Incinerator deal saga remains red hot
By Andrew Merrell | 7th January 2019
Controversy continues to keep the multi-million-pound Gloucestershire waste incinerator a seriously hot topic for the leaders of the county council.
Since the initial decision four years ago to build the giant incinerator off the M5 near junction 12, just south of Gloucester and in Stroud district it has been dogged by a clamour for answers.
Forced to reveal more about its deliberations and costs last week the council revealed the project would cost the county £100 million more than expected - taking the cost to £600 million.
And today there is a call for a public inquiry.
Councillors in opposition to the Conservative-run administration, and a county MP, have published an open letter calling for an independent inquiry into the contract negotiations over the Javelin Park facility.
The letter, to Peter Bungard, the county council chief executive, claims there is a "clear case of misleading the public" and points to perceived failings in the council's scrutiny processes.
The council was forced last year to reveal more information around the deal with contractors Urbaser Balfour Beatty (UBB), publishing at the eleventh hour as the nation broke up for Christmas.
It is this new information that prompted the lengthy letter (published in full below), which questions figures previously revealed and how the council continues to handle the saga.
"We also note that by withdrawing the appeal against the Information Commissioner's rulings on disclosure of documents, Gloucestershire County Council have never proven that commercial confidentiality prevented the earlier disclosure of these documents," said the letter.
"Taken together, these points illustrate major failings in the provision of clear and accurate information to support public and council scrutiny of this major project: with substantial financial and environmental consequences for the council, and the residents of Gloucestershire.
"We believe the only way to fully address outstanding questions about this project, to ensure councillors and other stakeholders have the information they need to plan for the future, and to rebuild trust in the council's handling of major projects, is to have an entirely independent inquiry."
The letter is signed by Cllr Rachel Smith, Green Group Leader, Gloucestershire County Council, Cllr Paul Hodgkinson, leader of Gloucestershire Liberal Democrats , Cllr Lesley Williams MBE, county councillor for Stonehouse, David Drew MP, Member of Parliament for Stroud, Dr Simon Pickering Chair of Environment Committee, Stroud District Council, Dr Fran Boait, Labour Parliamentary Candidate for Gloucester, Cllr Jeremy Hilton, Gloucestershire Liberal Democrats' Spokesperson for Waste, Cllr Martin Whiteside, Green Group Leader, Stroud District Council, Cllr Eva Ward, County Councillor for Stroud Central, Tim Davies, local campaigner.
In response to this morning's letter the county council's Conservative group issued the following statement: "It is really disappointing to see the usual suspects playing party politics over the incinerator.
"The detailed independent Value for Money report released just before Christmas makes it clear that Javelin Park will save taxpayers over £100m.
"Opponents to Javelin Park have no credible alternative, and we are rapidly running out of landfill space. Ironically it was the Liberal Democrats and Labour who identified the Javelin Park sight as suitable for a "strategic" incinerator in 2004 - something never opposed by Stroud MP David Drew.
"Whilst opposition politicians play political games, we will keep working to boost recycling, end landfill, and deliver an environmentally friendly solution which will generate enough electricity for the equivalent of 25,000 homes - while saving £100m."
Ernst & Young's value for money report into the project was drawn up in 2015, and is on the list of documents published in December for the first time.
The local authority had been gearing up to appeal this month against a ruling by the Information Commissioner's Office to publish the documents, but changed its mind.
According to the council the report still proves the project is affordable, but the cross-party group claims it was not told about the cost increases stated in the report when they voted back in 2015.
The letter's authors have the support of campaigners from NoMoInGlo and eXtinction Rebellion.
Members of both are expected at the incinerator site tomorrow (Tuesday, January 8) from 8am.
Punchline is expecting a comment from Gloucestershire County Council today.
Open Letter: Call for an Independent Inquiry into Javelin Park Incinerator Contract Negotiations and Cost Increases
We, the undersigned, call upon the Chief Executive of Gloucestershire County Council to immediately establish an independent inquiry into the award and structure of the Javelin Park Incinerator Contract.
We note with grave concern that recently released documents show that:
• The headline cost of this project rose to over £600m between 2013 and 2016, with base tonnage gate fees rising by 30%, whilst the Council's public descriptions of the project continued to cite a £500m project. This is a clear case of misleading the public.
