Purpose

Cabinet is recommended to approve an 8 year
extension to the Neighbourhood Services Contract.
 
 

Content

Cabinet:
 

(1) 
agreed to the extension of the existing
Environmental Services Contract for a further eight years from 30th
September 2027 to 29 September 2035; as permitted under the terms
of the original contract;
 

(2) 
delegated the final negotiations of the contract
extension to the Strategic Director of Neighbourhoods and
Environment and the Strategic Director of Resources; and
 

(3) 
agreed an increase in the annual budget of
£1.6 million from 30th September 2027 to fund the contract
extension.
 
Options & Alternatives
Considered
 
Current contract duration and
the ability to extend - the initial term of the Contract is for 8
years, with the ability to extend for up to a further 8 years. The
duration of the extension(s) may range from 1 year to 8 years,
subject to not exceeding the maximum possible contract length of 16
years.
 
Option A: do nothing. This
option is not recommended as it would result in the Council not
fulling its statutory obligations.  The
services are currently delivered as part of one contract which will
expire on 29th September 2027. The present contract includes
statutory functions and services which the Authority has a duty to
discharge.  Failure to do anything would
expose the Authority to risk of either non-compliance with its
statutory duties or by default having to provide the service
directly.
 
Option B: This is the preferred
option. Extend the current Environmental Services Contract with the
existing provider FCC for 8 years. 8 years is the preferred period
of time, this is based on the life span
of a dustcart. Dustcarts are operationally viable and sound from
new over a period of 8 years. This 8
year lifetime of vehicles is recognised within the
contract.
 
Option C: Extend the current
Environmental Services Contract with the existing provider for a
period of less than 8 years. This option is not recommended.
Negotiations have concluded that extending the contract by 8 years
is the most advantageous both operationally (including because of
the life of vehicles as set out above) and financially (as set out
in Appendix 1). 
 
Option D: Full procurement,
including competitive dialogue. This will include procurement costs
of between two to four hundred thousand pounds and the likelihood
of an increase in the contract price of over 16%. There are
currently five main companies who provide contracts of this size
and nature (FCC, Veolia, Suez, Biffa and Serco). There is a risk to
the Council, that a full procurement would most likely result in a
higher price than the extension offer
and the same provider remains. A new provider will also likely
insist on introducing their own waste collection solution which
would involve a large service change. 
This could include changing days of collections again and a new
collection model; which could lead to
disruption for residents.
 
Option E: Bring the services
in-house. This would lead to an increase in costs over the
£1.6 million proposed in option B due to pension costs and
the lack of skills and infrastructure to be able deliver a directly
provided service.