Agenda item

Report of the Director of Environment and Resident Experience. To be introduced by the Cabinet Member for Resident Services & Tackling Inequality.

 

 

Decision in relation to the Waste & Street Cleansing Service Review, considering who will deliver services from 2027 and how services will be designed.

 

The Cabinet Member for Resident Services and Tackling Inequality introduced the report, which set out the outcome of a series of assessments, which had been delivered under the ‘Waste Service Review’, focusing on developing recommendations across three broad areas:

 

-       Service Delivery – who will deliver the services (i.e. in-house, outsourced contract, further extension of the current contract, Local Authority Trading Company (LATCo)),

 

-       Service Design – how will services be designed to improve recycling and waste minimisation performance (i.e. smaller waste containers/frequency of collections etc), and improve cleanliness of streets

 

-       Fleet – how will we transition to a Zero Emission (ZE) fleet.

 

The existing contract with Veolia had been in place for almost 14 years and was due to expire in April 2027. Following the Waste Service Review and subsequent consultation exercise, it was now proposed that the Council undertake a procurement process to approve a service provider to deliver recycling and waste collection, street cleansing and ancillary services from April 2027.

 

In response to questions from Cllr Hakata and Cllr Barnes, the following information was noted:

 

-       In relation to having a full commitment to Electrical Vehicles in the first instance, it was important to note that there was no decision, at this meeting, on going to procurement on the operational mode of vehicles and the aim was to continue to look for the least polluting options that were available to the Council. The report set out the cost modelling that had been carried out for the different options. This noted that an electrified fleet was substantially more expensive to the organisation, both in terms of the vehicles and also the infrastructure set up costs, but the Council remained optimistic that over time as battery technology in particular would to evolve and improve bringing prices down.

 

-       The Director for Environment and Resident Experience added that the HVO option provided significant improvement in terms of the carbon position in comparison to the existing fleet. In conclusion, the report contained the information that was currently available on potential zero emission fleets and the commitment was to continue considering the best options.

 

-       In response to the question of a reduced household waste bin size being connected with increase in fly tipping, there was no evidence or correlation that showed that boroughs who have the smaller household waste bin size have a higher proportion of fly tipping. This was an issue in London and major cities, regardless of the bin size.

 

-       Evidence showed that the garden recycling rate was not significantly impacted by moving from weekly to fortnightly collections. Haringey were one of the only a few London boroughs that still had weekly garden waste collection and were rarely collecting all bins. However, the aim was still to keep this service and keep it attractive to people at the right price but ensure that there were fewer truck journeys affecting the environment. There was no evidence to suggest that two weekly garden waste collection reduced take up. It was noted that garden waste tonnages were at the same levels as they were when there was no charge, and the subscription rate was the highest it had ever been.

 

-       Regarding the roll out of the new smaller household waste bins, the Council were proposing to keep a weekly collection of food waste and dry recycling waste to incentivize behaviour change. The decision put forward today allowed the Council to roll out the new bin sizes later on in the planned third cycle roll out in 2026. This timescale will coincide with existing bins reaching their end of life cycle and will provide time to plan the roll out of new bins and collection of new bins. This two-year timescale also allowed development of the policy issues set out in the paper.

 

 

Further to considering the exempt information at agenda item 22,

 

 

RESOLVED

 

 

1. To note the outcome of the Waste Service Review at Appendix 1 and Exempt Appendix A, the outcome of the Best Value Consultation at Appendices 2A and 2Band has due regard to the findings of the Equalities Impact Assessment at Appendix 3 and the outcome as summarised in the Equalities comments at paragraphs 9.20 to 9.27 of this report;

 

2. To agree to procure a new outsourced contract, and undertake a procurement process to find a capable service provider to deliver recycling and waste collection, street cleansing and ancillary services from April 2027;

 

3. To approve the Procurement Strategy as set out at Appendix 4, and agree that the procurement process for the new recycling and waste collection, street cleansing and ancillary services would be undertaken in accordance with it; and (as envisaged in paragraph 6.90 of this Report) delegates authority to the Director of Environment and Resident Experience, following consultation with the Lead Member for Resident Services and Tackling Inequality, to make minor amendments to the Procurement Strategy as may be required;

 

4. To agree the following changes to the recycling and waste collection and street cleansing services as further described in paragraphs 6.23 – 6.62 of this report to form part of the new contract and take effect from 2027:

 

(1) A weekly food waste collection service to cover all properties across the area,

(2) Reduce the size of non-recyclable waste bins to 180 litres from 240 litres for all kerbside properties (subject to mitigation policies as set out in the Equalities Impact Assessment at Appendix 3 and summarised in section 9.20 - 9.27),

(3) Reduce the frequency of garden waste collections from weekly to fortnightly, and

(4) Implement intelligence-led street cleansing that moves to needs-based cleansing on a street by street basis.

