The Council misses the chance to save millions of pounds by re-negotiating the waste contract

At yesterday’s Budget Consultation meeting we heard Council leaders trying to justify the cuts they are making in public services, cuts which they admit will hit the most vulnerable hardest.

Today we learn that Birmingham City Council has failed to renegotiate the multi-million pound waste contract with Veolia – or get a cheaper deal by transferring it to another company. The explanation, admitted by Councillors Ward and Mahmood, is incompetent management by the Council. The result is a missed opportunity to save perhaps millions of pounds which could have been spent to save services now being cut.

Here is the report in today’s Local Government Chronicle newsletter.

Birmingham ‘ran out of time’ to re-procure waste contract


Birmingham City Council has faced heavy criticism for extending its existing waste contract with Veolia because it “ran out of time” rather than re-procure, LGC’s sister title Materials Recycling World reports.

The 25-year contract, which began in 1993, was due to expire on 16 January next year but the council extended the contract by two years to give itself more time to go through the procurement process.

However, the council subsequently discovered a number of essential works that needed to be completed so it could meet its obligations to manage waste disposal and reduce landfilling.

Negotiations between Veolia and the council concluded that it would not be possible for the waste firm to carry out all of these essential works during the additional two-year time frame and so the council has extended it to five years.

The decision, presented with a report, discussed at a council cabinet meeting last week attracted scathing criticism.

Councillor Rob Alden (Con) said: “It is a truly astonishing situation to have a cabinet member say that we cannot consider a procurement of a full contract because there isn’t enough time.

“It’s truly astonishing because this contract length was 9,131 days. It’s truly astonishing because this report has come 36 days before the end of that contract. It’s truly a mess.”

Cllr Alden also highlighted other council reports which seemed to suggest that, within the contract, there was an agreement that equipment should be returned at the end in working use – not delaying procurement.

He was also concerned about the “secrecy around the financial implications” of the extended agreement with Veolia. The financial implications of the interim arrangement agreement have not been made public because the council argued they are commercially sensitive, but they have been outlined in a separate private report.

Cllr Alden added: “Big savings have been included in public budget documents related to this contract being delivered on time.”

Council leader Ian Ward (Lab) said: “This local authority for many, many years has had a problem with re-procuring contracts.

“Time and time again, going back as long as I can remember, we have had to have project extensions or procurement extensions because the council has not dealt with it in a timely fashion.”

Waste and recycling cabinet member Majid Mahmood (Lab) said there had been “inconsistent officer leadership” around the reprocurement, due to three people leaving the council. He said in line with standard practice, procurement should have started two-thirds of the way through the contract.

Veolia declined to comment.

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