The decision to bring the services in-house was formally taken at a cabinet meeting on 31 October 2018 (see letsrecycle.com story).
A Tower Hamlets spokesperson told letsrecycle.com: “Extensive preparations are underway to deliver a smooth transition from Veolia.
“We are in the process of purchasing a new fleet, reviewing our processes and procedures, improving the staff accommodation at the depot and engaging with our teams and the unions.”
At the cabinet meeting in October 2018 it was estimated the in-house service would require capital investment of approximately £10 million to purchase a new fleet of vehicles, as the current fleet was said to be coming to the end of its useful life.
Reasoning
The contract between Tower Hamlets and Veolia began in 2006 and covers waste and recycling and street cleaning services.
The spokesperson said: “Bringing these functions in-house will give us greater control and flexibility.
“It will allow us to effectively respond to the challenge of serving a rapidly increasing population while ensuring value for money for our residents.”
MRF
Tower Hamlet’s current MRF sorting contract will also come to an end on 31 March 2020, and a new contract has yet to be awarded.
The contract is separate to the main Veolia contract and is subject to a separate procurement process. Historically the council has procured short term MRF contracts, generally for two years with the option of a further year.
However, with the establishment of in-house waste and recycling collection services it is now looking to enter into a longer contract to provide cost and operational certainty for a longer period.
The new contract will be for three years with the option to extend by up to a further three years.
If the whole six years is seen out it will be worth £7.96 million, the local authority has estimated.
Costs
The original report proposing the move in-house included funding of £2.5 million for the creation of a so-called ‘mobilisation’ team. It also said a £750,000 capital investment was required for new IT systems.
Overall, the report said the move would cost £18.7 million to provide refuse, recycling and cleansing services, with £8.2 million going towards refuse and recycling.
Strategy
The new service plans come as the boroughs works towards delivering on its waste management strategy which was approved at a cabinet meeting in February this year.
With the council targeting a 35% recycling target by 2022, it said in a report shared at the meeting: “The waste strategy is fundamental to informing and supporting the design and mobilisation of the new in-house waste services.”
The report said the in-house service would contribute to the council’s sustainability agenda by ensuring the new fleet met the latest emissions limits specifications.
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