Norfolk incinerator latest: No help from government to pay £33.7m compensation costs

The proposed incinerator site at Saddlebow. Picture: Ian Burt. The proposed incinerator site at Saddlebow. Picture: Ian Burt.

Wednesday, May 21, 2014
5:16 PM

Norfolk County Council will get no government help to pay the multi-million pound compensation costs created by axing the controversial incinerator contract, it has been announced.

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George Nobbs, Labour leader at County Hall had written to prime minister David Cameron, chancellor George Osborne and business secretary Vince Cable asking for a helping hand.

The council last month voted to pull the plug on a contract with Cory Wheelabrator to build and run the £610m plant at Saddlebow in King’s Lynn, after officers said a delay in a decision from communities secretary Eric Pickles on whether it could go ahead meant it no longer offered value for money.

The decision to scrap it left the council facing a £33.7m bill, including £20m in compensation to Cory Wheelabrator, contractor public inquiry costs of £1.6m and exchange rate and interest rate related costs of £11.86m.

On top of that, £5m had already been spent to procure the contract and buy the site.

But Mr Nobbs today received a letter from the Department for Communities and Local Government making clear no help would be forthcoming.

In her letter, Baroness Stowell, parliamentary under secretary states: “In relation to your point on financial assistance for penalty clauses in cancelled procurement contracts, I would simply observe that it seems that your local authority, in this instance, decided to sign a contract with a penalty clause exposing the local authority to a financial risk, costing £30m, on an issue which was not predetermined and which is subject to a quasi-judicial process.

“The details and clauses of any local procurement contract are a private matter between the relevant parties. It is for the local authority to assess the risks and benefits of any local contract prior to agreeing to it.

“Therefore any need to pay a cancellation penalty is a private contractual matter and is for the local authority to consider how to meet such costs.

“It is not appropriate for national taxpayers to provide funding for penalty costs, should they arise, from locally-procured contracts.”

Last year, the Department for Environment, Food and Rural Affairs withdrew waste credits which would have been worth £169m over the lifetime of the proposed plant.

Mr Nobbs said: “This puts to bed once and and for all the frequent and various suggestions from Henry Bellingham MP that the government would help the county council if it agreed to terminate the contract.

“I’m sure people will agree with me when I say I depreciate the rather dismissive comments made by Baroness Stowell about the efforts and judgement of my predecessor and his administration in relation to this contract.”

Earlier today, council leaders postponed a decision on whether to sell the site where the incinerator was due to be built.

And whether to go ahead with a proposal to snatch second homes cash back from district councils will also be left to another day.

Under proposals put forward before the potential compensation costs for axing the proposed Saddlebow incinerator went up by £3.4m, two options were put forward to help pay the bill.

One option would take £900,000 from highways maintenance and spend £140,000 less on library books.

The other would make up the missing £1m or so from about half of the money from council tax on second homes which the county council currently gives to district councils.

But a call-in by west Norfolk county councillors John Dobson, Brian Long and Jason Law criticised the officers’ recommendations as “ill-thought through”.

Scrutiny councillors recommended that cabinet review the proposed service cuts with a view to finding the savings elsewhere, in line with Mr Dobson’s proposal.

But at a meeting today, the controlling Labour/Liberal Democrat cabinet decided to ask officers to draw up a further report on how the missing money might be found.

That report will come before the full council at the annual meeting on Tuesday.

A separate proposal from Cabinet scrutiny, that the county council should offer to sell the Willows site at Saddlebow to West Norfolk Borough Council, subject to valuation by the District Valuer, was also pushed further down the line.

The cabinet agreed that any sale should be a matter for the new committees which will be formed after Tuesdays’s meeting.

But officers said the council could not just sell the site to West Norfolk Council and would have to follow due process to get the best possible deal for taxpayers.

And they said the site could still be needed for an alternative way to deal with the county’s waste.

41 comments

  • Cory Wheelabrator had been aware their over inflated compensation payment has had a detrimental effect on services even scare stories a few months ago quoted in the region of £100 million from their councillor friends supporting an incinerator. They could have substantially reduced the payment to prove to residents of Norfolk they have compassion and not rip off merchants. They had the opportunity to come up smelling roses and the public may have seen them in a different light. You never know if they may have been invited as the preferred bidder for other waste treatment technologies.

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    Alan Allan

    Wednesday, May 28, 2014

  • "In the event of the Sec of States decision to grant consent". "if this firm gets permission they will build". See Perc. even you're not convinced really.

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    disolushund

    Tuesday, May 27, 2014

  • Who cares who does what but if this firm gets permission they will build and they will accept new contracts. Why do the campaigners bury their heads? They have already made a public announcement that they intend to carry on and build the incinerator and they will. All that fuss before was just about one contract. It was not the scrapping of the entire project as the papers seemed to think. Pink pigs indeed.

