The Sub-Committee is asked to review the Cabinet report and conduct Pre-Decision Scrutiny with a view to considering whether it is reassured about the recommendation to the Executive Mayor not to extend the current waste collection and street cleansing contract with Veolia Environment Services following expiry of the initial term on 31st March 2025.
The Sub-Committee considered a report set out on pages 57 to 108 of the agenda that provided an upcoming Cabinet Report on the Waste Collection and Street Cleansing Contract for Pre-Decision Scrutiny. The Cabinet Member for Streets and Environment introduced the item.
The Vice-Chair noted about the Mayoral Pledge to pursue the recommendation in the report and asked for reassurance that the recommendation was driven by evidence and data. The Director of Sustainable Communities explained that the recommendation not to extend the contract had been reached in collaboration with the other Partners in the SLWP and with legal advice taken on Veolia’s proposed contract extension. The provision to extend the contract by mutual agreement is contained within the contract, and the decision not to extend would only take effect in March 2025, which left extensive time to work on a re-procurement process and to conduct consultation with the Greater London Authority (GLA), which was required. Members heard that a large amount of soft market testing had taken place to look at options, and this had been fed into the information contained within the report and Appendix 2.
On the development of a future contract, the report contained a commissioning timeline for a process of consultation and engagement on its development before a future report would be submitted to Cabinet in March 2023 with a recommendation on the commissioning model and procurement strategy. The Chair and Vice-Chair emphasised the strong feeling on waste issues from residents in Croydon and asked about the opportunities for Member and resident engagement. The Director of Sustainable Communities explained that the Mayor and Cabinet had already been engaged on the recommendation not to extend the contract, and consultation with Members on any new contract would be a part of its development. Resident feedback from the SLWP triennial survey results had been received and Croydon officers would be briefed on this in November 2022; details of this could be shared once they had been compiled. There would be a dedicated resident engagement piece, which the SLWP would lead on across the partner boroughs, once the Mayor had accepted the recommendation not to extend the contract.
The Sub-Committee asked about challenges to the current contract that had led to the recommendation not to extend. The Director of Sustainable Communities explained that Veolia were not happy to extend the contract on the current basis and would like a significant variation to any extension; this variation was significant enough that it could trigger a Regulation 72 that could leave Croydon open to a legal challenge.
Members noted that any new contract would be complicated and developed over the four boroughs in the SLWP. The Sub-Committee asked about potential negative impacts to budgets in future years and suggested that there was a lack of enthusiasm for an in-house service. Members asked whether this was due to there not being enough time to develop one, or whether it was a riskier option.The Director of Sustainable Communities explained that the extension of the contract had been found to be unrealistic and no decision had yet been made about what would be developed in its place.
The Vice-Chair asked how confident officers were that the decision not to extend the contract would lead to good outcomes for Croydon residents, and heard that officers were confident that it would help to protect Croydon from possible legal challenge. The Cabinet Member for Streets and Environment stressed that a new contract could also lead to improved services and KPIs. The Chair asked about the risk of a reduced market and a number of authorities looking to retender for waste contracts at the same time. The Director of Sustainable Communities highlighted the importance of due diligence and explained that soft testing of the market had been ongoing for some time, alongside discussions with other boroughs, to try to mitigate these risks.
The Vice-Chair asked about the timelines for developing alternative approaches and engagement with Members and Officers.The Director of Sustainable Communities responded that a report would need to be sent to the GLA in the early part of 2022, with market tendering taking place between April to May 2022; engagement strategies would need to be decided in advance of this. Officers and the Cabinet Member were keen to involve the Sub-Committee in providing Pre-Decision Scrutiny on any reports on the future contract.
Members asked about whether the Council’s current financial position might put off potential providers and heard that it was unlikely that this would be the case. The Director of Sustainable Communities explained that the contract was of significant value and that they were keen to explore any options that might provide employment opportunities to Croydon residents and maximise social value.
The Chair asked whether the Council would look at best practise from other authorities, and heard that this did take place through the SLWP who regularly had these discussions with other councils. The adoption of the current contract had been a significant change when implemented, but had provided benefits over the former contract.
The Chair invited Councillor Ben-Hassel to ask a question on whether the Council had talked to other authorities about the benefits and challenges of developing an in house provision. The Sub-Committee heard that this was the case and that these discussions were ongoing.
The following motion was moved by Councillor Ria Patel and seconded by Councillor Luke Shortland to exclude the press and public:
“That, under Section 100A(4) of the Local Government Act, 1972, the press and public be excluded from the meeting for the following items of business on the grounds that it involves the likely disclosure of exempt information falling within paragraph 3 indicated in Part 1 of Schedule 12A of the Local Government Act 1972, as amended.”
The motion was put and it was agreed by the Committee to exclude the press and public for part of this item.
Please note that a full confidential minute has also been produced that includes confidential discussion of the Committee.
The Sub-Committee concluded that there needed to be a discussion on how this contract was scrutinised going forward, with the possibility that Scrutiny Chairs of other partner boroughs of the SLWP collaborated in scrutinising the current contract and any future contracts.
The Sub-Committee concluded that there might be similar contracts coming down the pipeline and that these should be received for Pre-Decision Scrutiny.
The Sub-Committee were of the view that a timeline and details on Member and resident engagement for the development of the Service Delivery Options be provided to Members, should the recommendation be approved at Cabinet, alongside the SLWP triennial survey results.
The Sub-Committee recommended that a Cross-Party working group be established to input into the development of any new Service Delivery Options for Waste Collection and Street Cleansing.