New Kitchen Contract

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					                                                                          Agenda Item No: B1

                         NORTHAMPTONSHIRE COUNTY COUNCIL

                                            CABINET

                                          22 April 2008

                       Report by Director for Community Leadership

       Cabinet Member with responsibility for Environment: Councillor Ben Smith


Subject: Proposed New Kitchen Food Waste Collection, Treatment and Processing Service

Advice: Cabinet is asked to approve the undertaking of a procurement process to determine
        the affordability implications of a kitchen food waste collection, treatment and
        processing service.


1. Intended Outcome

      1.1 The intention is to undertake a procurement process to determine the cost of weekly
          collection, treatment and processing of kitchen food waste either on a county-wide
          basis or throughout some parts of the county of Northamptonshire. This will allow a
          full business case to be completed, the approval of which to be obtained at a later
          Cabinet meeting should it be deemed viable to award contract.

      1.2 The new service will make a significant contribution towards the county’s combined
          waste recycling and composting performance. Should all Northamptonshire Waste
          Partnership (NWP) authorities participate in the service this will increase this
          performance by around 6% and in doing so divert approximately 30,000 tonnes of
          organic waste from landfill each year. The provision of this service will allow the
          councils of Northamptonshire to achieve the recycling rate required by the National
          Waste Strategy and contribute towards meeting the criteria for the awarding of PFI
          Credits for the Joint Residual Waste Project.

      1.3   The service will be introduced on the basis of a partnership approach with all or
            some of the NWP authorities working together. The project will therefore be an
            excellent example of partnership working and will facilitate the two tiers of local
            authorities in Northamptonshire working together to provide affordable, accessible
            public services.

      1.4 The new service, along with the innovative approach to joint working, is likely to be a
          showcase service, in line with latest ‘Best Practice’ advice from Government.
      1.5   The benefits the service will provide include an additional service to the public and
            an increase in recycling and composting rates.

 2.     Relevant Council Strategic Goal and Priority

 2.1    The Medium Term Plan vision is "one organisation focused on customers and
        community leadership", to be achieved by the following strategic goals and priorities:
      Medium Term Plan and Strategic Goals            Council Priority

      Communities          A cleaner and greener      The built, natural and public
                           county                     environment is better developed and
                                                      maintained

      One organisation     Maximising influence    The county’s reputation and the
                           and resources           council’s performance are
                                                   acknowledged as high quality by
      One organisation     Sustaining an excellent customers, communities, visitors,
                           organisation            businesses and regulators

                                                      The council lives within its means,
                                                      providing services at a cost to the
                                                      local taxpayer that increases by no
                                                      more than the rate of inflation,
                                                      provided that changes in central
                                                      government funding do not prevent
                                                      this.


3.     Background

3.1    The Northamptonshire Joint Municipal Waste Management Strategy (NJMWMS),
       policy 3, states that; ‘We will provide quality, convenient collection services so as to
       maximise the opportunity for the separate collection of dry recyclables and organic
       waste’.

3.2    Specifically, the policy includes for introducing collections of materials not currently
       targeted, in particular kitchen food waste. Accordingly, the Strategy includes an action
       for a review of approaches to collection of kitchen food waste, by the NWP partners,
       to be completed by the end of 2007.

3.3    The project is currently being developed on the basis of the NWP authorities who
       comprise all of the Northamptonshire District and Borough Councils along with
       Northamptonshire County Council working together to investigate the implementation
       of the new service.
4.     Consultation

4.1    The kitchen food waste feasibility study, along with the associated detailed work, has
       been developed by the NWP authorities’ members and officers.

4.2    Prior to the production of this report meetings have been held between the Head of
       Waste Management and the respective Senior Officers of the NWP authorities, to
       discuss and agree the potential outline cost/ benefit implications, associated with this
       project and to obtain an approval in principal to undertake a procurement process to
       further understand the cost implications of implementing the new service.

