Apologies for absence were received from Councillors H Bramer and JW Millar

There were no declarations of interest.

To approve and sign the minutes of the meeting held on 21 November 2013.

RESOLVED:  That the Minutes of the meeting held on 21 November 2013 were approved as a correct record and signed by the Chairman.

To consider concluding a variation to the waste management contract with Mercia Waste to enable the construction of an Energy from Waste Plant at Hartlebury and other ancillary matters.

Cabinet received a report on the Waste Management Services Contract.  The Chief Finance Officer provided an overview of the key issues of the Contract, which had been discussed at a meeting of the General Overview and Scrutiny Committee on the 10 December and highlighted the following points:

·         That the joint funding arrangements between Worcester and Herefordshire Councils that had been approved by both DEFRA and HM Treasury would realise a saving of £20m and would avoid substantial termination costs of the existing contract with Mercia Waste Management Ltd.

·         That when the existing contract ended in 2023, the Council would receive a 25% share of the ownership of the new site.

·         That it could take between six and twelve months to agree commercial finance, particularly given the complex nature of the scheme and switch in ownership in 2023 and that this was the most cost effective option open to the Council for dealing with waste, and would provide net present value savings of £32m

·         That the KPMG report had been carefully scrutinised at the last meeting of the General Overview & Scrutiny Committee.

A Member in attendance thanked the Executive for the open and forthright discussions that had been undertaken on this matter, and added that Members had a greater clarity of understanding of the issues than their opposite numbers in Worcestershire.  The General Overview and Scrutiny Committee had agreed that the proposals were an appropriate way forward and had recommended to Cabinet that the contract should proceed.

In reply to comments from a Member in attendance, the Head of Specialist Projects said that the plant would be handed back to the partners in a state conversant with the lifetime of the plant.  There was a complex document that laid out these terms, and it would be certified as fit for purpose by an independent consultant before it was signed off.  After 2023 the Council would own 25% of the plant, and discussions would be held with Worcestershire Council concerning the future of the plant.

A Member in attendance said that the report provided by Deloittewas potentially flawed in its support of the value for money option as it had been commissioned by Worcestershire Council and Deloitte’s had no responsibility to Herefordshire Council for its findings.  He went on to say that the KPMG report was intended to clarify and confirm value for money for Herefordshire but he felt that it failed to do this and was concerned about the lack of assurance offered, particularly given the scale of the decision.

The Chief Financial Officer replied that the Deloitte report had been commissioned by Worcestershire Council on behalf of the Partnership and that the Council had access to the model that had been used.  The KPMG report had been commissioned in order to provide an independent oversight of the overall process.  In reply to a further comment, the Solicitor to the Council added that whilst it was possible that a judicial review of the process that had been undertaken could be  ...  view the full minutes text for item 54.