Javelin Park Incinerator - David Drew MP calls for inquiry after costs predicted to rise by £100m
Now that we are finally able to see the contract for Gloucestershire’s incinerator, it’s clear that it will cost at least £102 million more than the £500 million expected when negotiations began five years ago. The true costs have only been revealed after a long-running campaign.
So I was pleased to add my name to a cross-party letter calling for an independent inquiry into this ‘white elephant’ which is an economic and environmental disaster.
I will be calling for a parliamentary debate on Javelin Park incinerator and the process which has led us to this point. I remain opposed to incineration as a way of dealing with our waste. It is clear there are much cheaper, greener and safer options.
This is the full text of our joint letter:
Documents released by GCC just before Christmas reveal for the first time that the lifetime cost of the Javelin Park Incinerator is set to top £600m, after the Cabinet secretly agreed to a 30% increases in costs when renegotiating the contract in 2015/16.
The project, which was originally forecast to save the Council £1.2m over it's first three years is now set to cost at least £800,000 more than the alternatives over the same period: robbing the budget of resources needed to pay for schools, social care and environmental improvement. We, the undersigned, call upon the Chief Executive of Gloucestershire County Council to immediately establish an independent inquiry into the award and structure of the Javelin Park Incinerator Contract.
We note with grave concern that recently released documents show that:
The headline cost of this project rose to over £600m between 2013 and 2016, with base tonnage gate fees rising by 30%, whilst the Council’s public descriptions of the project continued to cite a £500m project. This is a clear case of misleading the public.
Contract renegotiation took place without any competitive pressure. Although reports to Cabinet stated the authority was having success negotiating down the increased capital price put forward by UBB of £177m (up from £137.4m), the final signed figure was even higher at £178.9m. We need to know how a 30 per cent increase in the largest contract the Council has ever signed could justifiably be accepted without informing the full Council.
An option for prudential borrowing to fund the project that could have brought substantial savings was not brought forward for consideration. We need to know why a potentially cheaper route to construction of the Energy from Waste plant was ignored in place of a private funded option, that bring higher interest fees and overall costs.
In November 2015, Cabinet were informed that the maximum saving excluding the saving from not paying cancellation costs was £93m, yet savings claims of £150m and £100m over the lifetime of the project have consistently been used in public. We need to know where the decision was made to provide misleading figures, and who decided not to provide the accurate information that was requested during multiple scrutiny processes.
The contract structure revealed in these documents means that a low average gate fee can only be achieved with high waste flows: leaving substantial risk on the Council that it will pay an effective gate fee far above market rates, and that the ability of future administrations to reduce waste volumes and promote recycling will be severely restricted. We need a clear public model of this contract to allow open discussion of waste reduction strategies in light of its financial structure.
The Council has delayed publication of important environmental information found in the Ernst and Young report in order to commission an additional report from Ernst and Young that seeks to provide justifications for the project. We need a clear account of how decisions to withhold information were made, and whether these were consistent with the obligations on the Council under Freedom of Information and Environmental Information Regulations.
We also note that by withdrawing the appeal against the Information Commissioner’s rulings on disclosure of documents, Gloucestershire County Council have never proven that commercial confidentiality prevented the earlier disclosure of these documents. Taken together, these points illustrate major failings in the provision of clear and accurate information to support public and Council scrutiny of this major project: with substantial financial and environmental consequences for the Council, and the residents of Gloucestershire.
We believe the only way to fully address outstanding questions about this project, to ensure Councilors and other stakeholders have the information they need to plan for the future, and to rebuild trust in the Council’s handling of major projects, is to have an entirely independent inquiry.
The Terms of Reference for this inquiry must cover:
Whether the contract signed constitutes Value for Money;
Whether Cabinet and Councillors were adequately and accurately informed of all material facts that would affect their decisions in relation to the project, including, but not limited to, the November 2015 Cabinet Decision to authorise a revised Javelin Park contract without revealing the new contract was 30% more expensive than the prior contract, nor that options for prudential borrowing could have substantially reduced the lifetime cost of the project and the effective gate fees;
Whether the structure of the current contract is in line with Council objectives to reduce waste, and whether the structure adequately protects the authority from the risk of higher-than-average gate fees in events including (a) waste flows falling below the forecast scenario; and/or (b) the electricity upside of the project generating less income or saving than anticipated;
Whether public resources have been used correctly and prudently in fighting a legal battle against the disclosure of key contract related documents, and in commissioning Ernst and Young to produce an additional report in December 2018 to provide justification for the project;
Any changes that should be made to procedures, processes and rules at the Council to ensure full transparency and effective scrutiny of future contract negotiations.
We note that the Council’s current auditors, Grant Thornton, were responsible for the financial models used by UBB in the development of this project, and as such have a clear conflict of interest when it comes to assessing this project. We therefore specifically note that neither Ernst and Young, nor Grant Thornton, should be directly involved in order to protect the independence and integrity of an inquiry.
David Drew MP, Member of Parliament for Stroud
Cllr Rachel Smith, Green Group Leader, Gloucestershire County Council
Cllr Paul Hodgkinson, Leader of Gloucestershire Liberal Democrats
Cllr Lesley Williams MBE, County Councillor for Stonehouse
Dr Simon Pickering, Chair of Environment Committee, Stroud District Council
Dr Fran Boait, Labour Parliamentary Candidate for Gloucester
Cllr Jeremy Hilton, Gloucestershire Liberal Democrats’ Spokesperson for Waste
Cllr Martin Whiteside, Green Group Leader, Stroud District Council
Cllr Eva Ward, County Councillor for Stroud Central
Tim Davies, Local Campaigner