Decision Maker: Cabinet

Outcome: Recommendations Approved

Is Key Decision?: Yes

Is Callable In?: No

Date of Decision: September 9, 2025

Purpose: Cabinet is recommended to approve an 8 year extension to the Neighbourhood Services Contract.    

Content: Cabinet:   (1)  agreed to the extension of the existing Environmental Services Contract for a further eight years from 30th September 2027 to 29 September 2035; as permitted under the terms of the original contract;   (2)  delegated the final negotiations of the contract extension to the Strategic Director of Neighbourhoods and Environment and the Strategic Director of Resources; and   (3)  agreed an increase in the annual budget of £1.6 million from 30th September 2027 to fund the contract extension.   Options & Alternatives Considered   Current contract duration and the ability to extend - the initial term of the Contract is for 8 years, with the ability to extend for up to a further 8 years. The duration of the extension(s) may range from 1 year to 8 years, subject to not exceeding the maximum possible contract length of 16 years.   Option A: do nothing. This option is not recommended as it would result in the Council not fulling its statutory obligations.  The services are currently delivered as part of one contract which will expire on 29th September 2027. The present contract includes statutory functions and services which the Authority has a duty to discharge.  Failure to do anything would expose the Authority to risk of either non-compliance with its statutory duties or by default having to provide the service directly.   Option B: This is the preferred option. Extend the current Environmental Services Contract with the existing provider FCC for 8 years. 8 years is the preferred period of time, this is based on the life span of a dustcart. Dustcarts are operationally viable and sound from new over a period of 8 years. This 8 year lifetime of vehicles is recognised within the contract.   Option C: Extend the current Environmental Services Contract with the existing provider for a period of less than 8 years. This option is not recommended. Negotiations have concluded that extending the contract by 8 years is the most advantageous both operationally (including because of the life of vehicles as set out above) and financially (as set out in Appendix 1).    Option D: Full procurement, including competitive dialogue. This will include procurement costs of between two to four hundred thousand pounds and the likelihood of an increase in the contract price of over 16%. There are currently five main companies who provide contracts of this size and nature (FCC, Veolia, Suez, Biffa and Serco). There is a risk to the Council, that a full procurement would most likely result in a higher price than the extension offer and the same provider remains. A new provider will also likely insist on introducing their own waste collection solution which would involve a large service change.  This could include changing days of collections again and a new collection model; which could lead to disruption for residents.   Option E: Bring the services in-house. This would lead to an increase in costs over the £1.6 million proposed in option B due to pension costs and the lack of skills and infrastructure to be able deliver a directly provided service.