Purpose

Sefton Council currently operate a 'Self-Supply' Licence in the
procurement of water & sewerage services, which in short means
we deal directly with our Wholesaler, United Utilities without
using a retailer. To ensure full legal compliance the Council
utilizes the services of a Managing Agent ‘Waterscan’.
This arrangement, which has operated now for almost 5 years, has
brought financial savings, billing service improvements and allowed
the Council to have a greater voice in the marketplace. This report
seeks permission to 1. continue to hold our Self Supply licence
(surrender of the licence would be at Sefton’s discretion)
and 2. the renewal of the contract with the Managing agent (via
Waiver) for a period of 4 + 1 years, as this service is essential
to the maintenance of the licence conditions. Waterscan are the
only credible, specialist company that meets the Council’s
needs and offer a cost effective and efficient service.
 

Decision

Decision:
Sefton Council currently operate a
'Self-Supply' Licence in the procurement of water & sewerage
services, which in short means we deal directly with our
Wholesaler, United Utilities without using a retailer. To ensure
full legal compliance the Council utilizes the services of a
Managing Agent ‘Waterscan’.
This arrangement, which has operated now for almost 5 years, has
brought financial savings, billing service improvements and allowed
the Council to have a greater voice in the marketplace. This report
seeks permission to 1. continue to hold our Self Supply licence
(surrender of the licence would be at Sefton’s discretion)
and 2. the renewal of the contract with the Managing agent (via
Waiver) for a period of 4 + 1 years, as this service is essential
to the maintenance of the licence conditions. Waterscan are the only credible, specialist company
that meets the Council’s needs and offer a cost effective and
efficient service, be noted.
Reason(s) for the
Decision(s):
(1) The continuation of the Self supply
licence which is deemed to be ‘rolling’ (without end
date); and that the contract can only be terminated should
Sefton Council choose to revoke its licence or break the terms of
business be noted; and
(2) Authority be granted for the Executive Director of
Regeneration, Economy & Assets, in consultation with the
Cabinet Member for Regeneration, Economy and Skills, to
directly award the contract for a managing agent to Waterscan via waiver, for a maximum period of 5
years comprising an initial 4 year
period with an option to extend for up to 1 period of 12
months.
(3) Authority be granted for the Executive Director of
Regeneration, Economy & Assets, for the signing of
associated contracts and agreements.
Alternative
Option(s) Considered and Rejected:
Option 1: Do nothing – Under
self-supply, the wholesale contract would not expire under the
terms of the licence agreement. Sefton would still be required to
operate under the terms of the licence. Allowing the current
Managing Agent contract to expire (30 September 2025) would mean
Sefton Council would operate a self-supply licence unsupported as
there is no in-house capacity to deliver this service. This would
expose the Council to significant risk of (a.) paying water &
sewerage charges without validation and (b.) breaching licence
conditions which could lead to significant financial, legal and
operational demands and risks.
Therefore, this option was rejected.
Option 2: Exit self-supply and return to the
retail market – Existing retailers could displace
all of the Managing Agent functions
(meter readings, billing and customer service). However, under the
current arrangement, Sefton have experienced benefits in improved
data collection, financial savings and now has a ‘voice in
the market’. Returning to the retail market would mean Sefton
would lose these benefits. Annual cost savings have been and
continue to be enjoyed. Having a retailer costs more overall than
having a licence with a manging agent.
Therefore, this option was rejected.
Option 3: Carry out an open procurement
exercise for the appointment of a managing agent – This is
not an option available to Sefton currently. Only one suitably
qualified managing agent operates in the market (Waterscan) as confirmed by Water Regulator OFWAT
and the market operator MOSL.
Therefore, this option was rejected.