COUNTY BOROUGH OF BLAENAU GWENT

REPORT TO: /
THE CHAIR AND MEMBERS OF Environment, economy and INFRASTRUCTURE SCRUTINY
REPORT SUBJECT: /
SCRUTINY TASK AND FINISH GROUP UPDATE ON THE implementation of the Collaborative change programme
REPORT AUTHOR: /
BETH JONES - TEAM LEADER ENVIRONMENTAL SERVICES
LEAD OFFICER/ DEPARTMENT /
alan reed - HEAD OF PUBLIC SERVICES

Summary Report

1.0 /

PURPOSE OF REPORT

To provide an update on the Waste Services Collaborative Change Programme (CCP) Task & Finish Group and also consider the options set out in the CCP Business case and agree the future Waste Services kerbside collection method.
2.0 /

LINK TO CORPORATE STRATEGIES

Statutory Legislation Requirement
3.0
3.1
3.2
3.3
3.4
3.5
3.6 / SUMMARY
In order for Blaenau Gwent County Borough Council (BGCBC) to comply with future legislation and provide a long term sustainable kerbside collection service the Authority must introduce changes to waste services. Primarily, a recycling “kerbside sort” collection service (legislation requirement) and also a reduced residual (black bag) service (sustainability requirement).
The CCP Task & Finish Group was asked to consider the changes in two parts. To agree to the introduction of a kerbside collection service by Spring/Summer 2015 and also to consider three options for the residual (black bag) service. There was agreement on the kerbside sort recycling collection and the preferred option was a three weekly residual collection utilising the existing 240 litre bins.
On the basis of the above and a commencement in September 2014 it is estimated that a partial service change could commence Spring 2015 and achieve a full service change by March 2016. The full service change will cost between £3.8m and £4.3m but by April 2016 could be generating a potential income of between £150,000 and £250,000 per year from the sale of recyclable materials and efficiencies in the service.
The above saving is sensitive to both participation and changes to the open market prices of recyclable materials but based on current participation and market prices £250,000 is achievable.
The cost of the service change will be funded by a capital grant from Welsh Government (£2m, subject to Executive agreement of service change) and prudential borrowing against an annual saving in the revenue budget (circa. £370k/yr for 6-7 years, subject to more detailed information on the financial model).
If the service change, as above, is agreed it will follow the Welsh Government Collection Blueprint and will comply with future legislation and should, subject to further discussion with WG, meet statutory recovery targets.
4.0
4.1 /

RECOMMENDATIONS

The business case is approved in principle (subject to further detailed information on the financial model/prudential borrowing) and the preferred options set out in 3.0 is agreed and implemented during 2014/15.


Detailed Report

1. /

PURPOSE

1.1 / To provide an update on the Waste Services Collaborative Change Programme (CCP) Task & Finish Group and also consider the options set out in the CCP Business case and agree the future Waste Services kerbside collection method.
2. /

BACKGROUND

2. 1
2.2 / The Waste Framework Directive 2008 is the primary legislation which sets the requirements in The Waste (England and Wales) Regulations 2011. The Waste Framework Directive requires the UK to take measures to promote high quality recycling. This includes a specific requirement, by 1st January 2015, to set up separate collections of paper, plastic, metal and glass as a minimum. Collectors of these wastes must collect these materials separately, unless it is not necessary to provide high quality recyclates; or unless it is not technically, environmentally or economically practicable (‘TEEP’).The Wales Waste Strategy (Towards Zero Waste) then sets out the Statutory Recovery Targets that all local authorities in Wales must comply with up to 2024/25. These are:
52% by 2012/13 – BGCBC (51.2% Wales overall met target)
58% by 2015/16 – BGCBC (54.8% 2013/14 – unverified)
64% by 2019/20
70% by 2024/25
Local Authorities are fined £200/t under the set targets. In BGCBC this is approximately £100,000 per 1%.
2.3 / In 2011, Welsh Government established the Collaborative Change Programme (CCP) with the aim of supporting Waste Services Teams across Wales to meet the challenge of the Statutory Recovery Targets.
2.4 / The CCP will therefore support individual local authority long-term business plans and include both revenue support in developing the business/technical/financial models and capital funding to support the implementation of the preferred business case option.
2.5
2.6 / Over the last 18 months Blaenau Gwent County Borough Council has worked with consultants appointed by the Welsh Government CCP Team (WRAP) to review current services, consider various delivery models and carry out modelling to review the potential options. The key conclusions were that BGCBC needs to change the delivery model in order to make the waste service more sustainable and also to meet the statutory recovery rates (as above).
In April 2014, Welsh Government announced to all local authorities in Wales that they would now accept applications for capital funds (£4m total fund) to support the Collaborative Change Programme. All local authorities were also informed by WG that priority would be given to the waste service teams that have been through the business planning process with WRAP. BGCBC was one of these authorities.
2.7 / A Scrutiny Task & Finish Group was formed last year to consider the Waste Service Long Term Business Plan, the Task & Finish Group have also considered the options proposed in the business case.
3.0 /