4.3    Kitchen food waste collection, treatment and processing is included as a potential
       policy within the latest draft Northamptonshire Joint Municipal Waste
       Management Strategy, which is dealt with elsewhere on this agenda.
4.4        The kitchen food waste project communications plan will include for specific
           consultation to be undertaken with individual households in the county as appropriate,
           prior to the final development and implementation of the new service.

5.         Proposal

5.1        Currently there are no arrangements for the separate kerbside collection of kitchen
           food waste. It is estimated that each household in the county produces around 160kg
           of kitchen food waste each year which means a total of 46,000 tonnes of additional
           waste being landfilled each year. To reiterate, the NWP authorities wish to undertake a
           procurement process which will allow all participating authorities to ascertain whether
           suitable facilities for the collection, treatment and processing of kitchen food waste are
           available and to understand the true cost implications of implementing the service.

5.2        The project covers the following:

      (i)       The Procurement Process for a Kitchen Waste Collection, Processing and
                Treatment Service


              The procurement exercise will commence in May 2008 and will invite tenders for
               the following service options (referred to as ‘Lots’):

                o Lot 1 - Pricing (by separate tonnage bands) for processing and treatment only
                 of kitchen food waste.

                o Lot 2 – Pricing for fully-integrated contract which includes collection,
                 treatment and processing (by separate tonnage bands)/PR/ Communication
                 activities, supply of bins and caddies. This will allow a costs comparison to
                 be undertaken on collection costs i.e. NWP Waste Collection Authorities
                 (WCA) authorities providing collection services in-house or obtaining these
                 services from an external contractor.

              The District and Borough Councils, via the NWP, will play a key role in the
               procurement process in terms of specifying requirements and during the
               evaluation of tenders.

      (ii)      The Kitchen Waste Collection and Associated Services and Contact(s)

              A pre-launch, consultation, education and publicity campaign for the new kitchen
               food waste collection service.
              The supply and delivery of kitchen caddies and kitchen waste bins to each
               household being provided with a service.
              The weekly collection of kitchen waste from ‘kerbside’ collections and delivery to
               kitchen waste treatment plant(s) located within or close to the county boundary.
              Subsequent monitoring and post launch publicity to identify, and where
               appropriate, increase participation levels in the new kitchen food waste collection
               service.

     (iii)    Joint Working Agreements for all Participating NWP Authorities

              Joint Working Agreements will need to be completed by all NWP authorities
               participating in the service. The Agreements will cover elements such as roles and
               responsibilities, risk and benefit share of the service.
6.       Timetable for Implementation

6.1      The project key stages are as follows:

        May 2008 - Procurement process for kitchen food waste collection, treatment and
         processing services commences.
        September 2008 - Joint Working Agreements, between NWP authorities to be formally
         signed off.
        September/October 2008 – Key decision point by all participating NWP authorities
         whether to award contract and continue with the mobilisation process or to stop
         process. This will involve Cabinet/Committee approvals being obtained by each NWP
         authority participating in the process.
        November/December 2008 - Mobilisation of new kitchen food waste collection,
         treatment and processing service.
        February 2008 – Public consultation and pre-launch publicity.
        April 2009 – Anticipated start date of new service.

7.       Financial Implications

7.1      The costs of a separate kitchen waste collection service would impact on both the
         WCAs as well as on the County Council. In general, WCA collection costs would
         increase and disposal costs would decrease.

         The overall affordability of such a scheme will, therefore, be based on:

          o The response of the market to the various lots as described above;
          o The commitment of the WCAs to contribute to the collection costs of any new
            service;
          o The net impact on the County Council of both of the above.

7.2      A feasibility study has proved inconclusive, and it is felt that by undertaking a
         procurement exercise the true costs of the various approaches (as identified as lots 1
         and 2 below) can be fully assessed in financial terms.

