Agenda item

-       Update on Contract 24/25

-       Year ahead for 25/26

-       25/26 Budget Requirement

Consideration was given to report included within the agenda pack, which highlighted the following matters relating to the Joint Waste Private Finance Initiative (PFI):

·       Governance

·       Financial

·       Contract Delivery

·       Complaints

·       Environmental Report

·       Other Updates/Issues

·       Ferrybridge

·       Barnsley Transfer Station- Grange Lane

·       Health and Safety

·       Community Education Liaison Officer (CELO)

·       Joint Working and BDR Support 2025-2026.

Paul Hutchinson, BDR Manager introduced the report and provided a high-level overview. He explained that the PFI Waste Treatment Facility at Manvers had been running since 2015, this was a joint facility used by all three local authorities, to deliver residential waste to be processed. The BDR Board had had oversight of the project since the tendering stage, there was fifteen years left on the contract, with a potential extension of five years. To date, the site was successful, unlike the majority of other PFI’s. However, the contract was not profitable, as a result the contract had been sold twice to date.

In relation to the waste treatment performance, there had been very few issues contractually and minimal risks. There had been a request arising from the sale, for the Parent Company Guarantee to be changed from Renewi to Biffa. After seeking advice, the local authority declined the request, this was due to the new proposed guarantor not fulfilling the requirements of a guarantor, as set out in the contract.

Following changes in legislation, the Councils were working with the contractor for changes to the facility to meet contractual requirement and environmental permits. These included work on the ammonia scrubbing system.

A briefing paper was circulated as part of the agenda, which provided an update on the potential impacts from the changes in law in relation to the Potential Emissions Trading Scheme (ETS.) The local authority was watching the situation and had raised it as a risk via the finance department. A future update would be provided to the Board when any further details arose.

In relation to finances, there was two budgets for the PFI. There was a £20,000 underspend in the last financial year, this was mainly due to advice from legal services and technical savings. Members were advised that approval was required for the budget for the 2025/2026 financial year, it was anticipated that the same level of budget agreed in 2024/2025 would suffice for the upcoming year. An increase in budget was not anticipated, although there were projected increases relating to fee’s for legal services, and pay rises for members and administrations, however this was already budgeted. The PFI Unitary charge had an annual indexation mechanism that was set by the January RPIX figure. The January 2025 figure was 3.2%. Waste arisings were anticipated to remain at the same levels as 2024/25, with no unexpected or unanticipated additional costs, expenditure, or income.ind

The PFI Unitary charge had an annual indexation mechanism that was set by the January RPIX figure. The January 2025 figure was 3.2%. Waste arisings were anticipated to remain at the same levels as 2024/25, with no unexpected or unanticipated additional costs, expenditure, or income.

The Herren Index, European Spot Gas Markets Price Assessment tracked gas prices, this was at a cost of a £28,000 subscription which was shared with Wakefield Council. It was advised that a subscription was not required for two years, as it was anticipated that there would be no gain over the next two years.

In relation to contract data, targets had been successfully met. For recycling there was a default trigger of 10%, this was currently at 14.35% for the year. The diversion from landfill was 98.31%, with the annual target set at 96.68%, it was advised that a small fraction was required to go to landfill, an example was provided of bulky items such as mattresses.

In relation to complaints, it had been a very good year in comparison to previous years. The main issues were the noise of the plant travelling from Bolton to Dearne, odour and flies, due to the perception of a fly ingress into Bolton. The contractor had worked hard to manage the flies and had implemented entrance curtains, thorough checks for gaps and changed the fly delivery treatment to treat in the opposite direction, as a result there had been a major reduction in flies. The contractor had worked with Next to address their concerns relating to flies, and as a result an official thank you had been received for all of the reduction work completed. The complaints and concerns of the community had also reduced.

There was a requirement for the industry to reduce emissions with regulations being made more stringent, an example was provided of ammonia. The contractor wanted to trigger the changing law clause under the contract to claim against the local authority, as they felt it should not be their responsibility to pay for the costs towards this. The local authority checked that the correct clause was being sighted and would do due diligence on the clime to mitigate where appropriate. The local authority would assess what system was in place currently, what system Biffa would like to bring in and whether it’s appropriate and sufficient. The local authority was waiting for data to be provided by Biffa, relating to their proposed technical solution, a further update on this would be provided in due course.

Every two years the insurance for the site was reviewed, to date five separate cost reports had been sent in and rejected by the local authority. This year the rejected cost report had not been pursued further; this was for the cost of additional insurance. This was not unique to this specific PFI and was very common across PFI’s.

A question was asked by a member relating to the costs of newer employee’s being lower than previous employee’s, this was attributed to the grading salary band system and how all new employees began their role on the lower end of the salary band and would gradually move up the scale every two years.

Resolved:-

1)    That the update be noted.

2)    That the 2025-2026 budget be maintained in line with previous years and agreed.