To receive a briefing on the target operating model of the waste contract from Serco Officers.
Minutes:
The DFC introduced the item and informed Members that potential changes were being considered to delivery of the waste contract by Serco. The SRD reported that Serco had been delivering the waste contract for approximately eighteen months, and it was fair to say that not all promises had been delivered, with Covid-19 and Brexit provided as contributing factors. It was noted that Covid infections had resulted in many staff having to self-isolate, whilst Brexit had caused vehicle delays and more recently driver shortages, further exacerbated by difficulties training new staff throughout Covid. The SRD informed Members that initial consultation had included a proposal to move to a fifty-hour four-day week, and whilst initially supported, staff had not supported this in practice, which had impacted delivery of the target operating model (TOM). He added that further factors impacting contract delivery included a significant increase in tonnage of refuse collected, and a fall in commercial waste which further increased municipal waste. It was noted that garden waste collections and the tonnage collected had also risen significantly during the Pandemic, which had led Serco to re-evaluate its TOM. The SRD reported that Serco were in the final stages of consultation on a new TOM, that was expected to complete in late January. He then referred to the Council’s gap analysis, and suggested that time was needed to consider what aspects Serco could deliver moving forward.
Questions and Discussion
i. The Chairman stated that the gap analysis was helpful, but also a cause for concern with so many method statements unfulfilled as the contract approached its second anniversary.
ii. Cllr S Penfold referred to the staff consultations held to informed the redesign of the TOM, and asked who had been consulted. The SRD replied that consultees included the three Councils party to the contract, and the three Serco Teams for each District. He added that that a central team developed the initial plans, which would then be shared for comment with local teams and subject to their approval, with each local authority. It was noted that members of the public were not consulted on the proposals.
iii. Cllr V Holliday asked whether it was possible to quantify the level of underperformance attributable to Covid, in comparison to what had been overpromised in the original TOM. The RSD replied that whilst this would be useful, it was not possible at this time.
iv. Cllr N Housden referred to the annual service delivery plan, which included reference to risk analysis and contingency plans that had not been delivered, and stated that this was unacceptable for a contract of such complexity. The RSD replied that whilst he had not had time to work through the gap analysis in detail, he accepted that there would be several points considered to be unacceptable failures of the TOM.
v. Cllr A Brown referred to the contract bidding process and asked whether Serco had consulted with staff on the four-day week proposals. He then asked whether it would be possible to concentrate collections in confined areas. The RSD replied that consultation had taken place with Breckland staff who were supportive of the four-day week at the time of consultation. The SCM added that staff had approached management to suggest a shorter working week, however the reality of Covid and reduced opportunities for overtime had caused staff not to support the model. On concentrated collections, it was reported that the contract’s carbon footprint remained a key concern, and vehicle routes would be planned according to the closest tip locations to reduce vehicle mileage as much as possible.
vi. Cllr H Blathwayt noted the mitigating circumstances that had impacted delivery of the contract, and asked whether vaccine uptake amongst staff had been monitored to mitigate the impact of Covid. He then referred to recent fuel supply issues and noted the contractual obligation for a fuel depot, and asked whether an update on implementation was available. The SCM replied that vaccine uptake amongst staff was monitored, with 96% of staff double-vaccinated. She added that Serco had also provided an advisory service and time-off to facilitate vaccine uptake, with many staff now receiving a third dose. On the fuel depot, it was reported that the bunkered fuel tank had been purchased, though installation had been delayed as a result of a previous fuel spillage requiring additional planning permission. The SCM stated that the fuel tanks were expected to be operational from January 2022.
vii. Cllr P Heinrich raised concerns over the number of services undelivered, and asked what the priorities of Serco would be, how they would resolve the issues, and in what timescale. The SRD replied that the only timescale available at this stage would be for Serco to submit a proposal to the Council in mid-January that outlined a proposal for how the issues would be resolved.
viii. The DFC stated that whilst some priority issues had been addressed, focus remained on the delivery of core services throughout the Pandemic. He added that whilst waste collections had been paused elsewhere throughout Covid, this had not been the case in North Norfolk. It was noted that discussions were scheduled to take place in January to agree how outstanding elements of the contract would be delivered, and in what timescale. Cllr P Heinrich suggested that regular updates should be provided on the implementation of these outstanding elements.
ix. Cllr S Penfold referred to electric dustcart vehicles and asked whether there were any plans to transition to these in the future. The SCM replied that these vehicles were available and were in use on some contracts, however the technology was in its infancy for this size of vehicle. It was suggested that it may be possible to convert the Council’s existing vehicles to electric, in addition to the smaller electric vehicles already used. The DFC noted that electric dustcarts were being used in urban areas only due to their limited range, though the Council’s vehicles did have electric bin lifts to avoid increased diesel usage. He added that HVO vehicles would also be considered alongside other technologies in the future.
x. Cllr N Lloyd stated that added value items remained very important to the Council and was comforted to hear that Serco would work to implement as many as possible. He added that the contract transition had been seamless, and it was laudable that core services had continued throughout the Pandemic. It was suggested that Serco should provide annual data on the contract’s carbon emissions, so that improvements could be monitored. The SCM replied that a study had been commissioned to determine the contract’s carbon baseline, with ongoing monitoring in place to ensure improvements were made.
xi. Cllr L Withington sought clarification that the issues raised within the gap analysis were consistent across all three authorities. The DFC confirmed that the issues were broadly consistent across each authority, though some differences were evident as a result of existing services from previous contracts.
xii. Cllr N Housden asked whether electronic advertising would still be used on waste collection vehicles. The SRD replied that a decision was yet to be made on the LED panels, but would be confirmed in January. The DFC clarified that LED panels were only planned for two trade waste vehicles, with static panels used on other vehicles.
xiii. Cllr C Cushing referred to the gap analysis, and asked whether the Council had defined its priorities. The DFC replied that there were internal priorities, though there had to be some level of compromise between the three authorities that were party to the contract.
xiv. The Chairman suggested that it was important to maintain a constructive relationship for delivery of the contract, though it was clear that the Council was paying for significantly more than was being delivered. He added that confirmation of Serco’s willingness to resolve the issues with a specified timescale would be helpful. The SRD replied that following negotiation on the outstanding elements of the contract, he would return to update the Committee on delivery. It was agreed that it would be appropriate for Serco officers to return in April to provide an update on the second anniversary of contract.
xv. The Chairman proposed that in addition to a formal update in April, it would be helpful to receive verbal updates on progress from the DFC at the February and March meetings. Cllr P Heinrich seconded the proposals.
RESOLVED
1. To note the briefing
ACTIONS
1. To receive monthly verbal updates from the DFC on Serco’s progress implementing the waste contract target operating model.
2. To add a Serco Briefing to the Work Programme in April 2022 for a full update on the implementation of the waste contract target operating model.