Apologies for absence were received from Councillors DW Greenow, JW Hope MBE, RC Hunt, and DB Wilcox.

To receive details of any Members nominated to attend the meeting in place of Members of the Committee.

In accordance with the Council’s Constitution, Councillors PGH Cutter, JG Jarvis, NP Nenadich and P Sinclair Knipe attended the meeting as substitutes for Councillors JW Hope MBE, DB Wilcox, RC Hunt, and DW Greenow, respectively.

To receive any declarations of interest by Members in respect of items on the agenda.

There were no declarations of interest made.

To note questions received from the public in relation to item 5, Waste Management Contract.

(Questions are welcomed for consideration at a Scrutiny Committee meeting so long as the question is directly related to an item listed on the agenda.  If you have a question you would like to ask then please submit it no later than two working days before the meeting to the Democratic Services Officer.  This will help to ensure that an answer can be provided at the meeting). 

It was reported that no questions had been received two working days in advance of the meeting, as per the Committee’s normal practice.  However, the Herefordshire and Worcestershire Action Group had submitted a number of documents the previous afternoon and these had been forwarded to all Councillors and relevant officers.  The Chairman asked Members to bear this correspondence in mind during the debate.

This report is due to made available to Cabinet on Thursday 5 December 2013, to be published at the following:

http://go.m-gov.eu/064M5011

The Chairman introduced the item by commenting that the role of Committee Members should be to consider the best interests of the people of Herefordshire and to scrutinise the Cabinet report, alongside the recently released reports: ‘Deloitte: Worcestershire County Council - Waste PFI; Quantitative Value For Money Options Analysis’ and ‘KPMG: Herefordshire Council - Waste Contract Variation; Commentary on the processes undertaken for the proposed Contract Variation with Mercia Waste Management Limited’.

The Chief Financial Officer said that:

•        The officer team welcomed the opportunity to go through the points in detail and to respond to questions, adding that this was an important issue and the right decision had to be made.

•        There would be a joint briefing with Worcestershire, where the Chairman would have an opportunity to express the views of the Committee, followed by Cabinet meetings at each authority on Thursday, 12 December 2013.

•        He had been involved with the project for the past three months since joining Herefordshire Council but this report was the culmination of work over a number of years by a joint team of professionals from both authorities.

•        A number of issues had changed at the margins recently, particularly in terms of negotiations with DEFRA.

•        None of the professional advice, whether internal or external, suggested that the authorities were taking the wrong course of action.

•        There was ‘clear blue water’ between the recommended option, Option 2 - an Energy from Waste (EfW) plant financed from prudential borrowing, and the other alternative options.

The Chief Financial Officer gave a presentation titled ‘Waste Management Service’ under the following headings and made the additional comments summarised below.

Recommendations

1.       Finalise contract variation to develop a 200,000 tonne per annum Energy from Waste plant (to serve the counties of Herefordshire and Worcestershire).

2.       Councils borrow from the Public Works Loan Board (PWLB) to lend to Mercia.

3.       Agree with DEFRA reduced level of Waste Infrastructure Grant (WIG).

4.       Joint arrangement with Worcestershire to be updated to reflect this proposal and current best practise.

Key Features

5.       Agreement has been reached with DEFRA and HM Treasury to retain 44% of Waste Infrastructure Grant; this would also be an issue without an EfW plant and there had been a lot of discussions with government departments on this in recent months, including a meeting involving the Leader and the Secretary of State, to achieve the timescales required.

6.       The shortfall (in WIG) mostly covered from saving made from PWLB; due to using PWLB rather than commercial finance.

7.       Secures long term residual waste treatment capacity (landfill full by 2023/24 at current rates).

8.       (The EfW) Avoids potential, substantial termination costs.

9.       Possession of EfW and most other facilities reverts to both councils at end of 2023, Herefordshire will own a 25% stake in the EfW; the EfW would secure long term residual waste capacity going forward for at least the next 25 years.  ...  view the full minutes text for item 44.