Cabinet 15th October 2013

18/11/2013

CHESHIRE EAST COUNCIL
Cabinet
Date of Meeting: 15th October 2013
Report of: Head of Environmental Protection & Enhancement
Subject/Title: Major Change Project 6.4 – Environmental Operations
Change Programme (previously known as “Determine
future delivery model for waste management services”)
(Forward Plan Ref: 13/14-48)
Portfolio Holder: Cllr David Topping, Environment
1.0 Report Summary
1.1 Since the cabinet report in June 2013, significant work has been carried out to
further define and scope out the overall Environmental Operations Change
Programme and the five major project strands within it. The transformation
team have worked closely with Members, Corporate Enablers, Trade Union
representatives and Employees to consult on and further formulate the
proposals. The team have also further defined the related cost of investment
and capital investment required to deliver the overall programme and the
projects within it, these being:
A. Existing Service Efficiency Review
B. Future Service Delivery Model
C. Review of Depot Infrastructure
D. Interim Residual Waste Solutions & Longer Term Procurement
E. Strategy (which is being governed through the Policy Development Group
(PDG) process and is likely to form a separate paper at a future date)
1.2 Cabinet took a decision in principle in June 2013 to progress with the
development of a wholly owned company for the Waste and Recycling
Management Service. As the project has progressed and in consultation with
the Portfolio Holder for the Environment, it has been recognised that other
operational services needed to be considered. Therefore, the scope has
been broadened to include Waste and Recycling Management Services, Fleet
Management Services and Streetscape Services. In addition, running in
parallel to this, was the proposed transfer of the Mechanical Sweeping
operation to the Highways Service. However following further investigation
and engagement with Members and Trade Union Representatives, it was
acknowledged that this activity offers greater opportunities by being
incorporated into the scope of the new wholly owned company for
Environmental Operations.
1.3 Significant progress has been made to move this transformation programme
forward to the benefit of Cheshire East residents. In order to meet the
Agenda Item 13
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Council’s future Business Plan objectives and outcomes around value for
money and sustainability, there is a need to invest in depot and fleet
infrastructure to ensure that the service can address future needs whilst
retaining its current high customer satisfaction levels. To this end, a wholly
owned company has now been registered with Companies House which will
help to facilitate culture change, improving responsiveness and enabling a
stronger focus on delivering targeted services to Cheshire East residents.
1.4 As per the requirements of the June 2013 cabinet report, the report tracks
progress made against the various project streams and focuses specifically on
agreed milestones including the recommended legal form. In addition the
report clarifies the scope of the proposed alternative delivery vehicle.
2.0 Recommendations
Cabinet is recommended to:
2.1 Programme and Project Cost of Investment
Note and approve that the revenue cost of investment needed to support
programme delivery this year is available from existing approved
transformation budgets. (See Section 7).
2.2 Future Service Delivery Model
Note and approving the findings of the options appraisal submitted to Cabinet
in June 2013 and subsequent legal advice that has concluded that the most
appropriate delivery model is that of a Teckal exempt, wholly owned company
(WOC) limited by shares. (See Appendix 3 for further details including an
update on key milestones from the June 2013 Cabinet report).
2.3 Approve the defined scope which previously focused on the Waste delivery
model to include:
•
Waste and Recycling Management Service
•
Fleet Management Service
•
Streetscape Service (Mechanical Sweepers, Grounds Maintenance &
Street Cleansing - see Appendix 3 for further details).
2.4 Agree that the WOC formed in June 2013 includes the defined scope and the
transfer of the Waste and Recycling Management Service, the Fleet Service
and the Streetscape Service with an effective operational target date of
January 2014 subject to internal and external dependencies.
2.5 Depot infrastructure
Note and approve that further to the June 2013 Cabinet Report that depot
infrastructure work is progressing. Feasibility work is ongoing with a detailed
scope of improvements developed for Pyms Lane that include improvements
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to the transfer tip along with improved welfare facilities. The Northern depot
solution is still being developed (further detail is available in section 7).
2.6 Replacement of Fleet
To approve the procurement of a rolling fleet replacement programme to
commence in 2014/15 which will be financed through existing revenue
provision.
Recommend to Council a Supplementary Capital Estimate of £3m for the
replacement of the 20 waste fleet vehicles in 2014/15. The vehicles will be
procured through a framework agreement during 2013/14 to ensure delivery
for June 2014 (further detail is available in section 7).
