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Defra guide on squeezing waste contracts due in autumn

A guide on how councils can squeeze savings out of their waste contracts is to be published this autumn, as emails obtained by MRW about a similar pilot exercise reveal problems in “finding a joint direction”.

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The guide, which is part of the Government’s overall drive to take costs out of private finance initiative (PFI) contracts, will be based on a report drawn up by Defra officials. They have been helping Sheffield City Council to identify savings in its £26m public private partnership contract with Veolia.

Ben Prynn, an official co-ordinating the review, told MRW that the areas which can generate cost savings had been identified, but he was unable to divulge specifics because of commercial sensitivities.

“We have started to draft the document [guide for councils] and expect to be able to publish it in the autumn,” Prynn said. He added that all parties had “engaged positively”.

But emails between Defra and Sheffield officials obtained by MRW under the Freedom of Information Act indicate tensions - which may or may not remain unresolved.

One sent to Defra on 23 April 2012 said: “We know we are stuck in places and need to find a joint direction with Veolia to move forward.”

Another said: “Just a thought, not wanting to frighten Veolia off would you consider changing some of the language to maintain your bi-partisan position? Slide one “operational savings” could be partnership opportunities for example.”

After MRW revealed earlier this year that the exercise in Sheffield was taking place, waste firms warned that the complexity of waste PFI contracts would preclude “broad-brush savings”. They stressed that each contract had to be evaluated individually.

Veolia executive director Robert Hunt said that, despite the contract’s complexity, there were potential savings opportunities.

“Thus far, positive discussions have taken place with Sheffield City Council so as to ensure best value for the taxpayer,” he said.  

Sheffield head of waste management Gillian Charters said: “It is perhaps too early to pick out any specifics, but we have found the process to be a learning curve for us all. If other local authorities can benefit from our experience, that can only be a good thing.”

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