Decision Maker: Assistant Director - Environmental Services & Climate Change
Decision status: Recommendations Approved
Is Key decision?: No
Is subject to call in?: No
The Assistant Director Environmental Services
and Climate Change, in consultation with the Executive Member for
Managing our Environment, has decided to not exercise the option to
extend the existing Services Contract for a further 5 year
period.
The Assistant Director Environmental Services and Climate Change,
in consultation with the Executive Member for Managing our
Environment, has also decided to develop a new Services Contract
that better reflects the responsibilities of the new unitary
council and that a new Services Contract will be entered into from
18 September 2025, subject to approval of Gateway 3 by Procurement
Assurance Board and in line with the Council’s financial
governance process, and that further consideration and approval of
the detail of the new Contract is delegated to the Assistant
Director Environmental Services and Climate Change in consultation
with the Corporate Director, Resources.
On 18 March 2014, the North Yorkshire County
Council (“NYCC”) Executive agreed:
• The principle of awarding relevant contracts for future
waste services to Yorwaste Limited (“Yorwaste”) without
competitive procurement, where the conditions for the Teckal
exemption are satisfied.
• To delegate authority to the Corporate Director (BES) to
determine which future waste service contracts are to be awarded to
Yorwaste.
On 18 September 2015, NYCC and Yorwaste entered into a contract
(“the Services
Contract”) for the provision of waste management services
utilising the Teckal exemption.
City of York Council and Yorwaste entered into separate services
contracts at the same time. The individual services being provided
are detailed in a series of schedules to the Services Contract
(“Schedule”); each Schedule setting out the
specification in relation to each service. The addition or removal
of services is practically achieved by varying the agreement to add
or remove Schedule(s).
When the Services Contract was written in 2015, NYCC was able to
exercise the duties and powers of a Waste Disposal Authority (WDA),
whilst the district and borough councils, as Waste Collection
Authorities (WCA) had different powers. With the formation of The
North Yorkshire Council (“NYC”) on 01 April 2023, the
new North Yorkshire Council became a Unitary Authority encompassing
the powers and duties of both a WDA and a WCA.
The Services Contract has an initial contract Term of 10 years
which ends on 17 September 2025 with an option for a 5 year
extension, but there is a requirement that “At least 12
months before 17 September 2025 the Council may require Yorwaste to
continue to provide the Services for a further term of five years
commencing on 18 September 2025, provided that the Charges shall
not be increased as a result of the extension, other than as agreed
by the Parties.”
The contract renewal timing provides an opportunity to reflect on
the existing contract to ensure it meets the changed status of the
new Council and its expanded range of powers and
responsibilities.
A number of clauses within the Services Contract are no longer
relevant to the new North Yorkshire Council’s Unitary status
and so need to be revised. This could be done through a series of
complex variations to the existing agreement if we extended it, or
we could decide not to extend the existing Contract and enter into
a new Services Contract with Yorwaste Ltd that is better suited to
the needs of the new NYC. Legal advice is that a new contract is
the best way to proceed given the extent of changes that would need
to be made.
National waste policy and legislation in 2024 is also much
different than was foreseen in 2015 and the current Services
Contract allows a limited ability for the Council to change
services specified within the Schedules to react to that already
changed and impending legislation.
A new contract also allows us to introduce elements of flexibility
into the contract and to tidy up areas where the contract and
subsequent Schedules are no longer fit for purpose.
There are also other areas of the original drafting that have
evolved over time as operational practices have changed, or it was
realised that the original drafting did not achieve the original
intent. There are also some services that Yorwaste provide that are
not referenced in the contract at all. These are mostly in relation
to the interface with the Allerton Waste Recovery Park contract
with Thalia as that contract did not commence until 2018. A new
Services Contract could address all of these inconsistencies and
produce a more flexible, suitable and modern agreement.
The City of York Council (“CYC”) has a similar service
contract albeit with a slightly different end date of 30 September
2025. CYC have always been a Unitary Authority and their contract
was written to suit them, but they are also considering their
position in relation to exercising the option to extend their
contract and will make their own decisions on their approach.
However, both CYC and NYC are in discussion with each other due to
the impacts any decision taken by one party may have on the
other.
There is a potential conflict of interest in relation to the fact
that the Corporate Director of Environment is also a Director of
Yorwaste. For this reason, any Council decisions made in relation
to Yorwaste were delegated to the Assistant Director of
Environmental Services and Climate Change on 6 December 2023.
Options to provide the services through third
party contracts were considered and discounted due to the
Council’s preference to continue to provide the Services
through its own Teckal compliant company. A suitable Teckal
compliant Services Contract also removes the cost and time attached
to the complex procurement of multiple services, at a time when
there is so much change within national waste policy and
legislation, some of which is known but other details of some
legislation is still unknown. Procuring services through open
competition with so many elements of legislation unknown at this
time adds a level of risk (and costs) to the Council.
An option to extend the existing agreement for 5 years was also
considered, however so much has changed since the original drafting
that it is no longer fit for purpose for the new North Yorkshire
Council and so multiple complex variations will need to be carried
out. From consultation with the Legal Services contract team the
advice is that better value can be achieved by the drafting of a
new Services Contract, instead of investing time in amending the
existing contract to the level that is required.
Publication date: 13/09/2024
Date of decision: 12/09/2024