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Councillors and committees

Agenda item

Contracts Update

Report of the Project Director, South Tyne and Wear Waste Management Partnership

Minutes:

The Joint Executive Committee received a report on the current position regarding the Residual Waste Treatment Contract and other contracts and activities managed by the Partnership.

 

The joint partnership team continues to undertake several waste management functions on behalf of the partner authorities including reviewing and verifying monthly contract reports, which detail materials processed and service issues. Once approved, invoices are processed and, where appropriate, apportioned between partner authorities within contractual timescales.

 

The Joint Committee were advised that the 2018/19 residual waste treatment contract reconciliation exercise is now complete. During the year, energy prices increased over and above the agreed ceiling price, which resulted in a £232,862.68 income sharing payment to partner authorities. This is the first payment that STWWMP has received since service commencement.

 

Appendix A which was appended to the main report highlights the latest 2019/20 contract year performance. During recent months, service availability has been strong with plant availability rising to 99.98% and turbine availability 97.61%.

 

The Joint Committee were also advised that the exercise to replace the Debt Service Reserve Account (DSRA) with a contingent Debt Service Reserve Facility (DSRF), is progressing. As a result of this change the shareholders of STWER will benefit from receiving cash significantly earlier than anticipated. This also means that STWWMP receives a share of this benefit, as the transaction falls within the scope of the re-financing provisions within the contract.

 

It has been agreed that STWWMP will support STWER to revise the funding arrangements in order to release the DSRA balance and that the STWWMP share of the gain is extracted through and ongoing reduction to the Unitary Charge. This reduction will be allocated to each authority using the cost sharing principles agreed in the Inter Authority Agreement.

 

The reduction to the Unitary Charge will generate revenue savings for each partner authority and is projected that the joint benefit will be £0.24m per annum and £4.8m over the remainder of the contract.

 

STWWMP continues to work closely with financial and legal advisors (Local Partnerships and Pinsent Mason) to implement the transaction. The costs of this support are funded prior to calculating and sharing the gain, meaning that STWWMP will be reimbursed for any professional fees that are incurred. The exercise is scheduled to be completed in September 2019.

 

Discussions with representatives from the Department for Environment Food and Rural Affairs (DEFRA), STWER, and Willis Towers Watson insurers involving the joint insurance cost reports associated with the RWTC are ongoing.

 

During the contract year 2019/20, no Environment Agency visits to the Waste Transfer Stations have taken place, no environmental breaches were reported, and no CCS scores were applied. All sites remain in Compliance Band A.

 

The Joint Committee were advised that the RWTC affords provision for SUEZ to help to improved local prosperity across the partnership area by promoting vacant posts within their facilities. The Economic Development Service at Gateshead Council continues to receive information on local vacancies, which are then cascaded to partner authorities for circulation to their client base. Local Vacancies are also highlighted at the Jack Crawford House and Campground Community Liaison Groups to enable opportunities to be circulated across community contacts.

 

SUEZ are currently in the process of recruiting a weighbridge operator for the Campground site. Plans are also in place to review the Apprenticeship provision at Lines 4&5.

 

STWWMP remains committed to an ongoing programme of community education and engagement, managed by Groundwork North East & Cumbria (GNEC) at the visitor and education centre, the energy-from-waste facility, and through outreach activities held in local schools and community settings.

 

Between April and July 2019, 2983 local residents, children and young people, and community group members took part in waste awareness events, activities and site visits.

 

The MRF contracts continue to be monitored closely by the joint partnership team. In July, the Sunderland City Council MRF contractor, J&B Recycling Ltd, acquired a new material delivery site at Monument Park, Washington. The new site is adjacent to the previous site, therefore there has been no disruption to the blue bin collection service or the delivery of materials by the council to the contractor.

 

Appendix B appended to the main report highlighted the latest 2019/20 performance (April – July 2019) for materials collected by each partner authority in the kerbside ‘blue-bin’ recycling service. The results are broken down to demonstrate the paper collected separately in the inner box and the comingled materials collected int the main section of the blue bin.

