To provide an update to Cabinet following receipt of detailed submissions from bidders at the Invitation to Submit Detailed Solutions (“ISDS”) stage of the procurement process, to set out options for the way forward and seek agreement to a revised set of Core Specification Principles based upon the following circumstances:

·      Greater Essex is now part of the Government’s Priority Programme for Devolution which includes responding to Local Government Reorganisation (LGR), which has been announced since the commencement of the procurement process and the risk and uncertainty that this brings; and

·      the detailed solutions received from the bidders indicate a contract price that is not affordable to the Council.

RESOLVED that, following consideration of the legal advice and options available (in report B.1) and following its assessment and analysis of the risks and their mitigations, and the contents of that report (B.1), Cabinet formally -

(a)  notes the extensive work undertaken on the procurement process so far, both by Officers and external consultants following the Core Principles adopted in July 2024 and subsequent decisions;

(b)  acknowledges the impact of Greater Essex being part of the Government’s Priority Programme and responding to Local Government Reorganisation, the Council must reassess its position with regards to the duration of the contract term;

(c)  acknowledges that, in addition to (b) above, the information received through the current procurement exercise to date would place the Council in the position of not being able to reasonably afford the cost should it decide to continue with the service as currently specified;

(d)  agrees that, in addition to (b) and (c) above, to balance associated risks, uncertainty and value for money alongside affordability, the option to purchase the vehicle fleet and the risk sharing option in respect of DMR will no longer be considered;

(e)  commits to ensuring it continues to fulfil its statutory duties and to provide a Waste Collection service beyond the ending of the current contract in March 2026 and complying with the additional requirements of the Environment Act 2021 from April 2026;

(f)   subject to (b) to (e) above and having considered the legal advice and options available (in Part B) and following its assessment of the advice, analysis of the risks and their mitigations, and the contents of this report, agrees to continue with the existing procurement process but with amendments to the contract length and specification (Option 1) based on the following key principles:

(i)              the contract term will be reduced to 3 years with an option for an extension period of 2 years based upon responding to the risk and uncertainties of LGR;

(ii)             a reduction in the service specification to ensure affordability and comply with our statutory duty to provide a waste collection service and street cleaning service;

(iii)            the Council will not take any financial risk on the value of DMR material collected (Service Delivery Option A); and

(iv)            the Council will not fund the up-front purchase of any vehicle fleet (Vehicle Funding Option B).

(g)  in addition to (e) and (f) above, a revised set of Core Specification Principles, as set out in Table 3 of the Portfolio Holder’s report (A.1), will form the basis of the revised detailed contract specification;

(h)  authorises the Corporate Director (Operations and Delivery), in consultation with the Leader of the Council, the Portfolio Holder for Environment & ICT, the Portfolio Holder for Assets and Community Safety, the Section 151 Officer and the Monitoring Officer, following the dialogue stage, to determine the detailed revised service specification for the Invitation to Submit Final Tenders stage, ensuring the principles set out in (f) above are adhered to;

(i)    approves that an additional budget of £100k be made available for consultancy support funded via the Corporate Investment Fund, taking the total budget to date to £0.400m; and

(j)    acknowledges that a further report will be presented to Cabinet following the evaluation of final tenders, which will include proposed financial / budget adjustments as necessary.

Cabinet considered a report of the Environment & ICT Portfolio Holder (A.2) which provided it with an update following receipt of detailed submissions from bidders at the Invitation to Submit Detailed Solutions (“ISDS”) stage of the procurement process. The report also set out options for the way forward and sought Cabinet’s agreement to a revised set of Core Specification Principles based upon the following circumstances:

·         Greater Essex was now part of the Government’s Priority Programme for Devolution which included responding to Local Government Reorganisation (LGR), and which had been announced since the commencement of the procurement process and the risk and uncertainty that this brought; and

·         the detailed solutions received from the bidders had indicated a contract price that was not affordable to the Council.

Cabinet recalled that, at its meeting held on 26 July 2024, it had agreed to the commencement of a procurement process to appoint a contractor to deliver the Council’s waste and recycling collection and street cleaning service from 2026 onwards, based upon a set of principles, which had translated into a specification for detailed solutions to be submitted against.

Members were reminded that the Council’s project team had been supported throughout the procurement process by four external organisations, chosen for their experience in supporting similar procurements elsewhere.

It was reported that the procurement process had largely adhered to the timeline previously suggested and that it was now well under way and the first detailed solutions had been submitted by the bidders. However, the price for those detailed solutions was not affordable by the Council, being potentially over £7m per annum above the current associated budgets.

