Agenda item

[At the discretion of the Chairman of Overview and Scrutiny Board, this item was moved forward to be considered as item 6 on the agenda].

The Environmental Services Manager provided a report on reprofiling of capital fleet replacement budget and in doing so noted that in 2021, as part of a review of Council finances, the decision was taken to extend the life of operational refuse fleet vehicles by an extra year, from 7 to 8 years, before replacement. At that time, it was also decided to start refurbishing Waste Collection Vehicles to extend their life by a further period in order to reduce capital expenditure on new vehicles and make savings that could be put towards the future purchase of more expensive energy efficient vehicles, as part of the Council’s carbon reduction ambitions.

It was reported that as part of the decision in 2021, no appropriate allowance was made for the operational impact that refurbishment, which removed multiple vehicles from use for extended periods and required the use of hire vehicles to support service delivery. This had resulted in unbudgeted revenue pressure. In addition, the first few vehicles took around 12 months to be refurbished due to parts and supply issues that were affecting the sector in 2022-23. Subsequent vehicles had also overrun on planned refurbishment timescales, resulting in significant unbudgeted costs on hire vehicles.

The delays in refurbishment timescales and the need to prioritise work on the Waste Collection fleet (Domestic & Commercial) had impacted on the availability of other vehicles required for statutory services such as road sweepers, Place Team vans for litter picking and fly tip removal. There had also been impact on discretionary and chargeable services such as the District Public Toilet cleaner’s vehicle, and WRS’s dog warden van, impacting on income generation of these services.

It was reported that in light of the increased costs and operational challenges arising from extended operational lifespans of the vehicles, overruns on refurbishment periods, and staffing issues within the workshop, it was proposed to revert to a seven-year replacement cycle on the Council’s Waste fleet, and to re-profile the Capital Fleet Replacement budgets to support the purchase of replacement vehicles.

It was proposed that revenue funding be increased to support the ongoing use of hire vehicles to safeguard operational service delivery of the waste service during 2024-25. Revenue pressures were anticipated at £88,000 in 2024-25, £342,000 in 2025-26, and £372,000 in 2026-27 before a reduction in revenue payments as a result of bringing the replacement costs forward would result in predicted revenue saving of £339,000 in 2028-29, £660,000 in 2029-30, and £644,000 in 2030-31. The next vehicle replacement cycle would then be due in the 2031-32 financial year, when alternative types of vehicles, including electric-powered refuse vehicles, might become a more viable option for the Council.

It was also proposed that as part of reprofiling of capital fleet there be a purchase of 10 new internal combustion (ICE) refuse collection vehicles (at £210,000 per vehicle) in the 2024-25 financial year with a further 10 vehicles over 2025-26 and 2026-27 financial years. It was noted that with no current timescale for the rationalisation/relocation of the Council Depot Spaces, it was unlikely the Council would be in a position to invest in alternative-fuel vehicles before 2030. It was planned that instead, in 2024-25 the diesel internal combustion engine (ICE) fleet vehicles would be used with 30 per cent use of HVO (Hydrogenated Vegetable Oil) to support the Council’s carbon reduction objective.

Following the report presentation, a number of matters were discussed by Members as follows:

• Approaching other authorities about purchase of refuse vehicles – It was reported that the Council did approach other authorities regarding how they utilise refuse vehicle fleet. Based on those conversations, it was apparent that many authorities continued to use internal combustion (ICE) vehicles. It was noted that there was an additional complexity in the Council approaching other authorities about the purchase of refuse vehicles in that Bromsgrove was one of only two authorities in the country having diamond lift bins. This led to considerable difficulties as the authority would need to find vehicles on the second-hand market with compatible lifting mechanism (diamond lift) and such vehicles were highly uncommon across the UK.

• Member consultation on investment in refuse vehicles in 2024-25 – Members requested that, given the scale of investment in new refuse vehicles, an update be provided to Overview and Scrutiny Board once the process of purchasing of the 10 refuse vehicles had progressed to procurement stage.

• Costs set out in the report were solely for Bromsgrove District Council. It was noted that a similar fleet replacement programme was in place for Redditch. Due to joint service arrangements with Redditch, the Redditch fleet was able to support Bromsgrove service, for example when Bromsgrove vehicles were being serviced or undergoing statutory inspections. Costs were clearly delineated between the two authorities.

• Number of refuse fleet in stock at Bromsgrove Council – It was noted that the combined collection fleet consisted of sixteen 26-ton vehicles, one 18-ton vehicle, and three smaller trucks operating from the Bromsgove Depot. There were three additional vehicles on the Council’s commercial waste service, with a different lifting mechanism.

• Possibility of employing apprentices at the Depot and to operate refuse vehicles – It was highlighted that currently the Council did not have sufficient staffing capacity to maintain the fleet, and needed to recourse to hiring agency staff to maintain service operation. The Council was looking at restructuring the workshop to engage fitters and fan mechanics (at slightly lower experience level) and put in place arrangements to upskill through a skill-based pay system. It was commented that once the Council was in a position of having sufficient staff to support the workshop fully, opportunities around apprentices would be explored.

• It was noted that the Council had apprentices in the past, with some of the mechanics currently employed by the Council coming through the apprentice route. An example was given of one of the apprentices working at the Redditch workshop who had recently been appointed as a senior mechanic.

• Apprentice programme – It was reported that the last apprentice programme run by the Council for HGV mechanics was undertaken approximately 6-7 years ago.

• Staffing – It was noted that HGV mechanics from Birmingham and other areas were being approached about joining Bromsgrove District Council.

