Cheshire West and Chester council is to move ahead with its plans to set up a Local Authority Trading Organisation (LATO) to deliver waste services in the borough, as an existing contract with Kier comes to an early end.
The council’s cabinet will meet tomorrow (11 September) to hear an update on the transition from the current contract with Kier, to a new organisation, known as ‘Cheshire West Recycling’ from April 2020, and to vote on the establishment of the new body.
Cheshire West & Chester initially signed a 14-year contract with May Gurney for the borough’s waste and recycling services in 2011, before the company was then acquired by Kier.
When it was signed in 2011 – the contract was worth a total of £126 million across its 14-year term and included an option for an additional seven-year extension.
Early this year, Kier asked to bring the contract to an end six years before its initial end date. The council has sought to move to an in-house service as a result. Both parties cited ‘significant change in the recycling market’ as being behind the early end of the contract.
Kier is due to provide a financial settlement for the exit from the contract, which the local authority says will provide a ‘strong platform’ for the establishment of the new service model. The council will also take ownership of all vehicles, baling equipment and containers used under the service.
Existing staff will be transferred from Kier to the LATO on existing employment terms in accordance with TUPE regulations. Set up costs of £1.2 million are forecast for the new delivery body.
Provision of the in-house service is forecast to cost the council £14.5 million to run in 2020/21, rising to £17.4 million from 2025/26. The council predicts that increased income and efficiency savings will offset the cost of this service.
Resources and Waste Strategy
According to Cheshire West and Chester council, moving to a LATO will provide ‘flexibility’ that could be needed to respond to any requirements brought about as a result of the government’s Resources and Waste Strategy.
The local authority has commenced a strategic review of its household waste and recycling services, to inform future service delivery, which it is expected will be finalised in 2021.