Cabinet was informed that now that the detailed solutions had been submitted, Officers would be entering into competitive dialogue discussions with each individual bidder, after which the Council’s requirements would be finalised, and final detailed solutions (tenders) would be invited. As part of the process so far, Officers had provided feedback to the bidders involved on their submissions to date and had held two dialogue sessions with them aimed at reducing the contract price. Whilst price reductions were possible, they would not bring the price to a level that was affordable to the Council over the proposed contract term.

Members were aware that, since the commencement of the procurement process, central Government had announced proposals for Devolution and Local Government Reorganisation (LGR) and that this Council, being part of Greater Essex, was now on the Government’s Priority Programme. LGR, in particular, had cast a question over whether this Council should now, at this stage, be entering into a minimum  eight-year contract when the councils it was likely to be merged with operated different delivery models for services for waste including in-house provision. The new unitary authority was also likely to become both a waste collection and a waste disposal authority (as defined in the Environmental Protection Act 1990).

It was felt that a shorter contract term would allow the new unitary authority the scope to determine how such services would be aligned much earlier in its life, potentially realising better value for money and greater efficiencies sooner.  Those were options explored earlier in the process but before Greater Essex had been invited to submit LGR proposals.

Cabinet had been made aware that the Council had received External Legal Advice on options on the way forward, which  had been contained within a separate “Part B” report (due to legal professional privilege), and that Cabinet had ensured that an assessment of the advice, analysis of the risks and their mitigations had been undertaken prior to the recommendations set out in this Portfolio Holder report (A.2) being determined.

It was recommended by the Portfolio Holder that the Core Specification Principles be altered to reflect the following:-

Ø  a shorter contract term;

Ø  a reduction in specification aimed at reducing the level of risk and uncertainty whilst increasing affordability;

Ø  that the Council did not take any risk on the value of the dry mixed recycling (DMR) collected at the kerbside; and,

Ø  that the Council did not fund the up-front purchase of any vehicle fleet.

In order to ensure that the Council continued to progress the future of this important statutory service, meeting its affordability envelope whilst complying with the Environment Act 2021 requirements due to be introduced during 2026 and also taking due account of the implications and processes of LGR:-

It was moved by Councillor Smith, seconded by Councillor M E Stephenson and unanimously:-

RESOLVED that, following consideration of the legal advice and options available (in report B.1) and following its assessment and analysis of the risks and their mitigations, and the contents of that report (B.1), Cabinet formally -

(a)  notes the extensive work undertaken on the procurement process so far, both by Officers and external consultants following the Core Principles adopted in July 2024 and subsequent decisions;

(b)  acknowledges the impact of Greater Essex being part of the Government’s Priority Programme and responding to Local Government Reorganisation, the Council must reassess its position with regards to the duration of the contract term;

(c)  acknowledges that, in addition to (b) above, the information received through the current procurement exercise to date would place the Council in the position of not being able to reasonably afford the cost should it decide to continue with the service as currently specified;

(d)  agrees that, in addition to (b) and (c) above, to balance associated risks, uncertainty and value for money alongside affordability, the option to purchase the vehicle fleet and the risk sharing option in respect of DMR will no longer be considered;

(e)  commits to ensuring it continues to fulfil its statutory duties and to provide a Waste Collection service beyond the ending of the current contract in March 2026 and complying with the additional requirements of the Environment Act 2021 from April 2026;

(f)   subject to (b) to (e) above and having considered the legal advice and options available (in Part B) and following its assessment of the advice, analysis of the risks and their mitigations, and the contents of this report, agrees to continue with the existing procurement process but with amendments to the contract length and specification (Option 1) based on the following key principles:

(i)              the contract term will be reduced to 3 years with an option for an extension period of 2 years based upon responding to the risk and uncertainties of LGR;

(ii)             a reduction in the service specification to ensure affordability and comply with our statutory duty to provide a waste collection service and street cleaning service;

(iii)            the Council will not take any financial risk on the value of DMR material collected (Service Delivery Option A); and

(iv)            the Council will not fund the up-front purchase of any vehicle fleet (Vehicle Funding Option B).

(g)  in addition to (e) and (f) above, a revised set of Core Specification Principles, as set out in Table 3 of the Portfolio Holder’s report (A.1), will form the basis of the revised detailed contract specification;

(h)  authorises the Corporate Director (Operations and Delivery), in consultation with the Leader of the Council, the Portfolio Holder for Environment & ICT, the Portfolio Holder for Assets and Community Safety, the Section 151 Officer and the Monitoring Officer, following the dialogue stage, to determine the detailed revised service specification for the Invitation to Submit Final Tenders stage, ensuring the principles set out in (f) above are adhered to;

(i)    approves that an additional budget of £100k be made available for consultancy support funded via the Corporate Investment Fund, taking the total budget to date to £0.400m; and

(j)    acknowledges that a further report will be presented to Cabinet following the evaluation of final tenders, which will include proposed financial / budget adjustments as necessary.