To agree to award preferred bidder status for the provision of the Lot 1 Services (Waste Collection, Street Cleaning, Winter gritting and Fleet procurement and maintenance) and Lot 2 (Parks, grounds maintenance, cemeteries and tree inspections for a period of eight years with the option to extend for a two further periods of eight years (twenty four in total) and to agree the service changes as a result of the contract award.
Councillor Tony Shields raised concerns before the start of the presentation that due to the recent vote to leave the European Union, that there would be potential changes in the current EU legislation in regards to waste collection and disposal, and questioned how appropriate it was to vote on an 8 year contract at this time of uncertainty. It was pointed out that the South London Waste Partnership contract award was unaffected by the Brexit vote.
The South London Waste Partnership of four boroughs (Sutton,Kingston, Merton and Croydon) had been involved in the procurement of the proposed waste collection contract, and two of these Boroughs (Sutton and Merton) in the procurement of the Parks maintenance contract, with options for the other two Boroughs to join later. The procurement had been undertaken over a period of time with appropriate legal and financial advice in place from experienced consultants.
It was pointed out that due to large-scale government cutbacks in funding impacting on all councils nationwide, that harmonisation of waste collection across the four Boroughs offered substantial savings. In Sutton, the savings were worth £1.5m per year after the first year or over £10 m over eight years.
Matt Clubb, Executive Head of Environment Commissioning gave a presentation on the overview of the Lot 1 (Waste Collection) and Lot 2 service bids (Parks maintenance). The Executive Head of Environment Commissioning advised that the 8 years would commence from 2017, with an option to extend for another 8 years after that, and then again, bringing the total to 24 years. It was advised that Kingston Council had agreed the proposal at their Committee Meeting, and it had been endorsed by the South London Waste Partnership Joint Committee, with decisions going to Merton Council on 4 July (post meeting note: this was called in), and Croydon Council on 11 July (post meeting note: this was agreed).
An overview was given of the proposed changes, as well as the benefits of the proposal. Service changes were planned for April 2017 for the London Borough of Sutton.
Councillor NighatPiracha asked if there was anything that would remain in-house, and who should councillors contact with issues they received from residents. The Executive Head of Environment Commissioning advised that there would be a client team responsible for managing both contracts, and any issues would be directed to that team. Some elements would remain in house in Lot 2 such as tree inspections, and parks equipment decisions which currently came under Local Committees.
Councillor Tony Shields expressed concern that the waste handling regulations were from the EU and therefore may change.
The Strategic Director of Environment, Housing and Regeneration advised that officers had received specialist legal advice, with clauses allowing for changes in legislation, and a lot of the EU current legislation was also enacted in UK law.
Councillor Manuel Abellan asked how the performance of the contractor would be monitored, and asked what could be done to reassure those residents who were concerned about the increase in the number of bins required at their property.
The Executive Head of Environment Commissioning responded that the proposed preferred bidder Veolia manages over 40 contracts within the UK and approximately a dozen within London, as a large company which regularly delivers these services in a number of places. There would be a clienting team which would ensure that standards set by the SLWP were met (these were appended to the Committee report), and monetary deductions would be made if these standards were not met. If the standards were not met, the contract could be ceased.
The Executive Head of Environment Commissioning advised that the service would continue to work flexibly with residents, for example, in those areas with steep steps where residents could not use wheeled bins.
Councillor Joyce Melican asked what would happen in those houses with reduced space for wheeled bin storage. There was also concern expressed in regards to the communications plan as this was a big change. Councillor Melican asked how this would be communicated to residents.
The Executive Head of Environment Commissioning answered that the communications plan was being developed around the decision, which would then be fine-tuned, and enacted at appropriate times leading up to the award of contract (if agreed) and then leading up to the launch of the service.
Councillor Hanna Zuchowska raised concern about space, given the increase in bins and asked if the boxes were stackable. Councillor Zuchowska also asked if there was anything in place regarding nappies.
