Contractor Amey faces a bill of almost £300,000 in a dispute with a council which has claimed the company lost 2,000 tonnes of recyclable materials.
Gloucester City Council’s overview and scrutiny committee heard that officers thought Amey had lost £50,000 [during 2017-18] by selling recyclables too cheaply and a further £247,000 by losing materials that could have been sold. Amey has rejected this.
A report to councillors also noted the council and Amey had agreed on a ’worst case scenario’ of income of £699,000 for the last financial year but only £446,000 was raised.
This gap pushed the council’s environment operation from an expected surplus into deficit.
Cabinet member for environment Richard Cook told MRW the calculation for lost material came from comparing figures supplied by Amey for how much it had collected and the tonnage sold.
He said: “About £50,000 is materials sold at below the prices you would expect; the rest is lost material.
“I have asked council officers to pursue withholding that amount from the next invoice payment to the supplier Amey, and that has been agreed by cabinet. That will trigger a dispute resolution mechanism.”
Cook said Gloucester could not easily get out of the contract, which runs until 2022, because “like most public contracts, it can end early only if someone breaches it, and if the council did we would risk ending up in court and costing millions if we lost, which I cannot risk”.
He said Amey had told the council it did not accept the figures that showed the lost materials and had since supplied different data: “But when you are given one set of figures and then some different ones it does not help.”
An Amey statement said: “We are aware of Gloucester City Council’s concerns about recycling income for 2017-18. We have discussed the issue with them and provided a full written response to every issue raised. We can account for the recycled material and have records to support this.
“It is unfortunate that the global market for the sale of recovered materials has recently been affected by restrictions imposed on the export market. The price of recycled waste, which can be achieved by the council, has consequently decreased.
“We always aim to deliver a high-quality and cost-effective service for Gloucester and its residents, and work hard to ensure we are meeting our contractual commitments.”