7.3 The procurement process will allow tenderers to submit proposals for two different
    options, referred to as ‘Lots’. Lot 1 will allow for pricing to be submitted for the
    treatment and processing of kitchen food waste only. Lot 2 will allow for tenderers to
    submit a fully-priced solution. This would mean that all services such as collection,
    treatment, processing, provision of bins and caddies as well as PR/Communications
    activities could be provided under one contract. It is hoped that this option will provide
    economies of scale and therefore, prove better value for money.

7.4 Should the procurement process indicate that neither of the options offer value for
    money, the County Council will discuss and agree with the District and Borough
    Councils whether or not it is viable or not to award contract for this service.

7.5 As part, however, of any final value for money assessment (as outlined in 7.4 above)
    the County Council will additionally have to take account of the implications to the
    residual waste PFI project should a separate kitchen food waste collection not go
    ahead. Therefore, the cost to the council of a residual waste contract that includes, or
    does not include, a separate kitchen food waste collection scheme will need to be
    quantified, and taken into account prior to any final decision.
7.6      Because of the uncertainty of the cost implications no financial implications in respect
         of a separate kitchen food waste collection service have as yet been included in the
         current medium term financial plans of the Council.

7.5      The cost of undertaking a procurement process will include the services of an external
         technical adviser; the costs of which should be approximately £20k and will be met by
         the County Council from existing waste management budgets.


8.       Benefits

8.1      Benefits the Service will Deliver include:

        The diversion of an approximate additional 30,000 tonnes of waste from landfill each
         year should all NWP authorities participate in the scheme.
        An immediate full year improvement in the combined recycling performance for the
         County of approximately 6% should all NWP authorities participate in the scheme
        A key NWP initiative.
        This proposal reduces the risk associated with the Joint Residual Waste Project
         should it not be delivered by 2014/2015. This is because any delay to the Residual
         Treatment facility could cause costs to increase, i.e. Landfill Tax, as more waste
         would potentially have to go to landfill.
        Provides Northamptonshire households, covered by the service, with a weekly
         collection of kitchen waste and will therefore reduce perceived problems associated
         with alternate weekly collection of residual waste.

9. Risks

9.1 If the separate collection does not proceed this could impact on the Joint Residual Waste
    Project either by

          o Increasing the cost of the residual waste scheme itself;
          o Reducing the overall recycling rate to a level that would not be high enough to
            attract PFI credits to the scheme.

10.      Recommendation

10.1 It is recommended that the Cabinet Members endorse this request to proceed with the
     procurement process (as described in Paragraph 5.2).

11. Appendices

11.1 None.

 Author:                                          Name: Steve Bell and Stephanie McCahill
                                                  Team: Waste Management
 Contact details:                                 Tel: 01604 236539 Fax: 01604 237331
                                                  Email: smccahill@northamptonshire.gov.uk
 Background Papers:
 Is this report proposing a key decision is       YES
 taken?
 If yes, is the decision in the Forward           YES
 Plan?
Is this report proposing an amendment to       NO
the budget and/or policy and framework?
Have the financial implications been           YES
cleared by the strategic finance manager       Name of SFM: Eric Symons
(SFM)?
Has the report been cleared by the             YES
relevant Director?                             Name of Director: Danny Brennan
Has the relevant Cabinet Member been           YES
consulted?                                     Name of Cabinet Member: Cllr Ben Smith
Have any legal implications been cleared       YES
by Legal Services?                             Name of solicitor: Chris Whittington
Has an Equalities Impact Assessment            NO
been carried out in relation to this report?
Are there any community safety                 Not directly, but the waste management
implications?                                  strategy will contribute to any relevant
                                               community safety priorities regarding waste.
Are there any environmental implications:      YES
                                               The new service will result in the conversion
                                               of kitchen waste into a reusable compost
                                               product, along with a reduction in
                                               biodegradable waste to landfill.
Are there any human rights implications:       YES
                                               All suitable households will be provided with
                                               access to the new service, in areas where
                                               the new service is being introduced.
Constituency Interest:                         All potentially

				
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