Sheffield could scrap Veolia contract 19 years early

Sheffield City Council leaders are considering proposals to end the authority’s waste contract with provider Veolia 19 years early.

Sheffield could scrap Veolia contract 19 years early
The council is currently in an integrated waste management contract (IWMC), which was signed in 2001 and is set to expire in 2036. The service is currently responsible for collecting and disposing of waste, running household waste recycling centres, and managing and operating the council’s incineration facility.

However, a review was commissioned last year to consider ending the contract, after the council found that it had not been possible to achieve the level of savings required to ensure the contract can operate within the council’s reducing budget, with the contract for all services in 2017/18 budgeted at a net cost of £27 million.

Proposals are to be discussed by Sheffield council next week (18 January), when members will consider alternative solutions to provide waste services in the city.

The aim of the review was to find ways to reduce the cost of waste services and allow for a more responsive, flexible and sustainable service in the future. If the council decides to end Veolia’s contract, new services are to be procured with a view to commencing after April 2018.

Veolia currently employs around 180 people in Sheffield, and the council says it will be consulting with the affected workforce to discuss the proposed changes, if they are approved.

Until changes are finalised, waste and recycling services will continue as normal, and the contract with Veolia will remain until a new service provider is in place.

Potential costs of breaking the contract were not included in the public report, but are likely to be substantial.

Operating in tough financial times

Councillor Bryan Lodge, Cabinet Member for the Environment at Sheffield City Council, said: “It is no secret that we are operating in very tough financial times and we have to do things differently. Our contract with Veolia, which was signed 16 years ago, is no longer meeting our needs and is no longer compatible with the tough financial landscape in which the government is forcing us to operate.

“In last year’s budget we set out crucial savings targets and unfortunately we have been unable to achieve these savings from the existing contract. We need to find a best-value solution that ensures a quality waste service for Sheffield taxpayers.”

Need for increased efficiencies and more flexibility

The council notes in its review that it believes savings to the cost of the collection service can be achieved through different ways of working, which include introducing policy changes that increase operational efficiencies by offering more flexibility in how the services are delivered.

Its first review recommendation included setting up waste services with seven-year contracts with extensions of up to three years and a requirement for bidders to set out how they will introduce new ways of working to deliver greater efficiencies and continued safe working practices.

The council is also seeking to receive a higher proportion of the income from the waste and electricity that is supplied by the incinerator operated by Veolia. Further changes would be insourcing communications and management systems and setting up disposal contracts according to the amount of waste material in each steam.

Responding to the council’s statement that it was considering cancelling its contract, a spokesperson for Veolia said: “We are proud to stand by our operational record in Sheffield in delivering sustainable environmental performance and value for money whilst minimising risk to the client. Veolia has also always been happy to discuss different service options with the council over the course of our partnership and will continue to work with the authority to deliver efficient services.

“We obviously recognise that this statement by the council to discuss alternative service options will be a concern to our employees and will do our utmost to support them and keep them informed as this matter progresses.”

Waste collection changes

As well as the overall change of contract, the council has also proposed a new collection system, following a public consultation, to deliver a saving to the council, ‘as well as improving the service offered to the residents’.

The main changes proposed by the council include replacing its current 55-litre blue box (for paper and card) with a 240-litre brown recycling bin, which would be used to collect glass, cans and plastic bottles. The 140-litre blue bin that is currently used to collect these materials would be used to collect paper and card.

The council says the changes would mirror those used in other local authorities, as it has the aspiration to work more closely with neighbouring South Yorkshire authorities, aligning waste services where possible, as part of the Sheffield City Region agenda.

The collections would take place on an alternate weekly schedule, but with the recycling container being taken also alternating, meaning that each recycling container would be taken once every four weeks, with fortnightly collections of residual waste. This would allow the council to downgrade from specialist split vehicles that take both recycling streams to standard collection vehicles taking one stream.

Other changes include changing collection times from 7am to 4pm Monday to Friday, to 6am to 9pm, which it says would provide greater flexibility of collection and consequently increased efficiency in the use of collection vehicles, which the council believe would cut costs.

Councillor Lodge commented: “We are confident that, by making changes to our waste policy, we can continue to provide a high-quality service to residents – and provide better value for money at the same time.”

The report due to be discussed next week can be read on the Sheffield City Council website.

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