Dumfries And Galloway Council Paid £6.9m To End Waste Contract Early

A Freedom of Information (FOI) request by the BBC has revealed Dumfries and Galloway Council paid out almost £6.9m for the early termination of its waste contract with Shanks (now Renewi).

The council entered into the 25-year PFI contract for waste services in 2004 and an agreement was successfully reached to exit the contract in September last year (2018), following the announcement in March (2018).

It was announced at the time that the exit from this loss-making contract was on time and for the expected cost. 

Company accounts of Shanks Dumfries and Galloway show the council paid it a “termination sum” of £6,873,434, according to BBC News.

The FOI request sought to find out why it had cost the council more than £6m to end the deal when it had been Renewi that wanted it to conclude.

BBC News reported that the council initially refused to release the information, so the BBC brought an appeal to the Information Commissioner.

The council then released some details relating to the case on the agreement the BBC drop its appeal.

The council said the payment was contractual to compensate for the infrastructure put in place by Renewi in the instance of the contract ending early.

After the waste deal was terminated, a range of assets transferred to the local authority, including the Eco Deco plant in Dumfries, two transfer stations at Annan and Castle Douglas, eight recycling centres and five closed landfill sites.

Renewi had reported the contract to be loss-making, and the BBC FOI also sought to determine if the council expected to face similar losses. 

The council said work was ongoing to look at options for a “new model of delivery” and is likely to go before councillors later this year. A comparison will then be made of costs before and after the contract termination of the contract.

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