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Background

This is a brief summary of Community R4C’s efforts to expose the scandal of the contract between Gloucestershire County Council and Urbaser Balfour Beatty for a waste incinerator at Javelin Park, Haresfield (at well over £600m, the biggest contract that GCC has ever entered into). It is a very complex case, shrouded in secrecy and lack of transparency.

The story goes back 10 years, when GCC started a procurement process for a solution to Gloucestershire’s residual waste. Despite massive local opposition, a contract with the preferred bidder was signed in February 2013, less than 4 weeks before the planning application was actually turned down by the council’s own Planning Committee. The Secretary of State called in the matter, there was a Planning Inquiry, and the Secretary of State overturned the decision of the Planning Committee in January 2015. Following a subsequent, failed legal challenge from Stroud District Council, planning was finally obtained in July 2015.

Community R4C was established in July 2015 with the aim to provide an environmentally and financially sustainable alternative to the incinerator. Despite very good progress, our efforts were undermined by the anti-competitive and appalling nature of the contract between GCC and UBB.

In early 2015, local campaigners put in a Freedom of Information request for the 2013 contract between GCC and UBB. GCC resisted and obstructed at every turn, appealing a ruling by the Information Commissioner’s Office that the information was in the public interest and should be released, and finally losing their appeal against this ruling at the First Tier Information tribunal in March 2017, when the contract was finally released.

The Contract revealed that GCC had negotiated a very poor deal (a good one for UBB). This included a huge compensation clause for exiting the contract, a very high price per tonne for the first 108,000 tonnes per annum of waste sent to the plant by GCC, combined with a very low price for subsequent waste undermining recycling, and a low price for commercial waste. Community R4C undertook an in-depth analysis and submitted formal complaints in April 2015 to the Competition and Markets Authority (who have responded that the complaint remains on their books, but is not high enough priority for them to assign resources to investigate), and on value-for-money grounds to the council’s external auditor, Grant Thornton (which is still not resolved, so that GCC’s accounts have still not been fully signed off).

It soon became clear that, because of the planning delay, the original contract was renegotiated and a new, second contract agreed. Campaigners went through the whole Freedom of Information process again, the ICO once again ruled disclosure, GCC once again appealed, a tribunal date was set for January 2019. Then on 20th December, with the prospect of losing that tribunal, GCC finally released the pertinent information. It showed that:

By renegotiating in secret without re-tendering, GCC broke procurement law
The contract price has increased by 30% in less than 3 years – by a staggering £150m
The award of the contract without competitive tendering breaks State Aid rules and, if proven, UBB would be required to pay a substantial part of the £150m back to GCC.
The Council will pay £189 per tonne for the first 108,000 tonnes of waste per annum, whilst commercial companies will only pay £62 a tonne.
The tiered pricing mechanism in the contract by which subsequent waste beyond the first 108,000tpa is charged at £16 per tonne, encourages the increase of ‘residual’ waste’ for burning and discourages recycling. 
Councillors and the public have been misled about the contract details and price and the ability of councillors and oversight committees to operate effectively has been seriously and improperly compromised.

At a recent Environment Scrutiny Committee meeting, Peter Bungard admitted that UBB were in a ‘very advantageous’ position and that 50% of the renegotiated price was for increased costs, and the other 50% because GCC were in a ‘disadvantageous position (because of the compensation clause) and in other words is just additional profit.

Community R4C has taken action in the High Court over the breaking of procurement rules. We have been working hard to progress this case and we are feeling cautiously optimistic. Our barrister has concluded that we have a 60% chance of winning.

Winning this procurement case is just the start. It will prove that the contractor, Urbaser Balfour Beatty, has benefitted from illegal state aid, and we will pursue getting the estimated £75m+ returned to the public purse. We are taking advice from a pro-bono barrister on State Aid rules.

It’s worth remembering why we are doing this in the first place: The Gloucestershire incinerator is a monstrous environmental crime. Thousands of us have been fighting it for many, many years, and it is now very clear to all how bad this is for Gloucestershire and our environment. Community R4C has been fighting for a well informed and much better alternative, long of the view we shouldn’t be just fighting against something, but also fighting for something. There is now cross party, cross government, international recognition that incineration of waste is harmful – worse than landfill, and we need to avoid this. 
 
Over 65% of the electricity from the Glos. incinerator comes from burning plastic. This is recyclable and is derived from oil, a fossil fuel. The incinerator is so badly designed (old tech) that only around 20% of the energy in the plastic ends up as electricity (about a third of a modern coal plant). So as a power plant it is massively worse than the worst coal or oil burning power station. Its carbon footprint is horrendous. By comparison our alternative would save 100,000 tonnes pa of CO2 emissions
 
It also burns metals – including heavy metals. A significant proportion of the waste (which is not pre-sorted) is electronics goods – including valuable and rare heavy metals. An incinerator wastes this, worse still, burning heavy metals produces highly toxic residues. Burning material with chlorine produces dioxins, and small particulates, which cannot be fully cleaned in the emissions – so harmful health effects, adding to the harm from diesel emissions.
 
