Chris Lee provided an introduction:

·         The report on the South London Waste Partnership is provided in two parts; a report for scrutiny and a draft Cabinet report;

·         This process of decision making is happening across all four boroughs that comprise the partnership with the bidder selection having just been endorsed by the partnership board;

·         Identification of the preferred and reserve bidders is a significant milestone but it isn’t the end of the process; this will happen in December when contracts will be signed following a period of fine tuning; 

·         Pleased to be recommending two different preferred bidders for Lots 1 and 2 that have the relevant waste management and horticultural experience;

·         The savings that will be realised from the shared service are currently greater than initially planned but these won’t be confirmed until the contract is signed in December;

·         The preferred and reserve bidders have been selected as part of a competitive dialogue process focused on agreeing the outcomes to be achieved through the contract;

·         Noted that this builds on the success of the wheeled bin pilot which saw an increase in recycling and decline in street waste;

·         Staff engagement in the process has been important.  It is hoped that the preferred bidders will become approved bodies to the Local Government Pension Scheme.  Once the contracts are in place, work will start on the TUPE process; and

·         A client structure is being established to manage the contract.

Terry Downes of the GMB was then invited to address the Panel specifically on the implications of Lot 2;

·         Thanked the Panel for allowing him to speak;

·         Highlighted that the Council’s negotiations with the bidders over reducing TUPE rights is in breach of regulations and that staff affected by Lot 2 are not happy to move to annualised hours;

·         The new client contract structure means establishing three new positions costing £150K but it is not stated in the documentation whether the projected savings do or don’t take this into account;

·         Highlighted that other Councils (Croydon) have outsourced services to benefit from economies of scale but that this hasn’t come to fruition and services have ended-up coming back in-house.  This demonstrates that savings are not guaranteed;

·         Noted that staff were not able to bid because they weren’t able to be part of the competitive dialogue process but that proposed cost savings could have been achieved through the introduction of fortnightly waste collections and better utilisation of available transport; and

·         Stated that staff satisfaction is very low and that the proposed solution by the preferred bidders represents a reduction in service to Merton residents.

EXEMPT SESSION

It was proposed by Councillor Sargeant, seconded by Councillor Makin and accepted by the other members of the Panel that it should start its discussions in exempt session given the need of Councillors to refer to information in the exempt agenda.  As a result members of the public left the meeting.

Some members (Councillors Sargeant, Holden and Badenoch) expressed dissatisfaction because they hadn’t been provided with the detailed scoring used to select the preferred and reserve bidders.   Also, that the waste service currently offered in Merton hadn’t been costed by bidders for comparative purposes and that the solution offered by the preferred bidder for Lot 1 is a diminution in waste services based on less frequent collections and the need for residents to sort and store waste in a greater number of containers.  Specific concern was expressed regarding properties that don’t provide sufficient storage for the increased number of waste containers and that a one size fits all approach will not be suitable for all residents.

In response, officers clarified:

·         Total scores for all bidders are provided in the exempt agenda;

·         The preferred bidders for Lots 1 and 2 had scored highest across price and quality; selection has not been determined solely on price;

·         The objectives of the procurement are: to target optimal savings, deliver high customer satisfaction; improve environmental and carbon outcomes and develop community engagement in the maintenance and oversight of green spaces;

·         The waste service proposed by the preferred bidder, specifically splitting paper and card from other recycling aims to address the fact that Merton is only recycling 37% of its waste compared to a target of 60% and to enable commercial income to be maximised;

·         The proposed waste service is not a diminution in service; residents will benefit from collections every week (three and two collections on alternate weeks);

·         All bidders proposed a two-weekly schedule for residual waste collections with only minor variations; and

·         This is not a one size-fits-all solution; those properties for which the proposed solution is not suitable will be offered an alternative.  This will be defined and agreed through consultation.

PUBLIC SESSION

At this point members of the public were invited back into the meeting.

Some members (Councillors Sargeant, Holden and Badenoch) highlighted that Cabinet had not yet responded to the Panel’s reference made following the previous report on the wheeled bin pilot (here).  Also, that the pilot couldn’t be regarded as a successful trial of the waste service being proposed by the preferred bidder.  Firstly, the pilot used a scheme that was different from the solution being proposed.  Secondly, the properties involved in the pilot were not representative of all across the borough.  Information was requested on available alternatives and what mechanism will be used to prevent dry mixed recyclables becoming litter when stored and collected from a box without a lid.  Members enquired how the projected cost savings will be achieved.