 

The Joint Committee were advised that the comingled recycling tonnages in each partner authority continue to fluctuate, but paper tonnages collected separately in the inner caddy continue to fall when compared to the same period last year. The amount of paper collected separately by the three partner authorities is currently 11.1% of the overall tonnage. This compares to an average of 20.3% in 2014.

 

Appendix B appended to the main report, also highlighted MRF recycling and recovery rates (for comingled materials only) since Quarter 1 2018/19. Recycling performance has generally remained at similar levels in Gateshead and South Tyneside. Sunderland City Council’s recycling rate has improved over recent quarters and the council continues to identify actions to help increase their recycling rates and reduce contamination rates.

 

The recycling trial that commenced in February on a single collection round in both Gateshead and South Tyneside is enabling around 2,400 households to recycle paper and cardboard materials together in a separate, additional, wheeled bin. Details of the tonnage of paper and cardboard (known as mixed fibre) that has been collected since the start of the trial was presented to the Joint Committee for information. The data, which has been provided by the contractor (Palm Recycling Ltd) shows that the overall tonnage collected during the trial is comparable to the same period pre-trial. However, the quality of the recycling has improved dramatically, which has resulted in more materials being sent for recycling, and therefore, less contamination/rejected materials that would require alternative disposal methods.

 

The Waste and Resources Action Programme (WRAP) are supporting STWWMP to evaluate the trial and their analysis is anticipated by the end of September. As part of this process, residents participating in the trial have been asked for their views on the trial’s collection model.

 

Although the trial is taking place in Gateshead and South Tyneside, the trial feedback and results will benefit all three partner authorities and will be used when evaluating future service delivery models.

 

The latest HWRC recycling performance for 2019/20, excluding inert materials, such as rubble were tabled for information. The Joint Executive were advised all HWRC contractors continue to explore whether additional materials disposed at sites can be recycled and further improve recycling performance.

 

The partner authority HWRC contracts with SUEZ and Remondis are set to expire at the end of March 2020. The joint partnership team has arranged for a joint procurement exercise to take place, which includes options for further joint working on HWRC contracts. Contract documentation is currently being finalised and the new tender is due to be issued in October 2019.

 

The Joint Executive Committee were informed that the garden waste kerbside collection service resumed in all three partner authorities in April 2019. Contract management meetings continue to be held with service providers at the various facilities which also include Health & Safety site inspections.

 

The regional contract procured through the North East Procurement Organisation (NEPO) for the member authorities for the collection and management of Waste Electrical and Electronic Equipment (WEEE) and batteries is currently out to tender.

 

The current framework ends on 31 December 2019 and the next contract is scheduled to commence from 1 January 2020. The term of the new contract is 36 months, with an option to extend for a further 2 x 12 months. This is to allow time for current consultations to be carried out by central government and enable consideration of any new policies or statutory obligations which may result.

 

The contract covers the following categories of WEEE:

 

·         Large Domestic Appliance (LDA);

·         Fridges and Freezers (to include commercial type and ammonia units);

·         Small Domestic Appliances (SDA);

·         Visual Display Equipment;

·         Fluorescent Lighting Tubes; and

·         Post-Consumer Batteries

 

Further updates will be provided as the procurement process progresses.

 

The Joint Executive Committee were also advised on a new section now included in the report; the Annual Recycling Performance. The recent audit undertaken by the Lead Partner Internal Audit Service considered STWWMP ancillary contract management. The final report found that the control systems in place were found to be operating well.

 

However, the report highlighted two ‘best practice’ recommendations, which included that STWWMP report overall recycling performance in each partner authority to the Joint Executive to inform members and assist in identifying areas where the partner authorities may be able to improve performance.

 

In response, STWWMP agreed to report overall recycling performance to the Joint Executive Committee in September each year, once Waste Date Flow returns have been validated. All local authority overall recycling performance is generated by the national Waste Data Flow database, using the definition of the former national performance indicator NII92 to calculate the percentage of household waste sent for reuse, recycling or composting.

 

The Joint Executive Committee were advised that the partner authority NII92 results for 2018/19 are:

 

·         Gateshead                              31.6%

·         South Tyneside                       30.7%

·         Sunderland                              27.1%

 

RESOLVED -

That the Joint Executive Committee noted the contents of the report.

 

 

 

 

 

Supporting documents:

 

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