• Additional revenue costs already incurred – It was reported that there had already been additional costs incurred as a result of the need to hire waste vehicles in 2021-22, 2022-23 and 2023-24. Additional revenue of £150,000 was proposed to be allocated in 2024-25 for hire costs. This was based on hope that the supply of new vehicles would take approximately 40 weeks. Additionally, it was hoped that garden waste fleet, which stops operating over winter, could be used to support the service to reduce costs.

• Building spare capacity into service delivery – It was noted that spare vehicle capacity was built into service plans as the Council was required to have an Operator’s Licence agreed with the Traffic Commissioner and the DVSA. As part of these rules, the Council had to undergo scheduled inspections that took place every 6-8 to ensure safety of vehicles. During inspections vehicles could be off the road for extended periods which required spare capacity to be built in to allow continuation of service.

• Waste fleet situation – It was highlighted that waste fleet was the area of the wider Environmental Services most at risk and therefore this area was being prioritised following review by the Environmental Services Manager. It was highlighted that domestic waste collection was a statutory service and delivery of consistent service in this area had to be prioritised over other services such as street cleansing.

• Street cleansing fleet – Concerns were expressed about the Council only having two street cleansing vehicles available and whether that was enough to cover Bromsgrove District.

• Accounting for inflation in the purchase of waste fleet vehicles – Inflation was accounted for in the costs of purchasing refuse vehicles with the cost for 2024-25 being £220,000 and in subsequent years this was uplifted by £5,000 per year. It was highlighted that this was an estimation at this moment.

• Modelling the number of waste fleet vehicles in need of replacement – It was reported that the entire fleet was in urgent need of replacement, with those vehicles that had been recently refurbished only having a couple of years of useful life left. The Environmental Service Manager commented that in his professional opinion obtaining new refuse vehicles was the only viable option to keep the waste disposal service in operation over the next couple of years.

• It was explained that Bromsgrove had different types of bins from Redditch. Bromsgrove had diamond lift bins. The reason for this was that in 2004 Bromsgrove received grant funding from central government to invest in new waste technology. Investment was made in a type of waste collection vehicle known as a side loader which allowed operation of reduced staff as the vehicle could pull alongside the bin by the curb edge, allowing the mechanism to reach out, grab the bin, and lift it in. The diamond mechanism helps centre the bin on this automated mechanism. It was noted that difficulties were experienced with use of this type of vehicle and the Council had to revert back to conventional fleet service when those vehicles reached end of life.

• HVO fuel – It was reported that switching to part use of HVO fuel in ICE vehicles had no noticeable impact on fuel efficiency of fleet vehicles but resulted in a slight increase in moisture related issues when vehicles had been parked up for long periods.

• Commercial waste service – It was reported that the Council’s commercial waste service, which operated across Worcestershire and parts of Warwickshire, achieved net profit of circa £180,000 in the last financial year.

• The Chairman questioned why the change to reprofiling of the Capital Fleet Budget towards the purchase of new waste fleet vehicles was not reported at the February 2024 meeting of full Council when the budget for 2024-25 was approved. The Chairman questioned why the proposal submitted to Members in February 2024 still included a plan to refurbish the fleet, and why this had changed radically as in this report in April 2024, which noted that refurbishment was not a viable option and waste vehicles had to be replaced. The Environmental Services Manager responded that the process of looking at options around the fleet started in December 2023. At the time concerns were raised by the Environmental Services Manager regarding the refurbishment of fleet vehicles as a viable option and that the waste collection service was at high risk of failure. The proposals with regarding to fleet budget were not able to being finalised before the budget setting in February 2023. However, these reprofiling proposals, including the need to provide £150,000 revenue budget for 2024-25, were presented to the Overview and Scrutiny Board at the earliest date possible after the full extent of risk became known to the Service.

• Risk of not meeting statutory obligations – The Environmental Services Manager reported that at this point the Council had not failed any of its statutory duties. The impact of the problems within the service had impacted on the timescales for removal of larger fly tips, which were taking around 6-7 days to remove but still within statutory timescales to provide cleansing duties. The concern was delivery of the Environmental Services fleet over the next two years and that if weaknesses within the fleet were not addressed the Council would breach its statutory duties.

• The Portfolio Holder for Environmental Services and Community Safety (including Car Parking) addressed the Board and in doing so noted that elected members had been provided with the opportunity to attend a presentation on the fleet, delivered by the Interim Executive Director. The Portfolio Holder commented that at the moment he thought the move to electric for larger fleet vehicles would be impractical due to issues with range and infrastructure.

• A Member proposed that the option of leasing the fleet vehicles with a maintenance agreement should be considered given the issues with recruitment of HGV mechanics and running maintenance costs. It was responded that due to the nature of the work delivering waste collection service there were a large number of minor accident damage. In addition, there were risks of failure to sensors and components within the lifting mechanism at any time. As such, the leasing options that were investigated by Officers were not thought to be viable due to restrictions on those leases. However, routine maintenance was outsourced as much as possible. If, at the procurement stage, there were viable lease options available, these would be considered.

• The Board considered whether it was necessary to set up a Task Group investigation due to the seriousness of the situation with regard to waste services fleet. It was noted that the Board previously agreed to being provided with a presentation on waste and recycling and implications of the Environment Act, including on a requirement to introduce food waste. This presentation would be provided at a July meeting of Overview and Scrutiny Board. It was felt by most Members that this presentation should be considered in the first instance and that no Task Group should be set up for the time being.

RESOLVED that the report be noted.