In response, officers clarified:

·         Having gone to the market for the optimal solution this is what has been provided.  Also, this is already being used elsewhere;

·         The solution offered by the preferred bidder splits the borough into three neighbourhoods (none go across ward boundaries).  Each will have a contract manager who will be responsible for working in partnership with the local community including attending community forum meetings, workshops etc;

·         Procurement through the South London Waste Partnership requires all four participating boroughs to act in unison.  Merton could withdraw from the partnership but if the three remaining partners can’t award at this stage, Merton would become financially liable and would effectively be starting again on a two year process;

·         Planned savings are being achieved through economies of scale from both Lots;

·         Between now and December, there will be a period of fine tuning.  This will include consideration of how to prevent dry mixed recyclables becoming litter.  Options currently being consider are a resealable sack for storage and a stretched cover to go over the box;

·         For multi-occupancy dwellings, Eurobins will continue to be sited in designated collection points.  Collection will happen a minimum of once a week but where lack of capacity is an issue, collections will happen more frequently;

·         The price quoted by the preferred bidder has been based on its due diligence on property types.  Any changes to the assumptions it has made in the costing will be to its detriment as the price cannot now be changed; and

·         The new recycling code of conduct is shifting away from comingled recycling solutions in order to maximise economic value and benefit to the environment.  Where a greater volume of recycling is achieved the contract provides a profit sharing mechanism benefiting the Council.

In response to member questions, officers clarified:

·         The contractor will have responsibility to provide evidence for enforcement where the waste collection service is misused, (for example, for commercial waste) and the contractor will be responsible for street litter collections;

·         TUPE has not yet been applied.  There have been no negotiations with the preferred bidder regarding annualised hours.  The preferred bidder suggested some of the changes required to meet our needs.  Noted that if the service were continuing in-house, Merton would also be considering annualised hours as this is the best way to deliver a seasonal service;

·         Planning policies are in the control of the Council and therefore it can specify that any new development accommodates the needs of the new waste service;

·         The new waste service will link to the Council’s new CRM system on which residents will have to register.  This will link with technology in cabs which will have the ability to tell residents if their bins have been missed, are yet to be emptied or were incorrectly put out.  This will also be used to provide feedback if rubbish is contaminated.  The new CRM will go live shortly and meetings are starting between the preferred bidder and the Council’s IT developers;

·         It is intended that the same level of performance management information will be provided as currently with the additional ability to scrutinise this by the three neighbourhood areas;

·         New bin lorries will be purchased to fulfil the contract.  The Council needs new lorries and it is cheaper for the Council rather than the preferred bidder to borrow the money for the purchase with the difference in interest rates being reflected in the price of the contract;

·         The needs of disabled residents have been explicitly considered in selecting the contractor; and

·         The department can provide Panel members with an overview of the recycling schemes used in London and what rates of these achieve.

Councillor Garrod, Cabinet Member for Cleanliness and Parking stated the proposed solution is a fantastic opportunity to bring residential waste into the 21^st Century including utilising the benefits of technology and committing to fulfil missed collections.  This will bring Merton into line with the two thirds of the country that have wheeled bins and 70% that have collections every other week.  This is built on a pilot that demonstrated high levels of resident satisfaction.  The alternative is for the Council to find a £2m cost saving by some other means which could mean the introduction of pavement collections, residential charges, three weekly or even monthly collections as in Wales. 

Four motions were proposed and voted on:

·         Proposed by Councillor Sargeant (seconded by Councillor Holden) : The Panel noted the draft report and agreed to forward a reference to Cabinet that it should use the period of ‘Preferred Bidder Fine Turning’ to:

1.    Determine how many households would experience significant difficulty in storage and/or presentation of wheeled bins for regular emptying (five in favour and one against); and

2.    Reconsider the introduction of two separate containers for recyclable materials, since Merton currently has the technology to comingle all recyclables (three in favour and 5 against).

·         Proposed by Councillor Holden (seconded by Councillor Badenoch):

3.    The proposed solution from the preferred bidder represents a significant change in service and as such it should be sent to Full Council to make the decision (three in favour and four against); and

4.    Cabinet should consider retention of a weekly service and find other ways to achieve the necessary cost savings (two in favour and four against).

RESOLVED: To make the following reference to Cabinet: the Panel noted the draft report and agreed to forward a reference to Cabinet that it should use the period of ‘Preferred Bidder Fine Turning’ to determine how many households would experience significant difficulty in storage and/or presentation of wheeled bins for regular emptying.