In a potentially landmark judgment, a Bristol High Court judge has ruled that the Gloucestershire County Council (GCC) concealed, for three years, the details of a £600 million contract with Urbaser Balfour Beatty (UBB) for the controversial Javelin Park incinerator. At the heart of the case is the legality of GCC agreeing to pay, without any re-tender, £150 million more to UBB than had previously been agreed following a competitive tender.
The court heard that a contract originally agreed with UBB in 2012 following a competitive tender exercise was renegotiated and replaced by a second contract signed in early 2016. Details of both contracts were kept secret but it was finally revealed that the second contract was some 30 per cent (c £150m) more expensive than the first, for the provision of the same services. It is a general requirement of procurement law that any such significant increase requires a new, competitive tender, as that is the only way of ensuring value for money.
Representing Community R4C, their barrister Duncan Sinclair said: “The evidence is consistent and compelling that all but a small cabal within Gloucestershire County Council was in the dark. The Council resisted disclosure of even the first contract for four years, before the Information Commissioner’s Office (ICO) and then on appeal. It then resisted disclosure of any details of the disputed second, 2016, contract for another two years, through the ICO and by appealing until it finally released documents on 20 December 2018.”
GCC’s deliberate concealment of the facts for so long meant it was impossible to challenge the 2016 contract at the time or indeed to seek to obtain a remedy annulling the contract. C4RC was thus forced to seek damages in order to expose the illegality of the 2016 contract.
Tom Jarman of Community R4C said: “We brought this case in the public interest. It was never about a small damages claim but about ensuring Gloucestershire County Council complies with the law and does not waste taxpayers money. We want £150 million back for taxpayers but most of all we want a better environmental outcome for Gloucestershire by seeking a low cost, low carbon, waste treatment option which does not simply burn plastics and other recyclable resources. The facts revealed in court and the judge’s decision show that GCC hid a truly astounding increase in costs for years. This itself incurred £100,000’s of taxpayers’ money, using every legal trick in the book. The County’s taxpayers deserve better from their Councillors and civil servants. We will continue to go about trying to get their money back.”
Community R4C say they are optimistic that this judgement can enable a cross community, cross party approach to achieving a remedy. They want a rebate to the County Council of all overpayment to date to UBB (£10m’s) plus a reduction in future payments, to a total of £150 million – and a change to the contract terms to remove the incentive which makes it cheaper to burn recyclable material in the incinerator than recycle.
Sue Oppenheimer, co-chair of Community R4C said: “We will be writing to MP’s councillors and others to seek an immediate review, based on the Court’s findings. A cross-party committee should be set up – free from the influence of those that wrongly signed up to a new contract and kept it secret – to look into how we can recover this illegal overpayment from UBB. In parallel, we will continue to engage closely with GCC’s auditors, Grant Thornton. We issued a formal objection to them regarding the value for money of the contract in early 2016, and despite recognising a potential breach of procurement law, before this case it was suggested they may not pursue the issue. It is now incumbent on them to do so. They have what the National Audit Office refers to as a quasi- judicial function in investigating this. If there was nothing untoward in increasing the contract cost by some £150 million outside competitive pressure, one has to ask why GCC went to such extraordinary lengths to conceal the facts for so long. It would be a serious dereliction of duty for Grant Thornton to turn a blind eye to the now identified facts.”
In a further ruling, His Honour Judge Rasmussen decided that Community R4C could not pursue its case for damages because it would not have qualified as ‘an economic operator that suffers or risked suffering loss’ at the time had there been a re-tender. CR4C dispute this and are considering whether to appeal. Community R4C says it plans to consult its supporters as well legal representatives before deciding whether to seek leave to appeal so that the case may proceed.
Source: Community R4C