PRESENT POSITION

3.1 / BGCBC submitted an application and draft business case to WG (Appendix 1) at the end of May 2014. The business case identified the capital funding requirement to implement a service change of between £4.3m and £5.0m depending on the preferred residual option. It also identified that with service changes efficiencies and utilising revenue savings to prudentially borrow this still left a shortfall of £2m. The business case was submitted on the basis that it did not have Scrutiny/Executive approval as the extent of service change has not yet been agreed.
3.2 / The reduction in the revenue budget to fund the prudential borrowing is proposed on the basis that the new kerbside recycling service would facilitate:
a.  The sustainable kerbside collection and separation of recyclable materials which could be sold to the market;
b.  Eliminate the requirement to supply recycling bags; and
c.  Increase the overall quantity of recyclable materials collected by reducing the residual waste (black bags) collected.
3.3 / WG have formally notified BGCBC that £2 million has been allocated to assist with the service change, subject to BGCBC providing confirmation (by 30th September 2014) of which delivery model will be implemented. BGCBC will also be required to demonstrate or provide assurances that the capital grant will be spent by 31st March 2014.
4.0 /
OPTIONS FOR CONSIDERATION
4.1 / Members of the Task & Finish Group were presented with the three options developed in the business case. Agreement was reached on the requirement to change to kerbside sort recycling service and Option 2 (below) is currently the preferred residual waste option (subject to the outcome of the site visit to Conwy on the 21st July to see the delivery model working).

5.0 /

FINANCIAL IMPLICATIONS

5.1
5.2 / Estimated Capital Costs (Option 1 has an additional funding requirement of £700k to purchase new smaller 140 litre wheeled bins)
Capital Item / Number Required / Unit Cost (Approx) / Minimum Capital Required / Maximum Capital Required
Kerbside Sort Vehicles / 12 / £87k - £107k / £1,044k / £1,284k
Large RCV’s / 3 / £140k -£160k / £420k / £480k
Small RCV’s / 2 / £100k - £110k / £200k / £220k
Recycling Containers / 35,000 / £30 - £35 / £1,050k / £1,225k
Waste Transfer Station Development / £1,000k - 1,100k / £1,000k / £1,100k
TOTAL / £3,714k / £4,309k
Estimated Revenue Costs for Option 2 (2015/16 will be implementation)
Revenue Budget / 2014/15 (Current) / 2015/16 (Predicted) / 2016/17 (Predicted)
Employees / £1,335,997 / £1,335,997 / £1,335,997
Transport / £590,844 / £496,531 / £496,531
Collection / £605,512 / £374,929 / £374,929
Prudential Borrowing (Bags) / £0 / £230,583 (1) / £230,583 (1)
Disposal / £1,978,406 / £1,842,727 / £1,842,727
Prudential Borrowing (MRF) / £0 / £135,679 (2) / £135,679 (2)
Total / £4,510,759 / £4,416,446 / £4,416,446
Estimated Income / £0 / £Unknown / Est. £150,000
to £250,000 (3,4)
Notes:
1.  Prudential borrowing against reduction on collection costs (bags).
2.  Prudential borrowing against current dry recyclable disposal costs (MRF).
3.  Estimate based on current participation and open market rates for Recyclates.
4.  Eunomia/WRAP has suggested an income of up to £700,000 is possible in the business case. However, it is acknowledged that this is based on higher open market recyclate prices, increased participation rates and higher recovery rates being achieved.
6.0 / RISK IMPLICATIONS
6.1 / Please see risk register in attached Business Case.
7.0 /

PERFORMANCE IMPLICATIONS

7.1 / None have been identified.
8.0 /

STAFFING IMPLICATIONS

8.1
8.2 / A Project Team will be required to implement the new service; this will consist of officers from the Authority with support from WRAP and Welsh Government. It is proposed that implementation is project managed by the Strategic Projects and Environmental Services Team.
There may be a need for additional staff during the implementation process.
9.0 /

PROPOSALS

9.1 / The business case is approved in principle (subject to further detailed information on the financial model/prudential borrowing) and the preferred options set out in 4.0 above is agreed and implemented during 2014/15.
10.0 /

SUPPORTING EVIDENCE

10.1 / Business Case submitted to Welsh Government
11.0 / CONSULTATION UNDERTAKEN
11.1
11.2 / There have been annual members briefing sessions since 2011. Following this a Task & Finish group was formed in 2013.
Presentations to staff have taken place since 2011.
12.0 / CONCLUSIONS
12.1 / In order to comply with future legislation and provide a long term sustainable kerbside collection service the authority must make the appropriate changes.