Controversial Derbyshire waste site project stalls as councils clash over multi-million pound costs

Derbyshire County Council and Derby City Council originally awarded a contract in 2009 to Resource Recovery Solutions – which was a partnership between infrastructure firm Interserve and waste management company Renewi – to manage the councils’ residual waste as well as to design, build, commission, and operate a waste treatment facility in Sinfin, Derby.

However, the county council revealed, in July, 2023, that both authorites had agreed to pay a share of a total £93.5m out-of-court settlement to RRS’s waste management team’s administrators to resolve a dispute after the councils terminated a contract with the waste management team to manage the waste facility.

And in a further development, the county council has now announced that plans to finally fix and operate the temporarily closed Derby and Derbyshire waste treatment facility have been put on hold because the county and city councils are ‘formally in dispute over plans for the Sinfin New Waste Treatment Facility’.

The latest dispute arose after Derbyshire County Council issued an invoice to Derby City Council in January, 2024, for £93.9m plus VAT to recover its share of the project costs -which the city council disputes after both councils had originally decided in February, 2023, to fix and operate the waste treatment centre on Sinfin Lane, in Derby.

Derbyshire County Council confirmed the £93.9m plus VAT invoice is to recover the county council’s share of the costs of the waste site project and this is separate to the £93.5m settlement figure agreed for RRS’s administrators.

Derby City Council is disputing the validity of the invoice and it has triggered a ‘notice of dispute’ which includes the county’s refusal to formally include regular reviews of project progress against the business case to fix and operate the facility.

Both councils met on May 24 to try to resolve the latest dispute and agree terms, but the county council has confirmed they have been unable to do so and they will subsequently be entering the next stage of formal dispute resolution processes.

A Derbyshire County Council spokesperson had previously stated RRS had originally paid for the facility – which under the county and city councils’ original contract with RRS was to be designed, built and completed in 2017 to divert 190,000 tonnes of waste per year away from landfill.

But the county council added that, after RRS failed to pass commissioning tests by an agreed date, the authorities lawfully terminated the contract in August, 2019, and the councils and RRS began a process to determine the Adjusted Estimated Fair Value compensation of the contract to be awarded to either RRS or the councils.

Both councils resolved in July, 2023, to accept an out-of-court settlement arrangement and pay RRS £93.5m to protect council tax-payers from the risk of further significant costs after RSS’s administrators had originally claimed they were owed £187m, according to the county council.

The county council had stated this total settlement sum of £93.5m had been shared by the councils in accordance with an agreed split with £36.57m paid by the city council and £56.93m paid by the county council.

Derbyshire County Council also said at the time finances were earmarked as part of Derby City Council’s Medium-Term Finance Planning process for 2023-2024, and Derbyshire County Council had earmarked reserves to cover the settlement costs.

The county council has stressed the £93.5m settlement payout is a separate figure from the £93.9m plus VAT invoice figure and it is the validity of this invoice that is currently being disputed by the city council.

Both councils have been asked what effects the on-going temporary closure of the waste site is having for the councils, the county and Derby in terms of costs, lost income, expense and the need to fulfil environmental waste disposal commitments,

However, a Derby City Council spokesman said the councils are unable to respond to further questions on the matter.

Campaigners and residents have previously complained that the Sinfin waste site will pose a threat to air quality.

The county council has already been addressing a number of saving proposals outlined to meet an estimated budget deficit of over £39m for the 2024-25 financial year.

Derby City Council has also had to compile its own, stringent budget plan to help save more than £8 million over the same financial year.

The county council has stated that like many authorities it has been struggling due to reduced Government funding, the financial impact from the Covid-19 pandemic, high inflation rates, rising costs, the cost of living crisis, and a growing demand on services.