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Agenda item

Veolia and Idverde - deep dive into financial aspects of the contracts


Chris Lee, Director of Environment and Regeneration, introduced the public and exempt reports. He said that the commercially sensitive information on deductions from the contractors had not been finalised and were therefore subject to change. Some deductions have been calculated ready to be applied and these are now mainly calculated and applied automatically through integrated software between the council and the contractor. Chris Lee added that financial incentives and deductions are part but not the whole of the contractual relationship, that it is importance to get the balance of these right to incentivise performance and financial benefits and that this is subject to an annual review.


In response to a question about the publication of monthly performance information, Chris Lee said that an agreed set of indicators would be agreed across the partnership authorities and these would be published on the South London Waste Partnership (SLWP) website, with links from borough websites. Annie Baker, SLWP Strategic Partnership Manager, explained that Sutton Council had been able to consider publication of some performance information already because entrance in to the new contract service had started earlier.


The task group shared their experiences of using the IT system to report service failures and the difficulties they had experienced in re-reporting a missed collection that hadn’t been resolved and a general lack of feedback on what has happened as a result of the report. Annie Baker explained that once a service failure has been reported it remains open until resolved and can not be re-reported until it has been closed on the IT system. This leads to a ‘Refresh’ of the deduction, where applicable, for each period that it remains unresolved on the system


Chris Lee emphasised that he was not happy with Veolia’s performance at the moment and that, although there have been improvements, this has still not reached an acceptable level. He said that the council has taken on some temporary staff to assist with performance monitoring and handling of complaints. Councillor Mike Brunt, Cabinet Member for the Environment and Street Cleanliness, assured the task group that he would continue to do all he can to bring influence to bear to improve the situation, including improving the feedback mechanism on the online system.


Chris Lee said that it is important that residents continue to log missed collections and other service failures through the online system so that these can be logged and dealt with as well as being used to generate information for use in calculating financial deductions. He added that his main motivation is to obtain a high level of service for residents rather than to collect financial penalties as these were an indicator of poor service.


In response to a question about how service standards are communicated to street cleaning operatives, Chris Lee said that that was a matter for the contractor, that the council is not involved in operational detail or training but rather in ensuring that service levels are high.


The task group RESOLVED to move to a closed session in order to discuss the exempt information that had been provided to them. The rest of this minute is a public record of this discussion, without inclusion of any commercially sensitive information.


Public minute of closed session

Chris Lee outlined the information that had been provided in the confidential appendices, giving examples of the level of financial deduction that might be applied to each of the service performance indicators (SPIs). He re-iterated that deductions had already been made and that these were increasingly being automatically deducted from invoices by Veolia on a monthly basis rather than waiting till the end of the year but that there would be discussion and judgements made regarding the final amounts to be applied for 2017/18 and 2018/19.


In response to a question about the communications plan around deductions, Chris Lee said that there would be a report to the Sustainable Communities Overview and Scrutiny Panel and possibly also to Cabinet on the final position and annually. He undertook to consider the most appropriate way to communicate this to residents.


In response to a question about the level of deductions made, Chris Lee said that it was a significant amount for Veolia and that reputational damage would also likely be a significant concern for the contractor should they be seen to be failing.


Charles Baker, Waste Strategy and Commissioning Manager, responded to a question on garden waste to explain the mechanism by which costs and profits are shared between the council and IdVerde.


In response to questions about litter in parks, Doug Napier (Greenspaces Manager) and Councillor Nick Draper (Cabinet Member for Community and Culture) shared information about the recent project in Wandle Park during which litter bins were removed to assess what impact this would have on the amount of litter dropped.

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