Agenda item

·         Waste

·         Passenger Transport Unit

I) WASTE AND STREET SERVICES

 

Context:

 

To provide detailed draft proposals on the budget savings required to meet the gap between available resources and need to spend in 2016/17, for consultation purposes.

 

To consider the 2016/17 budget within the context of the 4 year Medium Term Financial Plan

 

That Select committee scrutinises the budget savings proposals for 2016/17 released for consultation purposes and provide their response by the 30th November 2015

 

The pressure is required to meet the increased expenditure in recycling and waste management for 2016/17 and is made up of several different components that are outside the control of Waste and Street Services.

 

          Key Issues:

 

MRF Costs – In 2012-13 the Council made a £350k saving with the introduction of a £0 MRF contract.  However since that time MRF capacity has been greatly reduced, new regulations have imposed burdens on the MRF sector and most of all the global economic downturn has had a very serious negative impact on commodity prices and therefore the value of recyclates.  Market testing has indicated that a cost for MRF reprocessing could be in the range of £35-55 per tonne.  MCC currently collects c.11,000 tonnes per annum.  It has been agreed with finance that a fee of £45p/t will be modelled introducing a pressure of £495k. 

Sustainable Environment Grant – in 2014-15 WG at the last minute changed the process and principles of this grant.  WG have indicated that they expect this grant to be used for wider purposes than just waste.  In the model a 10% reduction on this grant has been modelled - £191k.  However it must be noted that WG have indicated to other LAs that a cut of as much as 40-50% could be forthcoming in 2016-17.  This would be devastating for all LAs and for recycling and waste services.  If a 50% cut was forthcoming nearly £950k would be cut - a further £759k of the modelled reduction. 

 

Fleet & impact of route optimisation - The budget mandate was ambitious and unfortunately due to leases having been bought out in previous years the revenue saving from removing leasing costs could not be made.  The Council in effect has had that benefit in previous years.  The vehicle stock is now aging and an assessment by Transport is that 5 RCVs need to be replaced. In addition it has been acknowledged that the route optimisation project has placed too much stress on our workforce and therefore needs to be re-run and pressures reduced.  Therefore 1 further vehicle is needed to remove this pressure.  6 vehicles, lease cost of £25k = £150k.  8 posts were removed through the route optimisation process.  With the introduction of a new vehicle that needs to be manned – cost of a crew (driver + 2 loaders) = £71k.  Running costs of a vehicle (insurance, fuel etc.) = £26k. Total from pressure = £247k

 

Additional households/increases in waste & contract indexation.  – Waste production is linked to economic growth and number of households. Over last two to three years there has been a steady increase in both. The increase in waste tonnages and associated costs between 2013/14 and 2014/15 of 3000 tonnes were largely offset through the reductions in disposal costs and savings through the interim disposal contract with Cardiff Council and Viridor Trident Park (Prosiect Gwyrdd). Increases in waste streams have been assumed in the financial modelling and therefore overall contracted price.  There are also pressures based on the indexation mechanisms used in contracts (usually a formula linked to RPIx, fuel prices etc.).  Based on previous years 2.5% has been modelled.  Some of these costs are mitigated through the full introduction of Project Gwyrdd and the Welsh government gate fee support.  Pressure element of this is £189k.  Small pressures also exist in the premises budget with budget not enough to cover rates etc. and also expenditure is forecast to increase slightly on recycling bags etc.  This pressure element is £23k.  Total pressure = £212k

 

Total pressures £1.15mk. 

 

These costs are for 2016-17 only. Further pressures have been identified for 2017-2019 amounting to £580k.  This is mainly due to contract indexation (e.g. Project Gwyrdd will cost more in 2017-18 than 2016-17 as we will have had the benefit of a reduced fee and increasing waste), and increasing waste arisings. 

 

It is recognised that these are major pressures facing the service – amounting to £1.15mk in 2016-17.  Savings have been proposed such as a Van Ban at CA sites and a further increase in the garden waste charge to mitigate these impacts.  These are included in the savings mandates of the MTFP.  Also included in the MTFP are the income proposals for fees and charges.  These obviously will have a net benefit on the pressures. 

 

In addition the service is going through a comprehensive review of which the preliminary findings were reported to Cabinet in early 2015.  The review is to be concluded in the next few months with a report to Select Committee before Christmas and a final report Feb/Mar 2016.  The initial findings did demonstrate that savings could be made through a full switch to kerbside sort. However this is a major change for the authority and one that would need to be carefully considered in light of the public’s support for our current service and its high performance.  Work is ongoing to attempt to reduce the pressure and meetings are taking place with major contractors in coming weeks to try and identify solutions.

 

 

 

Member Scrutiny:

 

A Member commented that restructuring the crews did not offer the saving originally expected and asked what the cost was by not getting the saving and what the extra cost would be this year. It was answered that he Route Optimisation Mandate was due to offer a £250,00 saving, but actually provided a £125,00 saving.

 

It was asked if there would be an increased charge for garden waste, we were told by an Officer that the cost would rise from £12 to £14 per bag, this had been modelled into the pressure already.

In regard to garden waste it was asked if the charges completely covered the cost of collection and disposal of garden waste, the Member also commented that they had recently sat in on meetings where members of the public commented that they were willing to pay for services they used. It was answered that we cannot cover the cost of disposal, the laws states we can only charge for the collection of the material, the charge doesn’t fully subsidise the service. Because garden waste is currently collected with food waste we cannot completely disaggregate this waste. We were advised that currently 33% of householders are signed up to the garden waste charge.

