3.17 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.
·
There
will be no other additional bins required.
1.3.18 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.
1.3.19 The financial
benefits to the Council are summarized in the Exempt Appendix.
1.3.20 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
in Appendix 2. However, the PCM and partnership procurement offer the
best financial option for the Council.
1.3.21 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.
1.3.22 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.
1.3.23 A draft Inter-Authority
Agreement (IAA) is attached at Appendix 3. 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.
1.3.24 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.
1.3.25 It has been agreed
that subject to each authority agreeing the proposals Maidstone will act as the
procuring authority and officers will, if the proposals are agreed, now work on
the specific tender documents. All costs are to be met by KCC and it is
recommended that this be supported.
1.3.26 As recently as the last week in September, 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.
1.4 Alternative Action and why not Recommended
1.4.1 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 shown in Appendix 2.
1.4.2 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 shown in Appendix 2.
1.4.3 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 in Appendix 2.
1.4.4 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.
1.5 Impact on Corporate Objectives
1.5.1 The refuse and recycling and street cleansing services are core services to the Council and contribute to the three main Council priorities, but particularly Priority 2 “for Maidstone to be a decent place to live”.
1.6
Risk
Management
1.6.1 A full risk
register has been initiated and will be reviewed throughout the project life.
The most significant risk currently is that partners fail to secure agreement
for the Project by the end of October 2011 to enable the procurement process to
commence. Any delay beyond this date will impact upon the procurement timescale
potentially either reducing the effectiveness of the Competitive Dialogue
process or delaying the commencement date of the new Contract. It is therefore
important that all four authorities agree the way forward as soon as possible.
1.6.2 There is a risk
that the benefits forecast by the modelling are not delivered through the
procurement. However the collection cost modelling has been based on tender
information derived from the East Kent Joint Waste Project and tender
competition for Mid Kent is expected to match, if not exceed, that for East
Kent. With regard to Disposal, the rates used are perceived as deliverable. The
modelling of processing costs reflect current KCC contract rates which can be
improved upon based on pricing assessment recently undertaken. This, combined
with the headroom provided for within the Excess Avoided Disposal benefit,
provides KCC with the confidence that they are not unduly financially exposed
by this project.
1.6.3 There is a risk that should the Council decide to withdraw from the partnership, there will be financial consequences due to the need to compensate the losses of other partners.
1.6.4 Significant changes
to collection arrangements can result in a temporary dip in public
satisfaction. The proposed changes are relatively minor and given the
experience of introducing food waste, with good communication this is not seen
as a major risk.
1.7 Other Implications
1. Financial
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2. Staffing
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3. Legal
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4. Equality Impact Needs Assessment
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5. Environmental/Sustainable Development
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6. Community Safety
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7. Human Rights Act
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8. Procurement
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9. Asset Management
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1.7.1 Financial
The proposed arrangements will generate significant savings for the Council as
detailed in the report.
1.7.2 Staffing
There will be staff implications regarding the tendering of the mechanical sweeping element of the street cleansing service. Staff affected will be TUPE transferred. The Council’s procurement team will be leading the procurement arrangements. Discussions have been held with union representatives regarding the proposals.
1.7.3 Legal
A legal agreement in the form of an IAA will be signed by the four authorities.
1.7.4 Social Inclusion
An
Equalities Impact Assessment has been undertaken and the initial screening is
attached as Appendix 4.
1.7.5 Procurement
The four authorities have agreed that Maidstone will be the procurement
authority. A timetable for procurement through Competitive Dialogue is provided
at Appendix 5.
1.8 Conclusion
1.9
Background
Documents
Appendix 1 - Street Cleansing Assessment
Appendix 2 – Alternative Options
Appendix 3 – Draft IAA
Appendix 4 – Equalities Impact Assessment
Appendix 5 – Tender Timeline
Exempt Appendix – Project Review
IS THIS A KEY DECISION REPORT?
Yes No
If yes, when did it first appear in the Forward Plan? June 2011
This is a Key Decision because it affects the whole borough and has significant financial implication…………………………………………………………………..
Wards/Parishes affected: ……ALL
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