The Director of Technical Services reported that the Environmental Streetscene Services contract with Biffa had now been in operation for over two years and he provided details of those matters related to the contract which had financial implications. Since the inception of the contract a budgetary shortfall relating to inflationary uplifts to the contract sum together with the effect of additional properties coming on-stream had arisen in the sum of £311,000, which had been accommodated mainly through increased recycling activity. In addition a re-engineering of the contract had allowed a permanent saving of £150,000 to be achieved. He reported that the contract was still fully funded and the variations identified had resulted in a contract sum of £11,417,400 at 1 April 2009.

However, further annual costs of £285,300 as well as the annual property count increase in the region of £25,000 were likely to arise in the near future. The Director indicated that through maximising recycling credits and further re-engineering of the contract he may be able to contribute £100,000 although it was unlikely that he would be able to fully fund the increased requirements.

Resolved –

(1)  That the permanent increased costs of £185,300 applicable from 2009-2010 as detailed in section 6.1 of the report now submitted, be noted.

(2)  That Cabinet notes the proposed inclusion in the Technical Services budget the effect of the contractual Property Count Uplift on an annual basis throughout the remaining life of the contract and commencing from August 2009.

(3)  That the Director of Technical Services to instructed to report the outcome of the Environmental Streetscene Contract Value Engineering exercise to Cabinet in Autumn 2009 to enable any necessary growth in revenue budget to be approved.