 

5.         To agree that the procurement of future services will include a requirement to reduce carbon emissions of the fleet, as set out in 6.63 - 6.72 specifically for:

(1) all vehicles below 7.5 tonnes GVW to be Electric Vehicles (EVs) where available; and

(2) all non-EVs to use Hydrotreated Vegetable Oil (HVO) as a transition fuel with the view that the Council will continue to assess the opportunities to transition from HVO to EVs for any future vehicle purchases and agree that such fleet is to be purchased by the Council at the indicative cost as set out in section 3 of Exempt Appendix B.3.1.6subject to 3.1.3, - 3.1.5,

 

6.         To agree to delegate authority to the Director of Environment and Resident Experience, following consultation with the Lead Member for Resident Services and Tackling Inequality to approve the contract specification and key procurement documents; and 3.1.7notes that officers are preparing a Recycling, Waste and Street Cleansing Service Offer to be brought back to Cabinet or Lead Member for approval following the conclusion of the procurement process as further described in paragraph 6.83 - 6.85 of this report.

 

Reasons for decision

 

4.1 As a Waste Collection Authority (WCA), the Council has a statutory duty to collect waste and recycling from all households within the Borough, and to keep open spaces clean, and clear of litter. This duty is currently fulfilled on the Council’s behalf by Veolia through an Environmental Services contract, which commenced in 2011 and is due to expire in April 2027, following a 2-year extension.

 

4.2 To inform next steps the Council has undertaken a thorough review of the services. The service review has followed the Council’s enabling framework and has been developed to ensure that the Council can:4.2.1 continue to deliver high quality waste collection services from 2027,4.2.2 meet MTFS targets and support the Council’s financial position,

 

4.2.3 move towards the Council’s and Mayor’s London Environment Strategy (LES) target to recycle 50% of waste by 2030,

 

4.2.4 meet the requirements and challenges of changing legislation including

Simpler Recycling, Extended Producer Responsibility and Emissions Trading

Scheme (ETS), and 4.2.5 meet the Council’s requirements under the Climate Change Action Plan to review the fleet and move towards a Zero Emission fleet by 2027. From 2027, however the service is delivered a new fleet will be required.

 

The Council must ensure that it has services in place from April 2027, and as such, a decision must be made now, to determine how these services will be delivered from 2027, ensuring that if required the services could be procured and mobilised or in[1]sourced with sufficient time.

 

To address the future needs of the service, and ensure the Council has flexibility to manage the services going forward, it is recommended to engage the market in a competitive process. This will enable the Council to enter a new contractual arrangement that better reflects the needs of the borough and the waste-related legislative developments that have recently come into force and/or are due in the future to come into force under the Environment Act 2021.

 

The Council must also decide how the services will operate from 2027, to meet new legislation, such as the expansion of food waste collection, as well as the Council’s commitment to improve recycling rates and provide an improved service across the borough.

 

The introduction of borough-wide food waste collections together with a reduction in waste bin sizes will enable the Council to meet legislative requirements and increase recycling rates to meet efficient and effective metrics under Extended Producer Responsibility (EPR). The proposed changes to the street cleansing services will remove the disparity in the quality of streets across the borough.

 

The final element of the decision relates to the Council’s commitment within the Carbon Management Action Plan, which requires the Council to review the impact of its outsourced fleet with an aim to move to a Zero Emission (ZE) fleet by 2027. From 2027, no matter which option is chosen to deliver the services, a new fleet will need to be purchased. Veolia currently purchase the fleet to deliver the services, however there are alternative options from 2027, such as the Council purchasing all vehicles required to deliver the services, which may be on behalf of a future outsourced contractor.

 

The Council has a commitment to be net zero carbon and seek to reduce its climate change impact. The proposal to introduce some ZE vehicles whilst using a less polluting fuel for those vehicles that cannot be electrified will move the Council in the right direction towards this commitment.

 

The review considered the approach to purchasing the vehicles, whether Authority Purchase, Contractor Purchase or Hire-Purchase. Due to the better interest rates that the Council can secure and following similar trends across the market – as set out in the Procurement Strategy, it is recommended that the Council, subject to an evaluation of the cost, purchase any future vehicles.

 

Alternative options considered

 

Service Delivery

 

The Council could do nothing, which would result in the contract with Veolia expiring without any plan for delivering services from 2027. This is not an option as the Council has a statutory duty to provide waste, recycling and street cleansing services, and so must have a service in place from April 2027.

 

The Council reviewed a total of 10 options, and following an initial assessment these were consolidated into four options that were consulted on with residents and businesses through a Best Value consultation (Appendix 2A).

