May Gurney to lose Norfolk recycling centre work

Norfolk county council has decided to hand the operation of 19 of its recycling sites to its wholly-owned subsidiary Norfolk Environmental Waste Services after its current contract with May Gurney expires in March 31 2014.

The councils decision to enter into a Service Level Agreement (SLA) with NEWS means that the contract will not be put out to competitive tender and that May Gurney will not have the opportunity to bid for the work.

The move is likely to be a disappointment to May Gurney, which is a Norfolk-based company and has been working with Norfolk county council since 2007. Its contract with the local authority is currently worth more than 5 million a year, excluding the costs of disposal.

According to the council, the SLA with NEWS which is part of the Norse Group and a fully-owned subsidiary of Norfolk county council will provide greater flexibility than a contract with a third party. Norfolk said the decision was based on changes in the waste market and a reduction in its budget since the current contract with May Gurney was signed.

Controlled entity

Subject to best value and state aid law, the council is not required to run a competitive procurement before contracting with a controlled entity such as NEWS.

However, in a report presented to the Environment, Transport and Development scrutiny panel last year, the council admitted that by not undertaking a competitive tendering process it may miss opportunities for better value from the market.

According to a council spokeswoman, the SLA does not include a specific time frame and will last for as long as it provides best value and will be regularly bench marked against the market.

The agreement means that the 19 recycling sites will neither be operated in-house by the council nor by an unrelated third party. However, the SLA will enable the council to maintain a certain degree of control and to potentially cancel the agreement at any later date.

Such an agreement also enables the council to potentially share any profits on material sales with NEWS, which also currently operates the Edgefield landfill site in the county through a SLA with the council.

Existing staff currently working under May Gurney at the 19 recycling sites will be offered the opportunity to transfer to NEWS.

Reduced budget

Commenting on the decision, Mark Allen, assistant director for environment and waste at Norfolk county council, said: Norfolk county council’s cabinet agreed that the council enter into a Service Level Agreement contract with NEWS for its recycling centre service after 31 March 2014 as the current contract for 19 of the county councils main recycling centres expires on that date.

The waste market has changed significantly since the existing contract was awarded, with higher material prices for recyclables and higher disposal costs for rejects. The county council now faces a reduced budget and needs to be in a position to take advantage of new opportunities as they emerge.

He added: We are proud of the service currently being offered by the recycling centres in Norfolk but using NEWS would enable a more flexible approach to service provision which may need to be adopted in the future. We are always looking ahead and thinking about how we can capitalise on opportunities to extend our services to the public such as the potential for green waste at garden centres. The new contract, in the medium to long term, would also lead to a reduction in costs.

May Gurney declined to comment specifically on the councils decision to enter into a new SLA with NEWS, but a spokeswoman said: May Gurney confirmed that the Household Waste Recycling Centres (HWRC) contract with Norfolk county council comes to an end in March 2014.

The firm opened a 1 million recycling centre at Thretford in December 2012 on behalf of the council, having previously opened new sites Caister, Dareham and Kings Lynn under the contract. In 2012, more than 70% of residents waste recycled in Norfolk was brought to May Gurney-run sites.