DCLG will not provide financial aid to Norfolk county council, after the authority was left with a 33.7 million bill following the termination of its 25-year energy-from-waste contract with Cory Wheelabrator.
In a letter written to the council dated May 15, Parliamentary Under Secretary for Communities and Local Government Baroness Stowell explained that it was not appropriate for the government to foot the compensation costs.
Responding to a request for financial assistance from the local authority, the Conservative Peer added that it was for the local authority to assess the risks and benefits of any local contract prior to agreeing to it.
She stated: It is not appropriate for national taxpayers to provide funding for penalty costs, should they arise, from locally-procured contracts.
The decision will come as a blow to Norfolk, which decided to cancel the 500 million deal to develop an energy-from-waste plant in Kings Lynn in April. In October last year, Defra withdrew 169 million in PFI funding for the project.
George Nobbs, leader of Norfolk County Council, said: This puts to bed once and for all the frequent and various suggestions from Henry Bellingham MP that the Government would help the County Council if it agreed to terminate The Willows’ contract.
‘Dismissive’
I’m sure people will agree with me when I say I depreciate the rather dismissive comments made by Baroness Stowell about the efforts and judgement of my predecessor and his administration in relation to this contract.
The council has until July 14 this year to pay Cory Wheelabrator the full compensation, and is currently considering the sale of the Willows site earmarked for the project (see letsrecycle.com story).
Norfolk county council has cited the delay in a final planning decision from Communities Secretary Eric Pickles on the plant as being among the reasons for the termination of the contract. The minister called in the project for a public inquiry in 2013.
Councillors were concerned that this and the continued delay on a decision from Mr Pickles was causing the projects value for money to drop with rising costs and a shortened contract payback period.
Norfolk is currently exploring alternative options for the treatment of its residual waste, including a medium term arrangement with neighbouring Suffolk county council.
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