The Executive Head of Environment Commissioning advised that the recycling boxes are stackable, and that neighbouring boroughs with fortnightly collections had not experienced significant problems with nappies, and reminded the committee that the council did run a cloth nappy scheme.
Councillor Neil Garratt asked why there had been no consultation with residents.
The Executive Head of Environment Commissioning answered that there was a consultation in 2012 in regards to the food waste service, the results of which reflected that a large percentage of residents wanted a food waste service (72%), but that figure decreased significantly when asked if they would pay for that service. The SLWP contract offered the opportunity for a weekly food waste collection at no extra cost to the resident, due to economies of scale and harmonisation across the four Boroughs.
Councillor Paul Wingfield asked what would happen with residents with mobility issues. The Executive Head of Environment Commissioning advised that the 1300 residents currently receiving an assisted collection would be reviewed through the process.
Councillor Tony Shields raised concern at the lack of attempt to save the weekly collections, and raised concerns with due diligence for the lot 2 contract.
The Executive Head of Environment Commissioning outlined the process for selecting the preferred bidders, which followed strict procurement rules established in law. The Executive Head of Environment Commissioning pointed out that the market had been asked to put forward solutions, and all the solutions involved fortnightly residual waste collections and weekly food waste and dry recycling collections. It was also pointed out in discussion that Kingston, Croydon, Bromley and Bexley already offered this in South London, as did over 50% of councils nationwide.
Councillor Tony Shields asked what value would be handed over to the preferred bidder in relation to vehicles.
The Executive Head of Environment Commissioning advised that the existing wheeled bins would continue to be used plus the additional smaller bins required for food and dry recycling, the costing of which was already included. The current vehicles will also be used, but are coming to the end of their useful life, and split-body vehicles would be required for the new services. The Local Authority would be providing the capital for this, which is included in the costings provided.
Councillor Neil Garratt asked what would happen if the contractor experienced financial difficulty, giving concern that LBS staff and vehicles would then be with the contractor.
The Executive Head of Environment Commissioning responded that in the unlikely event that this happened, they must provide the council with a parent company guarantee to run the service for a set period of time (usually 12 months) to give the council time to either bring the service back in-house or to re-procure. All current staff would be TUPE’d over to help with the continuity of providing the services. But the procurement process was set in train to find suitable contractors with an evidenced record in each of the Lots, and this involved a number of filtering procedures such as competitive dialogue (as outlined in the Committee report).
RESOLVED that the Environment and Neighbourhood Committee:
2.1 Agreed to award Preferred Bidder status to Veolia (ES) UK Limited for the provision of the Lot 1 services (waste collection, street cleaning, winter maintenance and vehicle procurement and maintenance) for a period of eight years with the option to extend for two further periods of eight years (twenty four in total) to commence from April 2017.
2.2 Agreed to award Preferred Bidder status to The Landscape Group Limited for the provision of Lot 2 services (parks, grounds maintenance, cemeteries, verges and tree maintenance) for a period of eight years with the option to extend for a two further periods of eight years (twenty four in total) to commence from February 2017.
2.3 Agreed that Amey LG Limited is appointed as the Reserve Bidder for the Lot 1 services and Veolia (ES) UK Limited is appointed as the Reserve Bidder for the Lot 2 services.
2.4 Agreed delegation to the Strategic Director of Environment, Housing and Regeneration, based on the principles at 4.33 of this report and following fine tuning, to agree the Inter Authority Agreement (IAA) and the arrangements relating to the management of the contracts.
2.5 Noted the service changes detailed in paras 4.9 - 4.21.
2.6 Approved the charge for the Green Garden Waste service, as detailed at para 4.13 of this report, from April 2017.
2.7 Noted the requirement to advertise the Council’s intention to grant leases for those LBS properties (which include open space) within scope as detailed at Appendix 9 of this report.
2.8 Agreed that the Preferred Bidders are permitted to start consultation with staff and union representatives, prior to contract award, about any proposed changes to employment terms and conditions.