The contract structure means that recycling done by districts councils will effectively much reduce – the contract makes it more than three times cheaper to throw recyclables in the incinerator than to pay districts to recycle.
 
And it’s costing a huge amount of public money – £650M which is at least three times the cost of alternatives over 25 years, for a plant designed to last well beyond 2050 (when we should be zero carbon). This public money should go to much better causes, and we must spend infrastructure money on planet friendly, climate change respecting programmes.

In terms of wider, national implications, this is an example of the lack of competence at local government level to negotiate large contracts; of the secrecy that shrouds the use of public funds in the name of ‘commercial confidentiality’; of long-term (25-year) PPP contracts locking into very poor environmental outcomes that go against climate change objectives because of high CO2 emissions, are a barrier to recycling and reducing waste, and have serious health implications.

Our work has national significance. We can and should be an exemplar for the change that is needed if we are to value our planet.

Timeline

2007

Cabinet approves the Residual Waste Procurement Plan for diversion of residual waste from landfill and the Outline Business Case for submission to DEFRA in order to obtain PFI credits for a long term waste contract.

2008

Gloucestershire County Council (GCC) buys land at Javelin Park, paying more than double what the previous owners had paid just the year before.

By going for a ‘technology neutral’ procurement process, GCC shuts down any public debate on waste options.  The process remains secretive throughout.

2010

Defra withdraws PFI fundingon the basis that, on reasonable assumptions (the project) will no longer be needed in order to meet the 2020 landfill diversion targets set by the European Union” 
GCC decides to continue with the residual waste procurement process.

2012

The Council’s Cabinet agrees to contract with UBB for an Energy from Waste plant at Javelin Park.

The Waste Core Strategy – the planning document against which the planning application for the Javelin Park incinerator would be judged – is adopted in November.

2013

The contract is signed in February 2013, less than 4 weeks before consideration of the application at Planning Committee. GCC’s own Planning Committee unanimously rejects the application on 21st March 2013. The matter is ‘called in’ by the Secretary of State.

A 6-week planning inquiry is held between November 2013 – January 2014.

2015

In January, the Secretary of State, Eric Pickles, reverses the decision of GCCs planning Committee and grants planning permission.

In February a petition signed by 7,600 people asking GCC to terminate the contract is submitted.  At an Emergency meeting, the Council debates a motion to do just that with immediate effect, but the motion is lost by 24 for and 27 against – a closely split vote.  During the debate, Cllr Theodoulou tells councillors that the choice is between “The energy from waste solution (which) would provide £150 million worth of savings and the motion before members, which would incur cancellation costs up to £100 million”, but provides no data to substantiate these claims.  They are questioned at the time, and later by the judge at the Information Tribunal. The recently released contract indicates that the claims were incorrect.

In March campaigners submit a Freedom of Information request for the full contract. GCC subsequently releases a heavily redacted version in May and campaigners appeal to the Information Commissioner’s Office for full disclosure.

The ICO decision notice on 8th October 2015 requires GCC to “Disclose the withheld information to the complainant.” GCC appeals this decision and the case goes before a Tribunal.

The contract, even though signed, is renegotiated outside of any competitive pressure. In November 2015 the Council’s Cabinet agrees a “£17 million one-off financial contribution”.

That same month members of the council’s oversight and scrutiny management committee attempt to call in the matter but the vote is defeated by the chair, who mysteriously votes for the motion as a member of the committee but against it in his role of chair with casting vote.

2016

The renegotiated contract is signed but once again kept secret from councillors and the public on the same previously defeated grounds as before.

Chief Executive of Gloucestershire County Council, Peter Bungard becomes highest paid public sector worker in the South West after receiving a large discretionary award into his pension fund and reducing his working hours.

Work on the incinerator starts in November.

2017

The Information Tribunal’s decision on 10th March 2017 requires that nearly all the redacted information be released because public interest overrides commercial interest in virtually every aspect of the contract. Judge Shanks expresses “some incredulity that it could possibly cost £100 million to cancel a contract worth some £500 million over 25 years at a stage when construction had not even started.” He further states that “at the time of the requests in January to March 2015 the controversy was particularly intense and there was a danger that the whole Contract would have to be terminated at a cost, according to the Council, of up to £100 million. At that stage, in our view, the Council’s obligation to act transparently was particularly strong as was the public interest in full disclosure”.

Community R4C submits a complaint to the Competition and Markets Authority on the basis that the pricing structure in the contract, involving huge fixed costs for 25 years and unfair market pricing, has the effect of foreclosing all competition and preventing technological innovation.

As local residents, Community R4C directors submit formal complaint to the councils auditors, Grant Thornton, on Value for Money grounds.

2018

The council prepares evidence for another information tribunal hearing, then withdraws its appeal at the last minute and discloses crucial information about the new contract on 20th December.

2019

On 14th January Community R4C serves a letter before action on Gloucestershire County Council alleging a breach of procurement law. A claim is filed with the High Court five days later.