2.7 Give delegated authority to the Head of Environmental Protection and
Enhancement (SRO for the Programme), the Monitoring Officer and the
Section 151 Officer to commence the detailed implementation of the
Environmental Operations Change Programme including the Wholly Owned
Company and other project strands, in consultation with the Portfolio Holder
for Environment.
3.0 Reasons for Recommendations
3.1 There is a need to achieve best value for the services that the Council directly
commissions and provides, and to reduce net operating cost wherever
possible, whilst at the same time maintaining the best possible service for its
residents in line with the Council’s agreed three year plan.
3.2 The Environmental Operations Change Programme as a whole, delivers
value for money in a sustainable way whilst also making a significant
contribution to the mitigation of existing service risks around on-going
service/business continuity, service delivery and contingency arrangements.
3.3 The revenue and capital funding requested supports programme delivery on
the individual projects which in turn delivers £2.5m in savings by 2015/16 (as
approved and included in the 2013-14 – 2015-16 Business Plan – Feb 2013)
while also putting in place much needed fleet, depot and organisational
infrastructure to support efficient operations, service/business continuity and
the long term viability of the proposed WOC. The replacement vehicle
programme will be procured through a framework agreement during 2013/14
to ensure delivery can commence in June 2014
3.4 As the project has evolved (Major Change Project 6.4), it has become
apparent that the range of activities under review is wide ranging and critical
to Service continuity. Therefore, it has been necessary to manage the project
as a programme of change broken down into several individual project
streams as outlined in 1.3 above, these being:
A. Existing Service Efficiency Review
B. Future Service Delivery Model
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C. Review of Depot Infrastructure
D. Interim Residual Waste Solutions & Longer Term Procurement
E. Strategy
Although each project can largely be managed independently, it must be
noted that none can be delivered/progressed in isolation and only when
combined, will deliver the service improvements and benefits required,
namely:
•
Positive move away from landfill disposal methods;
•
Maintaining current levels of service satisfaction (in excess of 85%) that
the residents of Cheshire experience;
•
Securing service cost reductions of £2.5m by 2015/16.
These inter-dependencies were acknowledged at the Executive Monitoring
Board (EMB) during the quality assurance review, noting that the benefits
realised in each project stream need managing at the project level but
amalgamating at programme level in order to address the Council’s
objectives.
4.0 Wards Affected
4.1 All wards are affected.
5.0 Local Ward Members
5.1 All local ward members are affected.
6.0 Policy Implications
6.1 The Council’s three-year plan budget principles – “We will ensure that those
who provide services, whether in-house or externally, give real value for
money”.
6.2 This initiative aligns with Outcome 4 (Cheshire East is a green and
sustainable place) of the Council’s Three Year Plan.
6.3 The Council’s Business Plan identifies efficiency savings linked to Waste
Management services (Priority 6. Redefining the Council’s role in core placebased
services - 6.4: Determine future delivery model for waste management
services and 6.2 Develop new delivery model for streetscape and
bereavement).
7.0 Financial Implications
7.1 Revenue
Note that revenue cost of investment needed to support programme delivery
this year is available from existing approved transformation budgets. Future
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investment will covered through the Council’s business planning process.
(See Appendix 1: Programme Overview for further information)
7.2 Capital
A Supplementary Capital Estimate of £3m is required for the replacement of
the 20 waste fleet vehicles in 2014/15. The vehicles will be procured through
a framework agreement and the procurement exercise will commence in
November 2013.
Future capital investment requirements will be addressed as part of the
Council’s business planning process. (See Appendix 1: Programme Overview
for further information)
8.0 Legal Implications
8.1 These were explored in detail in the June 2013 cabinet report including a
commercially sensitive Part 2 paper. (Further information is provided in the
Appendix 1-5.)
9.0 Risk Management
9.1 For specific details of the risk management factors for each strand of the
programme please refer to the relevant Appendix to this report. (Further
information is provided in the Appendix 1-5.)
10.0 Background and Options
10.1 Please refer to the June 2013 Cabinet report which contained detail on the
background and options being considered. (Further information is provided in
the Appendix 1-5.)
11.0 Access to Information
The background papers relating to this report can be inspected by contacting
the report writer:
Name: Kevin Melling
Designation: Head of Environmental Protection & Enhancement
Tel No: 01270 686336 begin_of_the_skype_highlighting 01270 686336 FREE  end_of_the_skype_highlighting
Email: kevin.melling@cheshireeast.gov.uk
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