Norfolk left counting the cost as incinerator plans go up in smoke
10:02 01 April 2014
Archant © 2011
Norfolk taxpayers are today counting the £35.8m cost of years of bitter controversy over a proposed incinerator which did immeasurable harm to the county council’s reputation but left it still looking for a long-term answer to the county’s waste.
The bill for years spent on controversial plans for the proposed King’s Lynn incinerator is expected to total about £91 per household.
In a shock U-turn, council officers will ask councillors to next Monday terminate the contract with Cory Wheelabrator because of continuing uncertainty about when the communities secretary would decide whether to ratify planning permission.
Time for an inquiry?
The saga over the soon-to-be cancelled King’s Lynn incinerator has cost millions of pounds for little benefit, but council leader George Nobbs, has ruled out an inquiry into what went wrong.
He said a QC and an independent financial expert had already looked into the saga, and he added: “Their conclusion was that officers did all the right things, so I think to regurgitate it yet again is throwing good money after bad. There is not any evidence that any officer acted on anything other than what he thought was the best interest.”
He said the previous Conservative administration had made “no provision whatsoever” either to pay compensation in the event of planning permission failing, and added: “If I were to call for the resignation of the person who had signed the contract he is no longer leader of the council, so that’s pointless.”
Bill Borrett, who signed the contract, said: “I’m not a lawyer. I’m a councillor and we have to act on the advice we receive from officers, without which no council would be able to agree any detailed contract.”
He said that council officers had “very expensive lawyers and all sorts of experts” during the process.
Responding to Mr Nobbs’s claim that communities secretary Eric Pickles was to blame for the decision to terminate the contract, Mr Borrett said it was too early to say, and he did not know if this was usual or unusual.
Instead of incriminations, Mr Nobbs called on the county to move forward.
He said: “This whole issue has been, and will continue to be, very costly in terms of money for Norfolk.
“Let us ensure that the cost is not added to by a lingering sense of bitterness and division. It is time now for the people of Norfolk to put this behind us and face the future together.”
“If anybody had tried to talk to me about it, I would have reported them to the permanent secretary.” - Eric Pickles on accusations the delay to King’s Lynn incinerator planning decision was political
Council leader George Nobbs said: “In October, when council voted for continuation of the contract, that was on the basis that it still represented good value for money. However, that was based upon accepting the secretary of state at his word when he said he would give his decision on the planning inquiry ‘on or before January 14’.
“Mr Pickles’ decision – or rather the lack of it – has been the real game changer.”
The recommendation to cancel the contract now will cost the council an estimated £20.3m in compensation to Cory Wheelabrator, a figure which would have risen to about £25m if it was terminated after May 1.
Council officers said compensation would then have risen by £400,000 a month.
In addition, the council has to pay £8m for hedging exchange rates, and £2m towards the cost of a public enquiry.
The council estimated it has already spent £3.5m procuring the contract, and £2m buying the site.
Mr Nobbs laid the blame for the project’s demise firmly at Mr Pickles’ door, and said he felt “as if the council has been actively sabotaged by the government”.
Last October, councillors voted to continue with the project by a two-vote majority, amid warnings that the council could be bankrupted by compensation which would become payable within days.
Since then, the council has included a £19m reserve in its 2014-15 budget to help pay any compensation. In the short term, the remaining £11m will come from general reserves, but this will be replenished with £3m from an underspend in 2013-14, and £8m from savings during the year.
Mr Nobbs called for MPs who had said the government would help the council financially if it ended the contract “to put the government’s money where their mouths have so frequently been”.
North West Norfolk MP Henry Bellingham said: “I can’t promise, but I’m going to mobilise all the Norfolk MPs and I will see if indeed they have to pay the full penalty, which indeed is a big if, or whether it can be capitalised into a loan over 20-odd years and whether the government might find other ways of helping.”
Next Monday’s extraordinary council meeting was triggered by a cross-party group of six councillors, who asked the council to consider whether it should press ahead with the project in light of the secretary of state’s delay.
One of them, Tim East, said: “I’m delighted with the cancellation of the contract. Now we are able to promote a more environmentally-friendly way of disposing of our waste, simply because we have had the foresight to set aside a cancellation fee of £19m.”
Conservative opposition leader Bill Borrett, who signed the contract when his party controlled the council, said he had supported it if it was value for money, and he would now study the latest report.
As well as facing opposition from 65,000 people in a 2011 ballot held by West Norfolk Council, the anticipated financial savings of the incinerator have fallen dramatically since the contract was first signed.
It was originally expected to save Norfolk taxpayers about £250m over 25 years, a figure which is now put at just £12m over 23 years because of delays which increased the contract price, and the government’s decision last October to withdraw a grant worth £169m.
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