Decision Maker:

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: Yes

Date of Decision: February 25, 2025

Purpose:

Content: RESOLVED:   1.    That Cabinet approves a procurement exercise for a new Materials Recycling Facility (“MRF”) initiating support from legal, financial and technical advisors, including developing the Full Business Case for the facility.  2.    That Cabinet approves any legal agreements that are required to secure planning permission, approval is sought for the same, subject to the oversight of any such agreement by the Director of Law and Governance. 3.    That Cabinet delegates authority to the Interim Executive Director for Environment, Property and Growth Place, in consultation with the Cabinet Member for Property, Infrastructure and Waste and the Executive Director for Resources to approve the finalised Procurement Strategy and commence the procurement exercise once the planning application for the MRF has been approved. Reasons for Decisions:   1.    In 2023, the Resources and Circular Economy Team (“RCE”) had a Strategic Waste Infrastructure Plan approved by Cabinet. This plan highlighted the lack of dry mixed recycling (“DMR”) treatment infrastructure available locally and noted the strain on the existing infrastructure. Since then, the team has been working on the recommendations within that report. 2.    Surrey County Council’s (“SCC”) current waste infrastructure capacity is under significant pressure. Use of third-party sites to manage and separate recyclable materials collected by the District and Boroughs on SCC’s behalf has shown to be increasingly expensive and the service has no control over costs or the separation processes (Appendix 1). 3.    Imminent waste legislative changes will dramatically alter the risk profile of SCC (as the Waste Disposal Authority (“WDA”)) and requires whole system thinking. The changes will result in SCC’s infrastructure capacity coming under greater pressure as will third-party Materials Recycling Facilities (“MRF”) which will further increase potential SCC costs. Liability for additional costs will fall to SCC, of which SCC would have no control. SCC will need greater control over its supply chain and associated infrastructure.   4.    SCC are proposing the development of a MRF on SCC owned land at Trumps Farm, Chertsey. An outline planning permission application has been submitted and an Outline Business Case (“OBC”), presented herein has been developed. Determination is anticipated for May 2025. 5.    The OBC outlined the key drivers for the development, which are:  a.    Legislative changes in the waste sector will dramatically alter the risk profile of SCC as the WDA. The amount and type of recycling materials collected will both increase and change over time.   b.    The need to be able to adapt and respond accordingly to this changing legislation.?  c.     The need to build resilience and self-sufficiency within SCC’s waste infrastructure network.?  d.    Limited infrastructure capacity within the existing SCC network and the region as detailed in Strategic Waste Infrastructure Plan (Cabinet April 2023)1.?  e.    Budgetary pressures and the need to extract greater value for money from our services.?  f.      The need for whole system and frictionless working with the District and Borough (“D&B”) Waste Collection Authorities (“WCA”) to drive efficiencies and improve performance.?  g.    Reducing the carbon impact of the service, by managing Surrey’s dry recycling where is its generated, rather than sending it to treatment outlets across the country.  6.    Supported by pre-market engagement SCC proposes the development of a MRF that will: a.    process all dry recycling SCC is currently responsible for (c.90,000 tonnes), with the ability to take additional districts’ material; b.    not require any changes to the current District and Borough collection regimes, unless stipulated by legislative changes; c.     use greater technological processes, including Artificial Intelligence (AI) to increase the quality of material and recycle more, as well as futureproofing the facility by giving it greater flexibility in its operations; d.    likely seek a Design, Build, Finance, Operate, (DBFO) and Collaborate/Partner delivery mechanism, to provide SCC with the control needed to mitigate the changing waste landscape. Interface risks will be the responsibility of the supplier;   e.    reduce SCC’s revenue costs as compared to the third-party offtake contracts. f.      be coterminous and available from the end date of the existing contracts. 7.    A full procurement strategy will be developed once approval to go ahead with the project has been granted. This will be supported by further market engagement including interviews with interested parties to ensure a full understanding of what the market can offer. Delegation is requested to approve this strategy prior to commencing the procurement exercise. 8.    Therefore, the recommendation to Members is to approve the procurement exercise for a Surrey MRF, including the development of the Full Business Case (“FBC”). 9.    Further, it is important for SCC, to secure planning permission as soon as possible to inform the costs and liability consequences to be assessed in the FBC and as such Cabinet is asked to approve SCC entering into any legal agreement which may be needed to secure that permission subject to oversight by the Director of Law and Governance. 10.  Following completion of the procurement exercise, the Full Business Case will be required to return to Cabinet, for a decision to progress the project further. (The decisions on this item can be called-in by the Communities, Environment and Highways Select Committee)