£2.7m budget pressure from new council-run Peterborough waste removal company - but authority will still save money
A new city council-run company to deliver waste removal services in Peterborough will cost the authority at least an extra £2.7 million than previously budgeted for, although the authority insists it will still benefit financially.
The council has created its own trading company called Peterborough Limited which will take over services run by Amey - including waste collection, street cleaning and maintenance of parks and grassed areas - from February 2 over a phased approach.
The council had signed a 23-year deal to outsource the services back in 2011 before deciding it could deliver better value for money itself and an improved service.
Budget proposals from the council have now revealed that transferring services from Amey to its new Local Authority Trading Company (LATCO) will cost the council £1 million more than previously anticipated in 2019/20, as well as £800,000 more the year after, and £940,000 the year after that.
However, the council’s chief financial officer Peter Carpenter insisted that despite the rising costs, the authority will still be saving £1 million a year compared to the deal it had with Amey.
All of Amey’s 449 staff will move over to the new company with services transferring over a few months, beginning with building cleaning.
Cllr Nick Sandford, leader of the council’s Liberal Democrat group, said: “When we terminated the Amey contract we said it would deliver hundreds of thousands of pounds of savings.
“It’s taken a two year period and we’ve had to spend half a million pounds of reserves.
“The LATCO will deliver control of services but not make the savings they promised.”
Green Party councillor Julie Howell said: “We welcome the incorporation of Peterborough Limited and hope it can be resourced sufficiently to clear up the legacy of the privatisation of the service.
“However, servicing of other authorities is a risk (this also goes for Highway Services) and the council cannot bank on this.”
Leader of the council’s Labour group Cllr Shaz Nawaz said the Conservatives were not properly funding the key areas which matter to residents.
He added: “We welcome the LATCO initiative. I hope it will be better than Amey although that can’t be hard. What residents want is a competent, caring and considerate administration which looks after the people of Peterborough.
“Fletton Quays won’t deliver the return we were promised. Again, a clear sign of the administration’s financial incompetence. Now the LATCO will cost £2.7 million extra. Yet at the outset they claimed their business plan was robust and pragmatic.
“That £2.7 million would have been better spent addressing the homelessness crisis, the endemic that is fly-tipping, funding local communities, etc. But instead they show their lack of financial acumen by getting the numbers wrong once again.”
The council announced it was cancelling the Amey contract in January 2017.
It then set aside £500,000 from its reserves for the switch from Amey to Peterborough Limited.
The council plans to use Peterborough Limited to compete in the private sector for contracts, for example with commercial waste, with profits reinvested in services.
Members of the public can have their say on the budget proposals by completing an online consultation questionnaire at www.peterborough.gov.uk/budget.
Hard copies of the budget proposals document and questionnaire will be available at Town Hall and Bayard Place receptions and in each of the city’s libraries by the formal launch of the consultation at 9am on Monday, January 28.
The consultation will close on March 4 at 5pm. The Cabinet will consider comments on Monday, February 25 and Full Council will debate the proposals on Wednesday, March 6.