On 21st August 2024, Derby City Council and Derbyshire County Council issued a combined statement regarding the future of the Sinfin Incinerator. This has been widely reported and interpreted as a change of policy/”U-turn” by Derby City Council leadership, leaving many residents upset and concerned.

In reality nothing has changed.

Cllr Shanker was “sacked” by the Council in June 2024 for pursuing his party’s published manifesto policy to ensure that the Incinerator would never reopen. The argument for bringing the motion by Cllr Hassall ( Tory Group Leader) was that Shanker’s strategy had resulted in the submission by the County Council of an invoice, in January 2024, for £93.9m which would have jeopardised the City Council’s finances; also the invoice went undisclosed to fellow Cllrs, on officer advice, until May 2024.

After 7 months of dispute between the two parties a carefully worded joint statement was issued this week which resulted in the invoice being withdrawn. The press release was carefully worded and insightful:

“…the councils have successfully addressed the key issues that led to the dispute”

Joint statement dated 21/8/24

Derby City Council had already signed the Inter Authority Agreement 3 (IAA 3 – document defining the contractual relationship between City and County initiated under the Tory administration and signed during the Labour administration). There was no dispute, as such, from the City’s side; the principal proviso from the City was that any solution must be subject to a business case and provide value for money for the residents. This seemed to be a point of concern for the County.

Derbyshire County Council Conservative Group ( not County Council Officers) issued a statement in June 2024 setting out the basis for the dispute and the invoice.

“…Cllr Shanker (Labour) has been clear in numerous public statements that this key waste facility will never open. It seems to be clear he means it.

“His behaviours and actions, since being elected leader may well have jeopardised any chance of successfully delivering a working plant and anything resembling a return on investment…”

“His actions, and more particularly his inactions, stonewalling and time wasting, alongside his perceived refusal to agree to additional reassurances to ensure the public investment by the tax payers of the two authorities is protected…has seen the City Council issued with a valid invoice for £93.9m”

The key points that have now been resolved:

1. Shanker has been removed as Leader.
2. Derby City Council has adopted a more positive attitude, publicly, regarding the future of the plant.

“Agreement on the terms of a new Inter Authority Agreement has been reached in full…”

Joint statement dated 21/8/24

There are no details of what may have changed and how substantial they are, however the last paragraph of the press release is most revealing.

A “spokesperson for Derbyshire County Council and Derby City Council said…” .

There is not actually a “spokesperson” who represents both authorities; it is notable that there are no quotes from the respective Leaders of the two councils.

“We look forward with confidence to moving the project forward to provide both councils with the most viable and cost-effective, long term solution for the management of household waste to benefit residents in both the city and the county”

Joint statement dated 21/8/24 (my emphases)

This is explicit. The solution must now pass a number of tests. These constraints are new, and now mandated by Derby City Council.

1. Viable – the single issue that resulted in the project failing was that the contractor could not make the technology work; success depends on new technology development. A new supplier must be confident that they can overcome this signficant hurdle before contracting – that will be difficult to prove, in advance.
2. Cost-effective – the business case was always marginal. In the Derby News article December 6 2018 “Sinfin Incinerator: Everything you need to know on the contract…and it’s already in the public domain!” which included a detailed analysis of the business case ( discussed with the Chief Finance Officer at the time) concluded :
   • “A rough calculation based on the contract suggests that the business case is around break even. i.e the cost per tonne of processing through the Incinerator is around the same as for putting it in landfill. The original plan assumed a large increase in landfill charges which has yet to transpire.”
   • The project originally assumed a substantial income from electricity generation which is one of the technical stumbling blocks.
   • The indications are that the overall business case has deteriorated e.g. tonnages, rates and electricity generation
3. Benefit residents – apart from passing the legally required “value for money” test , it must benefit ( or at least not be detrimental) to the residents. There is a well publicised “head wind” on this matter.

The statement refers to the “project”; the project being “Household waste disposal”. It does not state that the most viable, cost- effective and beneficial solution is, necessarily, the “Sinfin Incinerator”.

Comment

Derby City Council’s insistence on the “viable, cost-effective, and benefit” conditions is a clever move and should not be understimated.

The tactic seems to have been to shift the focus away from the City Council having to “break the contract” in order to stop the project ( and the threat of multi-million pound invoices) onto an, as yet, undiscovered, 3rd party company to propose a fully compliant offer to reopen the plant. Any prospective contractor would stack the commercials heavily in their favour to cover the risks and render the business case unacceptable for the Councils.

Viewed objectively, political ideology, chest beating, threats of invoices, or nicely worded press releases will not reopen the Incinerator.

County Council’s behaviour is driven by their desperate financial state Derbyshire County Council – on the verge of going bust! (Derby News February 11 2024)

County Council needs to convince itself, and its auditors, that the Incinerator project is “live” otherwise it will need to write off at lease £57m of its capitalised costs against revenue reserves which would take it perilously close to a financial crisis.

In the Derby Telegraph article Councillor Steve Hassall, leader of the city council’s opposition group, said

“… he was pleased that the city council has not had to pay the invoice presented by the county council

He added: “But at what cost has this come? It is unclear as to what the city council has had to forfeit in order to reach this agreement. It would seem incredible to believe that the county council has rolled over and not received anything in return for the withdrawal of their invoice be that financially or contractually. Dispute resolution requires concessions from both parties but what they are remains undisclosed.”

The logical conclusion is that the “concessions” by Derby City Council were the sacking of Cllr Shanker, and the publication of a short, inert press release stating ongoing commitment to the project. For those two actions, the County Council effectively “paid” £93.9m.

That’s how desperate the County Council is.

As the “invoice” does not appear in either Council’s financial statements for 2023/24, which were published before the press release, it means that there was no expectation of an actual payment transaction taking place. So, perhaps, the County Council has, in fact, “rolled over” and not received anything substantial in return, apart from Shanker’s “head” and a press release.

It raises questions as to the extent of the collusion between the Tory Leader of Derby City Council, Cllr Hassall, and the Tory administration in the County Council over the sacking of Cllr Shanker (Cllr Hassall proposed the motion to oust him in June 2024).

The whole vote of no confidence episode seemed too conveniently melodramatic and choreographed.

Neither Council will declare the end of the project, soon; they can’t, contractually.

However as each day unfolds the likelihood of success wanes and the dominating smokeless smoke stack on the Sinfin skyline, is the only feature of this project which is consistently clear.