An internal audit should be carried out due to the cost of Denbighshire’s new recycling depot spiralling by millions of pounds, says a concerned councillor.
At a cabinet meeting on Tuesday, April 12, cabinet members unanimously agreed to rubber-stamp a business case for the new recycling depot, which included an additional £1.58m of Welsh Government funding.
The new recycling depot at the Colomendy Industrial Estate in Denbigh is currently in phase-one of construction and is being developed in collaboration with four local businesses. The previous landowner wanted to sell the land as a whole, so the council and the businesses purchased the plot together.
The total cost of the project is now more than £19m.
But a council report says rising construction costs, such as the price of steel, caused by COVID and the war in Ukraine, means the £2m contingency planned for the project was not enough.
Consequently, Denbighshire County Council applied for an additional £1.58m from Welsh Government.
The new depot is set to be operational by the autumn of 2023 as Denbighshire launches its remodelled recycling service.
Cllr Barry Mellor said: “I cannot get my head around these costs – £2m contingency money already gone. It’s staggering to find where you can get £2m contingency from in the first place.
“Then we go to Welsh Government and ask for another £1.58m. Yes, we know costs are going up, but also costs have got to be controlled; otherwise, you’re not in any business. The funding table in the report gives all the funding there, which shows the £1.58m. It doesn’t show the £2m contingency costs.
“I wonder why that is not in the funding table. The total cost of this is £19,337.142, a staggering amount, and I would like to see an internal audit come in and look at this business case from start to finish because the costing is getting out of control.”
Cllr Brian Jones is the lead member for waste, transport, and the environment.
“The information has been transparent all the way through the project,” he said.
“If you track back, it might be a lot of reading, but it is all there. It is no big surprise. If you’ve kept up to date with what’s been happening with the project, you can see where the costs have gone. This project started off as a little project. Now it’s grown into a big economic development project with jobs, local companies being able to stay in the Colomendy area, etc, etc. As far as the costs and where it is gone, it is detailed there. It is there if you look.”
He added: “If it’s not in that report pack, it’ll be in the previous report pack about where all the extra costs have been coming from as we’ve gone through the timeline to the project today.”
Tony Ward is the head of highways and the environment at Denbighshire and added: “There’s been a lot of scrutiny around the financial elements of the project already. Our own finance team have also done an in-depth piece of work recently, to look at the costs of the project and to look at the revenue model, to make sure the conclusions we’ve come to are reasonable.
“I’ve got no issue with internal audit looking at any project I’m involved with or any aspect of my service.
“A project like this does require a significant contingency. Even in a normal situation, it would be strange for a project of this scale and complexity not to have a significant contingency attached to it. At the moment, we are not in a normal situation, so it’s really not surprising that that contingency has been needed and that actually we had to ask Welsh Government for additional funding in order to deliver the project.”
In a separate decision, cabinet members also unanimously agreed to give the contract to a preferred supplier of its waste fleet vehicles at a cost of £2,712,231. The Welsh Government will supply £495,000 of the cost.
The cabinet also agreed to delegate a decision to the chief executive to award a contract to ‘the successful tenderer’ for its waste transfer centre once its tender process was complete. The contract is estimated to be worth £5.25m-£5.45m.
Denbighshire’s older depots at Ruthin and Bodelwydden are expected to continue when the new depot opens, and the new site is expected to create approximately 50 new jobs. The remodelled recycling service is also set to include:
- A new weekly collection for recyclables such as paper, glass, cans, and plastic
- A weekly collection for food waste
- A new fortnightly collection for clothes and small electrical items
- And a collection of non-recyclable waste every four weeks, but with larger bins.
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