• Contract renegotiation took place without any competitive pressure. Although reports to Cabinet stated the authority was having success negotiating down the increased capital price put forward by UBB of £177m (up from £137.4m), the final signed figure was even higher at £178.9m. We need to know how a 30% increase in the largest contract the Council has ever signed could justifiably be accepted without informing the full Council.
• An option for prudential borrowing to fund the project that could have brought substantial savings was not brought forward for consideration. We need to know why a potentially cheaper route to construction of the Energy from Waste plant was ignored in place of a private funded option, that bring higher interest fees and overall costs.
• In November 2015, Cabinet were informed that the maximum saving excluding the saving from not paying cancellation costs was £93m, yet savings claims of £150m and £100m over the lifetime of the project have consistently been used in public. We need to know where the decision was made to provide misleading figures, and who decided not to provide the accurate information that was requested during multiple scrutiny processes.
• The contract structure revealed in these documents means that a low average gate fee can only be achieved with high waste flows: leaving substantial risk on the Council that it will pay an effective gate fee far above market rates, and that the ability of future administrations to reduce waste volumes and promote recycling will be severely restricted. We need a clear public model of this contract to allow open discussion of waste reduction strategies in light of its financial structure.
• The Council has delayed publication of important environmental information found in the Ernst and Young report in order to commission an additional report from Ernst and Young that seeks to provide justifications for the project. We need a clear account of how decisions to withhold information were made, and whether these were consistent with the obligations on the Council under Freedom of Information and Environmental Information Regulations.
We also note that by withdrawing the appeal against the Information Commissioner's rulings on disclosure of documents, Gloucestershire County Council have never proven that commercial confidentiality prevented the earlier disclosure of these documents.
Taken together, these points illustrate major failings in the provision of clear and accurate information to support public and Council scrutiny of this major project: with substantial financial and environmental consequences for the Council, and the residents of Gloucestershire.
We believe the only way to fully address outstanding questions about this project, to ensure Councillors and other stakeholders have the information they need to plan for the future, and to rebuild trust in the Council's handling of major projects, is to have an entirely independent inquiry.
The Terms of Reference for this inquiry must cover:
• Whether the contract signed constitutes Value for Money;
• Whether Cabinet and Councillors were adequately and accurately informed of all material facts that would affect their decisions in relation to the project, including, but not limited to, the November 2015 Cabinet Decision to authorise a revised Javelin Park contract without revealing the new contract was 30% more expensive than the prior contract, nor that options for prudential borrowing could have substantially reduced the lifetime cost of the project and the effective gate fees;
• Whether the structure of the current contract is in line with Council objectives to reduce waste, and whether the structure adequately protects the authority from the risk of higher-than-average gate fees in events including (a) waste flows falling below the forecast scenario; and/or (b) the electricity upside of the project generating less income or saving than anticipated;
• Whether public resources have been used correctly and prudently in fighting a legal battle against the disclosure of key contract related documents, and in commissioning Ernst and Young to produce an additional report in December 2018 to provide justification for the project;
• Any changes that should be made to procedures, processes and rules at the Council to ensure full transparency and effective scrutiny of future contract negotiations.
We note that the Council's current auditors, Grant Thornton, were responsible for the financial models used by UBB in the development of this project, and as such have a clear conflict of interest when it comes to assessing this project. We therefore specifically note that neither Ernst and Young, nor Grant Thornton, should be directly involved in order to protect the independence and integrity of an inquiry.
Cllr Rachel Smith
Green Group Leader, Gloucestershire County Council
Cllr Paul Hodgkinson
Leader of Gloucestershire Liberal Democrats
Cllr Lesley Williams MBE
County Councillor for Stonehouse
David Drew MP
Member of Parliament for Stroud
Dr Simon Pickering
Chair of Environment Committee, Stroud District Council
Dr Fran Boait
Labour Parliamentary Candidate for Gloucester
Cllr Jeremy Hilton
Gloucestershire Liberal Democrats' Spokesperson for Waste
Cllr Martin Whiteside
Green Group Leader, Stroud District Council
Cllr Eva Ward
County Councillor for Stroud Central
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