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    Percy Cuted

    Sunday, May 25, 2014

  • Percy. Surrounding counties are desperate to burn Norfolk’s waste as they are close to paying mega penalty clauses to their mega rich incinerator companies and that was before they were built. Last year Defra could not see the benefit of building a burner in Norfolk when year on year recycling rates are increasing nationwide. September most districts will have glass collected from the kerbside and next year most plastics following an EU directive to recycle these products. Incinerators companies need glass and plastics to keep bottom ash in solid state to stop airborne pollution and renders it useless for sale to contractors.

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    Interpol

    Sunday, May 25, 2014

  • Oh!! There they are again!

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    disolushund

    Sunday, May 25, 2014

  • In the event of the Sec of States decision to grant consent to build an incinerator the Council has been looking at a new draft of contract. It seems that the little campaigners missed that as well. probably too busy looking for pink pigs.

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    Percy Cuted

    Sunday, May 25, 2014

  • Anyone else see that flight of pink pigs this morning?

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    disolushund

    Sunday, May 25, 2014

  • Small point but the contract was cancelled and so old signatures do not amount to a pile of beans now. What might be of interest are the signatures on the new contract when the incinerator begins to be built in the summer.

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    Percy Cuted

    Saturday, May 24, 2014

  • Canary Boy, thank you. I tried to post earlier but fell foul of the archant censorship. Anybody make head nor tail of their criteria? I still cannot understand any public body committing the taxpayer to such a great financial loss. It seems to be a profitable business not building for councils. The whole thing stinks worse than any incinerator. Does the council understand that they are dealing with real money?

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    norman hall

    Saturday, May 24, 2014

  • Honest John, it may be so. However, it only takes one authorised witness to attest the affixing of the NCC common seal and the only copy signature that I have seen purported to be that of Joel Hull. The circumstances are as Canary Boy described them. Additionally, I suspect that David White would have done all possible to avoid being linked with the execution of the contract.

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    John Martin

    Saturday, May 24, 2014

  • David White's signature is also on the contract

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    Honest John

    Saturday, May 24, 2014

  • May I follow up on Canary Boy's comment? The NCC Cabinet, by its resolutions on 7 March 2011, delegated authority to the head of Environment Transport and Development, acting in consultation with the holders of two identified Cabinet portfolios, to enter into the contract at the appropriate moment. At the point at which contracts were exchanged, the relevant individuals were Mr Mike Jackson and Cllrs Derrick Murphy and Bill Borrett. They, if you like, together pulled the trigger. Joel Hull was merely the firing pin. But should they have done it when there was every chance of a call-in of the planning application, with the resulting programme delay giving Defra a legitimate chance to reconsider the award of £169m in waste infrastructure credits? This is one for Mr Stephen Revell to ponder on.

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    John Martin

    Saturday, May 24, 2014

  • Thanks Canary Boy. At least I know the guilty ones. In case such as this I do wonder at the common sense of those elected and supposedly taking care of our interests. If I were a cynic ,I might suspect as to whether some skullduggery took place.

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    norman hall

    Saturday, May 24, 2014

  • Norman the NCC seal was taken to London by Joel Hull on the authr.isation of the cabinet. The seal and Hulls signature are on the contract from what I understand.

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    Canary Boy

    Friday, May 23, 2014

  • I am still totally befuddled as to why tax payers money, a very large amount of money,is being paid to a private company NOT to build something. Can anybody throw some light on who signed such a contract and who gave them the right. A contract is a written document. Therefore ,signatures must be visible. Who and where are the participents?

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    norman hall

    Friday, May 23, 2014

  • The Kentucky Kid has been pulled to one side and reminded of something. Allowances increase with responsibilities. A very nice responsibility allowance could be going someone’s way providing he can learn to stay quiet and stop pretending to support something he does not.

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    Dickens

    Friday, May 23, 2014

  • What's the difference between a Lego model and a Norfolk County Council Leader? - - - - One is a glueless kit......

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    Norfolk and Good

    Thursday, May 22, 2014

  • Political porkies from Bellingham. No change there.

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    Del Boy

    Thursday, May 22, 2014

  • Maybe now people realise that there is no difference between the politcal oligarch party's. Baroness Stowell was right to point out that this officerTory councillorlawyer self inflicted injury should be sorted here in Norfolk. For UKIP to support such bad practise by forcing a change in coalitions this week, will mean that they will be subsumed by the Tories. When did UKIP have a mandate for this sort of horse tradingt which will only give them a bad name at next years GE.

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    ingo wagenknecht

    Thursday, May 22, 2014

  • Vote UKIP get Labour... exactly the way the County is formed. An alliance between UKIP & Labour with Labour calling the shots.

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    Andy T

    Thursday, May 22, 2014

  • Good to see the last pieces moving into position. Building can begin this summer. What happens when an ex Leader trying to make his mark and a clueless learner get together on a project ? They become outcast political pygmies.

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    John Fisher

    Thursday, May 22, 2014

  • I'd imagine that you'd be well placed to spot works of fiction, Mick.

