Waste contract deal cost £6.8m
STEPHEN NORRIS Dumfries and Galloway Council paid out £6.8 million to end a controversial Private Finance Initiative (PFI) waste contract, according to a new report.
The figure is revealed in a best value assurance study of the council’s performance for the Accounts Commission.
The council terminated its 25–year waste collection, disposal and recycling deal with Renewi in September, 11 years early.
The waste firm – formerly known as the Shanks Group – had wanted out because it claimed tough new recycling targets were costing it money.
To save the service and around 70 jobs the council agreed to pull the entire operation in–house.
The matter was debated behind closed doors on the grounds of commercial confidentiality.
That prompted questions about the reasons for the payout and what the council got in return.
And now that the cost of bringing the waste service into public ownership is known, further details have emerged.
A senior source told the Standard: “Because there were 11 years outstanding on the contract the council effectively had to buy that out.
“Assets such as the Eco–Deco plant and 11 recycling centres around the region would be part of the assets transferred to the council.
“Also we now effectively employ all the staff who formerly worked for Renewi.
“Shanks were the reason why recycling could not be rolled out across the region.
“Doorstep recycling was not written into the contract in 2004 and that was the stumbling block.”
The source said it was too early to assess whether taking over the waste and recycling service would cost or save the council money.
“What is complicating matters is that the council has to identify another £30 million of efficiency savings,” the source said.
“That will include how the waste service is run. At least now we can look at how the waste service is operated and how it can be done more efficiently.”
The council signed the PFI deal with Shanks in 2004.
It required all household waste to be collected in a single bin for recycling, composting and landfill centrally.
But the contract hit problems after 2012 when new Scottish Government regulations required waste to be separated for recycling at household level.