 

Option 1: to deliver the services in-house. This would provide the Council with more control over the day-to-day operations of the services. However, as the most expensive option, this control comes at a significant additional cost versus the current service costs. This option also increased the level of financial risk to the Council. The Council currently does not have the expertise to deliver such services. This option is not therefore recommended.

 

Option 2: to deliver services through a new outsourced contract (this is the

recommended option).

 

Option 3: to extend the current contract with Veolia. Whilst this was the preferred option of consultees who responded to the Best Value consultation, this option scored less than the recommended Option 2 (to deliver services through a new outsourced contract). Additionally, the current contract is 14 years old, and it is believed that significant changes are needed to modernise and further future-proof the contract to be flexible up to expiry. A further consideration is that this option could only offer a service delivery solution for a further 5 years, to 2032. This option is not therefore recommended.

 

Option 4: to set up a Local Authority Trading Company (LATCo). This option provides the Council the ability to make changes to services quicker than out-sourced services, however, would not give the Council day to day control over how the services are delivered. This option also comes at an additional cost compared with the current services. Whilst some of the risk would sit with the LATCo, the Council would be ultimately responsible for the performance of the company. This option presented the greatest risk overall to the Council in terms of financial, operational, implementation and capability risk. This option is not therefore recommended.

 

A number of Hybrid options were discounted at an earlier stage due to duplication of operational costs and risks, however, there remains an opportunity to assess the viability of in-sourcing smaller elements of the services individually at a later date, and throughout the procurement process.

 

Service Design

 

The Council could do nothing, which would result in the services continuing to be delivered as they are now.

 

This is not recommended, as it would not support the Council’s Destination 50%, and the Mayor’s London Environment Strategy (LES), target to recycle 50% of waste by 2030 or reduce waste arisings. Additionally, without introducing food waste, we would not meet legislative requirements, and failing to increase recycling rates could lead to the Council not meeting efficient and effective metrics under Extended Producer Responsibility (EPR). Without making changes to the street cleansing services, there will continue to be a disparity in the quality of streets across the borough.

 

Recycling

 

Operating collections of dry recycling on a fortnightly frequency was excluded due to the impact that it would have on the amount of recycling that residents can put into their bin on a weekly basis. Reducing the frequency is likely to reduce the amount of recycling which can be collected and work negatively against the aims of the service to increase recycling rates. During engagement with residents, it was clear that they preferred a weekly recycling service, to ensure they had sufficient space to recycle as much as they could. A change to fortnightly dry recycling collections is not therefore recommended.

 

Introduction of ‘two-stream’ dry recycling asking residents to separate their recycling into two containers (one for paper and card, the other for tins/cans, plastics and glass). This option would require all properties to have an additional bin, we know from engagement and feedback from residents that this would be difficult, over 45% of kerbside properties have been assessed as not having space for an additional container. This is not therefore recommended.

 

Garden waste

 

The Council could keep the garden waste service weekly, however, to expand the food waste service and continually increase garden waste collection provision, these services must be operationally split. Additional vehicles and staff costs above the current baseline cost would be required to keep the garden service weekly and evidence shows that the garden recycling rate is not significantly impacted by moving from weekly to fortnightly collections. Across the north London authorities 5 out of 7 collect garden waste fortnightly, more widely across London most other authorities also collect fortnightly. Retaining weekly garden waste collections is not therefore recommended

 

Street Cleansing

 

The Council could retain the frequency-based cleansing operation of once weekly sweep on residential roads, however internal and externally verified data confirms this methodology is not sufficient to maintain cleanliness levels in between sweeps and engagement with residents evidences a desire for change to a needs-based approach. Continuation of the current cleansing model also reduces the affordability of services currently out of scope, for example SUD cleansing and cycle path cleansing. Fleet

 

5.14 The Council could do nothing, which would result in having no clear requirement to move towards a ZE fleet from 2027 and bidders would be open to continue utilising

diesel vehicles. This would not meet the Council’s aims to be a net zero carbon Council, or the Mayor’s LES to transition waste fleets to zero or low emission.

 

5.15 The review considered 3 options for the fleet, which were narrowed down from a long[1]list of 5. Other options were ruled out due to an assessment of their current operational feasibility which identified they were not suitable for the waste and street cleansing services.

 

5.16 The Council could fully electrify the fleet of over 100 vehicles; however, this would require significant infrastructure development works, and significant upfront capital costs to purchase EVs. In the Council’s current financial position, this is unaffordable and not therefore recommended.

 

5.17 The Council could continue to use diesel across its fleet, however this would not move the Council towards its target of being a Net Zero Council by 2030 and is not therefore recommended.

 

5.18 The Council could choose to not purchase the new vehicles; however this would likely cost the Council more, due to the lower interest rates the Council is able to secure compared to the rates available to contractors.