Westminster councils long-term waste contracts with Veolia are preventing it from merging its environmental services with two other London boroughs as part of proposals to create the capitals first supercouncil.
The local authority unveiled plans in October 2010 to explore the merger of a number of services with Hammersmith & Fulham and Kensington & Chelsea councils (see letsrecycle.com story)
The councils claimed that the move could save the councils up to 100 million a year in total and, at the time, waste was mooted as a service that could be combined.
However, a progress report on the so-called tri-borough plans that has been discussed by each of the councils cabinets this month revealed that contractual issues had forced Westminster to drop out of any merging of environmental services, such as waste, in the immediate future.
In the report, the councils state more detailed work has suggested that current contractual arrangements and preparations for the Olympics do not encourage a tri-borough service at present.
Instead, Kensington & Chelsea and Hammersmith & Fulham are set to press ahead with plans to combine their management teams for environmental services with the option for tri-borough services in the future.
The report states this could save 1.5 million-a-year, achieving a 48% reduction in the number of employees in the top three tiers of senior management, from 29.5 to 15.5.
A spokeswoman for Westminster council confirmed that the contractual arrangements cited in the report specifically referred to in the report are its long-term collection and disposal contracts with Veolia. She added: Theres no joint-working on the horizon for either.
The council has a waste and recycling collections contract with Veolia that runs until 2017 and could also be extended for another seven years (see letsrecycle.com story), while its waste disposal is handled by Veolias SELCHP energy-from-waste facility under a contract running until 2016.
Long-term
The long-term nature of all three councils waste contracts has already impacted on the potential for all three to join forces to procure new waste and recycling services.
An earlier progress report, considered by all three local authorities in February 2011, alludes to the prohibitive cost of exiting existing contracts for waste disposal.
And, it adds: Waste management is the largest area of spend and there is an opportunity to consider a future joint procurement but not until some years hence.
Instead, it notes that there may be the option to explore a joint contract for 2021. Alongside Westminsters contracts with Veolia, Kensington & Chelsea has a 16 year collections contract with SITA UK which began in 2005 and Hammersmith & Fulham began a seven year collection contract with Serco in 2008, which could be extended for a further three years.
And, these two councils are part of the Western Riverside Waste Authority, which has a 30-year waste treatment deal with Cory Environmental which began in 2002.
Next steps
At their latest meetings, which took place last week (May 5) in Kensington & Chelsea (K&C) and yesterday (May 9) in both Hammersmith & Fulham (H&F) and Westminster, all three cabinets were asked to note the plans to merge environment services management teams for K&C and H&F.
It also asked them to note plans to begin the process of reconfiguring services; with an invitation to WCC to later combine as contractual arrangements allow.
All three councils cabinets are now set to decide on the proposals as they stand, including those for environment services, at their meetings next month.
According to the latest progress report, work is also scheduled to scope and agree waste contract amalgamation and timelines.
A spokesman for Veolia noted that all three councils were involved in long-term waste contracts but added it may not be impossible to work something out.
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