A Member asked if there was a risk of people not taking up this service if charges were increased. And had the analysis had been done regarding the logistics of collecting from sporadic properties, would it be more use to drop the price to encourage more properties to use the service. An Officer responded that there had been an increase in subscriptions this year. A saving was produced by not collecting waste at the kerb side, the material that goes through the Civic Amenities site is not mixed with food and is therefore cheaper to dispose of.

A Member said that they would find it physically impossible to get to the C.A. sites and commented that the elderly rely on this service and that this service should not be abolished.

A Member commented that garden waste had only been collected for the last 10 years and wondered how we’d managed before. It was explained that looking at tonnage figures, it was previously going into residual waste which we did not want due to cost of disposal. Garden waste contributes 7 to 8% towards our recycling rate.

A Member stated that as members of Select Committees they were going down the route of devolving services downwards. There is an element of ‘use it or lose it’ and this means that we need to find some way of subsidising it from the public down.

It was asked by a Member how our costs compared with other local authorities. We were informed that we were the second cheapest in Wales after Newport. It was also advised that only 2 councils in Wales charge for green waste, Monmouthshire and Pembrokeshire.

A Member commented that due to the recent development in the county, there is a different social dynamic within the people living in the county and felt that green waste may be in greater demand.

It was asked if in future, when sourcing vehicles, it would be useful to look at vehicles with flexible use and low CO2 emissions. We were advised that as an authority we were constantly engaged with vehicle manufacturers and have regular demonstrations & trials of new models. All new vehicles have to comply with Euro 6 emissions standards.

 

Committee’s Conclusion:   Chair’s Summary:   Committee acknowledged that this is a volatile situation in terms of this particular pressure. Members are reassured that the Cabinet Member will take every action possible to manage the pressure.

 

 

 

 

 

 

II) PASSENGER TRANSPORT UNIT – SCHOOL TRANSPORT

 

 

Context:

 

Existing budgets do not reflect the current demands on all aspects of Passenger Transport Services. The requirement to provide transport to pupils within the County is increasing gradually yet budgets in this area are continuously having to make large savings. Making these savings has proved impossible over the last few years especially as decisions to provide some non-statutory transport have been made within other Directorates, with the onus then falling on Passenger Transport to provide and fund this.

 

          Key Issues:

 

The total pressure in relation to the Passenger Transport Unit is £641,000. This pressure is detailed as follows:

 

Mandate saving of £150,000 relating to SEN transportation. The budget was removed from Passenger Transport Unit allocation in 2013-14 via the MTFP process – This saving is not achievable as the responsibility for SEN transportation lies with the Children and Young Peoples Directorate and many pupils need singular transportation due to Risk Assessments undertaken.

 

New Welsh School, Duffryn – Overall additional cost approx. £311,000 over a six year period. The school is opening in September 2016 therefore 2016/17 additional cost will be approx. £25,000.

 

Increasing income budgets through the MTFP has not allowed for expenditure budgets to increase at the same level. To generate additional income you need to incorporate increases in additional expenditure which have not been reflected in the budgets previously. This has amounted to understated budgets of approx. £180,000

 

 

Member Scrutiny:

 

A Member asked if Raglan Maintenance Depot should be shut and if all sites could be amalgamated? In relation to fleet maintenance, we were told that at Pill Farm depot there is a small maintenance depot, with 2 fitters based there which is completely inadequate, a new site was being sought. Estates are currently looking at the depot portfolio at the moment to see if there is capacity to move and alternative uses for properties.

 

It was asked by a Member if all vehicles owned by the Council were in use, and if the Council were looking to move into public routes and private provision. It was answered that we are unlikely to move into the public routes because we would require a different license for running the fleet as money would be collected on the bus. We were advised that we already do a significant amount of work in the private sector. Obviously there are limits, as the buses are required to work within school hours, therefore weekend and evening work is being undertaken.

 

A Member asked if spending money on SEN transport would mean a compromise on other services and were effort undertaken to ensure SEN transport is used correctly. We were told that demands for SEN transport has been highlighted with colleagues in other departments and that meetings with CYP had taken place, with Members present. From a corporate level as an Authority we have to manage the cost, providing that Officers had accessed each case diligently.

 

It was asked if we ran Monmouthshire taxis. It was answered no, we have a range of vehicles on the fleet but we tend to use private sector taxis.

 

It was asked by a Member if it would be better for the Authority if we operated the transport unit as an ‘arm’s length’ operation as per Newport County Council, whereby the unit could charge various groups. The was answered that in future the Committee may receive reports regarding how they would wish to reorganise various departments under the Committee’s mandates. The Newport example is a wholly owned company of Newport County Council. The fundamental challenge is whether you can cut the unit cost of provision by putting it into another organisation.

 

 

Committee’s Conclusion:   Chair’s Summary:   A Difficult budget pressure. The Committee understands that regardless of where the budget for this sits, it is a priority for the Council and the cost implications associated with managing it need to sit with the Passenger Transport Unit for the present time. The Committee acknowledges the Cabinet Member is taking the necessary steps to manage this pressure going forward and Members will keep a watching brief on this issue.