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    Shirley Stalker

    Thursday, May 22, 2014

  • What does surprise me and many other people is that the go ahead was originally given when all the criteria had not been met at the time! If a business had behaved like this,they would be in the bankruptcy courts! Why is it that time and time again councillors and politicians can make bad decisions,and never suffer the cost on a personal level! The results of this latest debacle will mean there is less money to spend on services,and our crumbling roads in Norfolk will not get repaired!

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    Harry Rabinowitz

    Thursday, May 22, 2014

  • Blame those who said cancelling the Willows contract would be at no cost - eg Henry Bellingham, Nick Daubney, John Dobson etc. They also campaigned to get the Government to take way £169 million of Waste Credits and asked Eric Pickles to delay giving planning permission for the Willows energy from waste plant. They are the guilty ones - now trying to cover their backs!

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    Mick Castle

    Thursday, May 22, 2014

  • There was never going to be any money from the Government. Just a fiction perpetuated by Henry Bellingham and Norman Lamb MPs.

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    Mick Castle

    Thursday, May 22, 2014

  • There was never any chance of Government monies to bail out Norfolk. Henry Bellingham MP, John Dobson, Nick Daubney and the rest gave the totally wrong picture that Norfolk could just walk away from the Willows waste plant at no cost. Don't give them an easy ride! They banged the drum for the Govt to take away £169 million of Waste Credits away from Norfolk and plagued Eric Pickles to delay giving planning permission for the plant. we know who the Guilty people are!

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    Mick Castle

    Wednesday, May 21, 2014

  • I see Greene King were advertising in today's EDP: "Wanted - group of people to arrange a pi.. up in our brewery..... Norfolk County Councillors need not apply"!

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    Citizen of EUSSR

    Wednesday, May 21, 2014

  • The Baroness was spot on when she laid the blame fairly and squarely at the door of the idiot cabinet who allowed the contract to be signed before planning permission was forthcoming. Gnobbs and his gang then hurled abuse at everyone he could in central government in a bizarre and infantile attempt to get them to fork out for this horrendous local mistake. So when you head off to the polling station tomorrow just remember the Tories caused this and Labour made it much much worse.

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    alecto

    Wednesday, May 21, 2014

  • When you all go out to vote tomorrow, remember which party screwed it up.... Conservative councillors got us into the mess and Conservative MPs in the west of the county did as much as they could to make sure it never happened. Then the MPs (Bellingham and Truss) did as little as they possibly could to make sure that Norfolk rate payers would have to pick up the tab. Don't vote UKIP tho', probably more clueless than the Tories

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    pablo

    Wednesday, May 21, 2014

  • As I've said all along you vote Ukip,you get Tory.

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    Peter Watson

    Wednesday, May 21, 2014

  • Those who signed the Contract should not be allowed to hold public office. Only fools would sign a contract with such penalty clauses.

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    Norfolkman

    Wednesday, May 21, 2014

  • Baroness Stowell has summed it up quite well. The blame lies squarely with the officers councillors who agreed the contract before planning permission was awarded. Simple as that.

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    Bikerboy

    Wednesday, May 21, 2014

  • Result hey George, now you can continue b.laming Henry Bellingham rather than your own dis.graceful less than amateur letter.

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    Honest John

    Wednesday, May 21, 2014

  • Its time for the total council to fall on its collective sword.A total farce with supposedly professionals in charge of decisions,and while they di this pull down County Hall an edifice that represents their arrogance

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    Albert Cooper

    Wednesday, May 21, 2014

  • Why should taxpayers nationally pay for Norrrrfolk wrong-doing and dithering (incompetence). As for the A47....you're having a laugh aren't you?

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    One Horse Town

    Wednesday, May 21, 2014

  • Del Boy, all this is down to councillors signing a contract before having palnning consent, they seem to have forgotten their own planning rules which suggests an eagerness to push this through. Politics costing us all money because common sense goes out of the window when the politicians get involved with anything.

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    parkeg1

    Wednesday, May 21, 2014

  • Typical Bellingham. All talk no do. All this is down to a few noisy nimby's.

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    Del Boy

    Wednesday, May 21, 2014

  • They cocked this up, let them pay, it dragged on for so long, they should be answerable to this mess

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    Derek McDonald

    Wednesday, May 21, 2014

  • There is a general election next year just remember these facts when voting.

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    Michael Johnson

    Wednesday, May 21, 2014

  • Well what did you expect, K,nobbs used his repeated bad manner when he wrote to central government and I don't blame them for not entertaining him. When you have your hand out for help you should at least be nice instead of acting like a left wing selfish fool

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    Sweet cheeks

    Wednesday, May 21, 2014

  • The money should be taken out of the salaries now and in the future of all the idiots who approved this stupid scheme in the first place. It's a pity the tax paying public are not equipped to sue the twits responsible for this debacle.

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    kenneth jessett

    Wednesday, May 21, 2014

The views expressed in the above comments do not necessarily reflect the views of this site

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