Peterborough ends Amey waste contract 16 years early
Peterborough City Council is bringing its 23-year waste management contract with Amey to a premature end, just seven years in, at a cost of £500,000.
The contract with infrastructure consultants Amey will be mutually brought to an end at a cabinet meeting today (18 December) - 16 years early - with the £500,000-cost coming out of the Council’s reserves to replace the company it had charged with collecting the city’s bins and providing other street cleaning services.
But a report set to be agreed by the council today states: ‘Over the course of the past two years the EMS contract has seen several operational challenges and it has been recognised by both the Council and Amey that the contract is no longer fit for purpose. It was procured prior to the significant financial challenges that have resulted from government’s austerity cuts and increased demands on services. As such both parties have informally agreed to mutually terminate the contract from August 2018 subject to agreement on the terms of a deed of termination.’
The council will now retender for the contract, and hopes to have a replacement in place by September 2018. One of the key objectives of the new contract will be to increase the levels of and quality of recycling to reduce potential treatment costs. The council claims that the decision to bring the contract to an end was made on account of the city’s stuttering recycling rate - only 45 per cent compared to Amey’s target of 60 per cent - and a desire to seek out a deal that was better value for money.
The change is forecast to cost £500,000, despite the mutual termination meaning that Amey will not be due any compensation.
The decision taken by the Conservative majority on the Council has been seized upon as evidence of mismanagement by opposition groups in City Hall, with Labour’s council group leader Cllr Ed murphy telling the Peterborough Telegraph: “It is my opinion that this half a million would be better spent on bringing the services in-house and improving services in Peterborough. Contractors have to make a profit whereas the city council could provide the service itself or with other public sector partners, and all the money spent would be used on delivery.”
Council officers did consider taking the waste contract in house, but reported that such a move would ‘require new investment in specialist and managerial resource and is highly unlikely to be an affordable option’.
Liberal Democrat group leader Cllr Nick Sandford backed call for Peterborough’s waste services to be brought in-house, adding: “We were told 12 months ago they were terminating Amey’s contract and were going to make £100,000 worth of savings by going into a joint venture arrangement, and that’s not happened. It all seems quite chaotic what’s going on.”
In a bid to dampen accusations of mismanagement, a spokesperson for the Council denied that the reason for tearing up the contract was due to the fact that the contract had failed, but that the council’s financial situation had “changed dramatically since the contract was originally put in place.
While putting forward “the council’s current recycling performance, which does not meet the targets set out in the contract” as a “key driver” in cancelling the contract, Cllr Gavin Elsey, the cabinet member for waste and street scene on the council, reiterated the council’s financial position and its bearing on the premature termination, asserting: “It has been clear for some time that our contract is no longer meeting either of our needs and is no longer compatible with the tough financial landscape we are operating in.”
A spokesperson for Amey, whose staff will be consulted on their futures as the tendering process looks set to begin, confirmed that the contract “no longer meets the needs of either party”, while assuring residents that it was “committed to delivering the highest possible standards of service until the current contract ends.”
Peterborough City Council’s decision to bring its contract with Amey to an early close is the latest in a number of high-profile, long-term waste management contracts to fall by the wayside this year, with Sheffield City Council deciding to break its 35-year contract with Veolia in January, while the Greater Manchester Waste Disposal Authority (GMWDA) announcing that it would be terminating its 25-year private finance initiative (PFI) contract with Viridor Laing in April.