The proposal, which was approved by Havant borough council’s scrutiny committee last week (June 24), will see the local authority enter into a formal dialogue with Norse to help deliver some of its public services.
Services transferred under the venture would include household refuse, recycling and garden waste collections, street cleansing, cemeteries and allotments.
At present, all waste services are conducted in-house by Havant council, with recycling and residual waste collected fortnightly on alternate weeks. Residents using the opt-in green waste collection service must pay a fee.
Councillors hope that by entering the venture with Norse, Havant can achieve £1.4 million in corporate savings by 2018/19 via an expansion of its ‘commercial opportunities’.
Profit
If the venture is launched, the council would aim for a ‘50/50’ profit share with Norse, a wholly-owned joint company with Norfolk county council that currently operates in partnership with another 20 local authorities across England.
The report notes that a further incentive is greater flexibility on procurement, which would not be possible if outsourcing the collections to the private sector. It adds that if the company meets Teckal provisions, it can ‘passport’ work to the venture without following a formal procurement process.
A public consultation launched on the council website in May provisionally found that out of 207 respondents, 57.1% of residents did not support the principle of outsourcing services.
But the council has also painted a number of risk scenarios to entering the venture, which include a loss of control and governance over service standards and damage to its reputation. Middlesbrough council cited similar concerns when earlier this month it scrapped its own plans to form a joint venture with Norse (see letsrecycle.com story).
Insolvency
The report adds that if Norse were to hypothetically terminate the contract – or the venture became insolvent – Havant council would stand to lose in the region of £3 million.
However, the report concludes: “Norse Commercial Services Ltd have been identified as the most suitable JVC organisation with the appropriate standing and experience. Officers are confident that they will be able to undertake our services, maintain or improve existing standards, deliver efficiencies and expand the business in order to deliver profit share.”
Havant council is expected to lay out a business plan for the venture in the coming months, with a final decision to proceed and start date scheduled to be confirmed by the end of 2015.
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