The Department for Communities and Local Government (DCLG) announced it will not provide Norfolk County Council financial help in relation to the termination of The Willows energy from waste plant contract in Kings Lynn, after Norfolk County Council requested financial assistance in paying the circa £30m compensation for the cancelled contract.
Leader of the Council, George Nobbs, wrote to Prime Minister David Cameron and other government ministers last month to ask for financial assistance in relation to the cancellation costs of the contract, citing the inaction of the Secretary of State for Communities, Eric Pickles.
Norfolk County Council’s proposed Kings Lynn waste plant was ditched on the grounds of failure to secure satisfactory planning permission, after Pickles failed to reach a decision.
At the time, a statement from Norfolk County Council explained: “In August 2012 the planning application for the plant was called in for determination by the Government. Following a planning inquiry last year (2013), the Secretary of State for Communities and Local Government, Eric Pickles, said a decision would be made on or before 14 January 2014. No decision has been announced…”
The cost of terminating the contract is estimated to be £30.26m, comprising capped compensation to the project’s consortium – Cory Wheelabrator – of £20.3m, contractor public inquiry costs of £1.6m and exchange rate and interest rate related costs of £8.36m.
Yesterday (21 May) Cllr Nobbs was told by Baroness Stowell in a letter of response that no support will be given.
George Nobbs, Norfolk County Council – “I’m sure people will agree with me when I say I depreciate the rather dismissive comments made by Baroness Stowell about the efforts and judgement of my predecessor and his administration in relation to this contract”
In October 2013 Defra withdrew £169m worth of PFI credits from the project.
The council now says they are considering a proposal to sell The Willows site at Saddlebow to the Borough Council of King’s Lynn and West Norfolk
George Nobbs, Leader of Norfolk County Council, said: “This puts to bed once and for all the frequent and various suggestions from Henry Bellingham MP that the Government would help the County Council if it agreed to terminate The Willows’ contract.
“I’m sure people will agree with me when I say I depreciate the rather dismissive comments made by Baroness Stowell about the efforts and judgement of my predecessor and his administration in relation to this contract.”
In her letter Baroness Stowell states: “The details and clauses of any local procurement contract are a private matter between the relevant parties. It is for the local authority to assess the risks and benefits of any local contract prior to agreeing to it.
“Therefore any need to pay a cancellation penalty is a private contractual matter and is for the local authority to consider how to meet such costs.
Baroness Stowell – “It is not appropriate for national taxpayers to provide funding for penalty costs, should they arise, from locally-procured contracts”
“It is not appropriate for national taxpayers to provide funding for penalty costs, should they arise, from locally-procured contracts.”
The news comes as Norfolk County Council’s Cabinet met for the last time to discuss two recommendations made by Cabinet Scrutiny Committee.
The first recommendation was for Cabinet to review the necessary savings resulting from the termination of The Willows contract. Cabinet has recommended that a further report is drawn up by officers to address the full remaining deficit (£4.4m) facing the County Council.
The proposal to sell The Willows site at Saddlebow to the Borough Council of King’s Lynn and West Norfolk was discussed. Cabinet agreed it would not make a decision on the sale but a report will be presented to the new Environment, Development and Transport Committee and the Policy and Resources Committee to consider at the earliest opportunity.