Agenda item

Report of the Director for Finance. To be introduced by the Cabinet Member for Finance and Corporate Services.

This report will seek a decision on the award of the new non-domestic water contract from 1 October 2024 to 30 September 2028 with an option to extend by one year to 30 September 2029, for the non-domestic buildings in the Council's Corporate and Housing portfolios and Schools that choose to opt-in.

The Cabinet Member for Finance and Corporate Services introduced the report which sought approval from Cabinet to access YPO Framework Agreement 1181 and to use this to call off and procure a contract for non-domestic water and wastewater and ancillary services. This would be used by the Council for the four-year period 1 October 2024 to 30 September 2028, with an option to extend for one year to 30 September 2029.

It was noted that the new contract would use YPO’s 2023-2027 framework agreement which allowed contracts to extend beyond the expiry date of the framework, and it was recommended to use this to award the Council’s non-domestic water and wastewater and ancillary services contract to Anglian Water Business (National) Ltd, trading as “Wave”. The value of the contract was based on current levels of water usage and known demand increases (with Leisure Centres coming back in house) is expected to be c£5m.

It was further noted that the contracts would serve the Council’s non-domestic corporate buildings; non-domestic buildings within the housing portfolio, such as community centres and offices; and schools that have opted-in to the contract. Domestic buildings in the corporate and housing portfolio are excluded. Two leisure centres that have swimming pools were being insourced back to Council management on 1 October 2024 and the water requirement for these would also be included.

In response to a question from the Cabinet Member for Climate Action, Environment, and Transport on what tools and support did Wave provide to help the Council monitor and manage water consumption, it was noted that the Council was aiming to carefully reduce all utility spend. It was explained that there were a lot of options within the contract to reduce water efficiency. This included water audits and water footprinting with a Council process in place to identify high consumption and unusual spikes in consumption to actively investigate.

The Cabinet Member for Children, Schools and Families was pleased to note that schools were able to access this contract.

In response to a question on any sites identified with unexpected high consumption of water, Markfield Park was noted.

RESOLVED

1. To approve the Council entering into an access agreement with Yorkshire Purchasing Organisation (YPO) to enable the Council to access framework agreement 1181, as permitted under CSO 7.01 b) (selecting one or more contractors from a Framework).

2. To approve the award of a non-domestic water, wastewater and ancillary services contract under Yorkshire Purchasing Organisation (YPO) framework agreement 1181, to Anglian Water Business (National) Ltd, trading as “Wave” for the period of four years commencing on 1 October 2024 and expiring on 30 September 2028, with an option to extend for one year to 30 September 2029, up to a value of £5m in accordance with CSO 9.07.1 d) (Contracts valued at £500,000 or more can only be awarded by Cabinet).

3. To approve the resourcing of the Council’s Energy Team’s contract management and procurement costs through a rebate applied to the supplier’s invoices. This service fee is not expected to exceed 2.5% of the total contract value.

4. That the annual and forthcoming year’s estimated expenditure, will be reported to the Director of Finance and Cabinet Member for Finance.

Reasons for decision

The Council considers it necessary to enter into this Contract to provide an uninterrupted water supply to the Council’s buildings and services, including corporate buildings; non-domestic properties within the housing portfolio; and schools that choose to opt-in. The Council needs to be able to supply water to ensure Council corporate and housing services can operate; and that schools opting-in have continuous water supply.

There are at least 135 water supplies in the Council’s portfolio and resourcing is required for the Energy Team to manage the billing, queries, metering and consumption of these on a day-to-day basis. The Energy Team contract a third-party bill validation and data bureau service to assist with this management. Resourcing is also required to procure the contract every few years. A rebate from all the services and schools that use the contract will therefore assist in covering some of these costs.

Alternative options considered

Procure the Council’s non-domestic water by direct tender - This option would involve the Council running a standalone compliant tender process to secure contracts with the selected water provider. This approach is unlikely to produce the best results due to the relatively small scale of the Council’s water requirement compared to that of most large purchasing organisations. This option is therefore deemed unviable.

For the Council to run a mini-competition through a different public sector buying organisation - The option of the Council conducting its own mini-competition was not recommended because the risks and costs, including the use of staff resources to write a service specification and conduct a mini competition, are not commensurate with potential benefits of retailer service efficiencies and savings. The Council is aware that there are other frameworks but as the retail margin is so small, the resourcing required to change supplier would not make the change cost effective.

Do nothing - Due to the value of the Council’s annual water spend, it is required to have a contract in place. If a contract is not put in place, the Council may default onto more expensive out of contract rates that would not provide value for money, so doing nothing is not an option.