Agenda Item 16 at the next Council Cabinet meeting on Wednesday 12 July 2023 is an update on the Sinfin Incinerator -Long Term Waste Management Project. However, once again, this will be discussed in secret, behind closed doors and with no form of public update. This is despite the likely impact on the public finances being substantial.

Cllr Baggy Shanker, the Leader of the Council, has stated previously that it is his expectation that where business has to be discussed in private that there will be a brief public report describing key context. However, the Legal Team disagree on this matter in relation to the Incinerator.

Statement by Cllr Shanker:

As Leader of the Council, I wanted to reassure everyone that I have been pushing for the release of a public report, ahead of the latest report on the Sinfin Waste plant that will once again be debated in private. 

In my view, the City Council should, wherever possible, put the public interest first, and wherever possible, report in public on issues on which it is making key decisions. Where there are matters of commercial and legal sensitivity, ordinarily I would expect a public report to be produced, without it revealing the full extent of these matters. 

As you would expect, I have sought to secure such a report relating to the Sinfin Waste Plant, but having had several discussions with senior officers, I have received strong advice from the Monitoring Officer, Chief Executive and Deputy Chief Executive, that to report in public on this matter, would potentially expose the Council to significant legal and financial risk. 

My views on the Waste Plant are well documented, against it first being built and it should not be recommissed again but as Leader of the Council, and the responsibilities that come with that role, I must be mindful of the fiduciary duty to local taxpayers. Whilst I may not welcome the advice, I am minded to accept it, given the risks posed to the Councils legal and financial standing

This was based on the following advice from the Council’s Chief Legal Officer (Monitoring Officer), Emily Feenan:

“Dear Baggy

I am writing to you to confirm my advice, as Monitoring Officer, in relation to the possibility of publishing a public report linked to the private report which will appear at Item [16] on the Council Cabinet Agenda for the meeting on 12 July.

You expressed a wish to issue a public report if at all possible, given your Group’s stated position that all private reports should, wherever possible, be accompanied by a linked public report, to maximise transparency.  Whilst there is no requirement at law or under the Council’s constitution to have a public report linked to a private report, this is a position which I do, generally, support.  However, it is important to recognise that there are some rare cases where the information included in a private report is so confidential and the risk of prejudice to the Council’s position as a result of disclosure so great, that this is not always possible.

I have given the current situation careful consideration and have discussed this with both the Chief Executive and Deputy Chief Executive; however, given the highly confidential and sensitive nature of the content of the private report, my advice is that the benefit of maintaining confidentiality far outweighs the public interest in publishing a public report given the potential for inadvertent disclosure of confidential information in the discussion of that public report.  It is not in the Council’s best interest to have a public report on this occasion.

Kind regards

Emily”

Comment

It is a moot point whether the Legal Officer is being unnecessarily cautious with public disclosure. In reality much is in the public domain.

The contractor for the Incinerator was Resource Recovery Solutions (Derbyshire) Ltd (RRS) which is now in Administration. Its most valuable asset is not the plant/equipment (albeit not working) but the Adjusted Estimated Fair Value (AEFV) of the Project Agreement i.e. the current day value of all future income, less costs.

The Derby News article of December 2018 “Sinfin Incinerator: Everything you need to know on the contract…and it’s already in the public domain!” detailed the Project Agreement and the possible compensation on termination.

“The “buy-out” compensation could be in the region of at least £200m. This would be subject to negotiation by all parties; any costs associated with “rectification” would be deducted from the compensation.”

“Sinfin Incinerator: Everything you need to know on the contract…and it’s already in the public domain!”

A slightly lower number of £186.6m was disclosed as the RRS claim. The Councils counter-claim is £9m. A significant gap to bridge.

A case management conference on the AEFV took place on 2 December 2022. Mr Justice Wasksman ordered a 28 day trial to start on or around 10 June 2024…11 months away!

It is clear that RRS’ position is that, with a modest amount of expenditure, the plant could be made operational and deliver the contractual output. The Councils’ believe that it fundamentally doesn’t work and have previously made a decision to engage a new contractor to bring the plant into service – an action which might have actually undermined the Councils’ legal position.

Perhaps the desire for confidentiality is to avoid public scrutiny on a poorly managed situation rather than the risk of disclosing commercial information that exposes a negotiating position. Either way a public report should be more than possible in the interests of overall transparency.