LGA Governance peer review: East London Waste Authority (ELWA)

The peer team were invited in at a significant juncture for ELWA, with the 25-year contract with Renewi set to end in 2027. Coming out of the disruption of the Covid pandemic, significant work is now under way to scope what comes next for ELWA, as it enters a dramatically different waste management world to that which existed prior to the Renewi contract; a world where the ‘Climate Emergency’ and ‘Circular Economy’ are significant considerations.

Understanding what comes next for ELWA is critical in shaping and developing its future large scale and high value procurement for the post-Renewi contract. Though ELWA functions well in terms of managing the existing Renewi contract, ELWA must continue to ensure its structures and ways of working remain relevant and fit for purpose for the future.​

A key finding for the team was that ELWA, whilst progressing with undertaking a solid technical procurement process, needs to more effectively build collective ownership of decisions and direction – both ​from its councillor membership and from the borough-based officer expertise, whose knowledge and experiences those councillors and ELWA rely upon. This was a recurring theme throughout the review. However, there is work that can be done to address this in the short and medium term and improve ELWA engagement all round, delivering ownership and collective responsibility for the decisions made and positioning ELWA as a real driver for positive outcomes for the four boroughs involved.

The peer team believe that there is potential for partner authorities to leverage much more from ELWA, both in terms of the contract procurement, but also in terms of wider joint endeavours, building on their newly agreed joint strategy work.

The new contract offers an opportunity for the partner councils to set a vision for the role waste management can play in the climate agenda and in adding wider social value, and to collectively set an ambitious vision for the future. As such, it is essential that all those involved, particularly elected members, are fully engaged and understand the magnitude and far reaching consequences of the decision making they are currently involved in. There is a potential for all involved to garner much political capital if the opportunity is harnessed well. ​

Though it is clear that the procurement is being planned for and managed, and that significant work is underway, there is a risk that due to tight timescales key opportunities for meaningful and full member engagement may not be fully exploited. There is a sense that the size and scale of the new contract procurement is not widely understood by members, but it is essential that work continues now to ensure this is remedied.

New and more stimulating methods of engagement and decision making opportunities will be key to facilitating wider understanding and ownership, including an evolution of the decision making processes and inviting members to ‘get out and about’ more and see how other places are doing things. There is now much innovation in waste and resource management and there are good ways of bringing this to life for members that could be well utilised.  

Though it is recognised that the nature of work in a waste authority requires recourse to technical information and language, there are ways to marry this with content that is easier to engage with, and that ties into themes and agendas (such as climate change or social value) that everyone can understand. To support this, ELWA would benefit from some more strategic, political thinking, aided by a communications and stakeholder engagement function to better communicate the positive vision for, and work of, ELWA.​

There is a need to ensure that the Members of ELWA are clear about their roles – i.e. when are they are serving on ELWA, they are representing ELWA, not their individual boroughs. During conversations some members gave the impression they believed their role was to champion the needs of their home borough, first and foremost.

Overall, there is a slight ‘chicken and egg’ situation at play, in that without full member engagement with ELWA means that the magnitude of the opportunity it represents is not well understood by its members; but on the flipside, an improved understanding of this could drive better engagement and ownership. Positively, with this in mind, there is much that can be done quickly to get things onto an improved footing, building on existing strengths.

There are a number of observations and suggestions within the main section of the report. The following are the peer team’s key recommendations to the council:

2.1. Stabilise the membership of ELWA and the role of the Chair

Notwithstanding the impacts of the electoral cycle, ELWA would benefit from a model that incentivises constituent councils to keep their members in post for longer periods of time. Continuity of leadership would benefit all partners.

Leaders/Groups in the respective member authorities may wish to think about how members are allocated to ensure that ELWA is seen as a critical and key strategic appointment.

2.2. Ensure that Borough Finance Cabinet Leads are more engaged with ELWA

Introduce some Finance Cabinet Leads onto ELWA alongside Climate/Environment Leads, particularly during the procurement period, or otherwise provide a forum for Cabinet Finance Leads to be part of the conversation. ELWA work is going to be largely dominated by significant procurement work over the coming years. Securing political financial input into those decisions will be critical.

2.3. Ensure there is an engaging and comprehensive induction programme that all members access, providing the opportunity for members across the boroughs to learn about the work of ELWA

All members who sit on ELWA must undergo the induction programme as a necessity, but this learning about ELWA should also remain available to any elected member in the partner authorities who wants it. The team believes that the work of ELWA is significant enough that any member would benefit from learning about it.

2.4. Show members the breadth of waste prevention, reuse, technology, leadership and innovation available across the sectors and the social value, climate impacts and cost reductions that can be derived

There are a range of interesting and innovative places to go and visit or hear from: community reuse schemes covering a broad range of items, from clothing to furniture to toys; surplus food distribution projects; large scale reuse logistics centres (hubs); pop-up street reuse initiatives and many more examples. Seeing things first hand can often bring them to life in a new way that resonates more with elected members and their wider strategic objectives, such as cost of living or climate agendas.

2.5. Ensure ELWA structures are fit for purpose both for now and for the future; particularly bearing in mind the scale of the procurement at hand

Structures that have worked well in servicing the existing Renewi contract will now benefit from adaptation in the context of a significant procurement. Some recent  work to this end is outlined later in this report.

2.6. Consider the establishment of a ‘(Procurement) Programme Committee’: a decision-making committee giving members ownership and leadership on the development of the Options work, Outline Business Case (OBC) and the procurement, with one member from each authority

To ensure better understanding and ownership of the work in hand and to make more timely decisions, establish a ‘Procurement Programme Committee to meet regularly and to be kept abreast of the procurement activity, provide appropriate steers and to make more timely decisions between ELWA Authority Meetings. 

2.7. Consider the establishment of a ‘Joint Waste Strategy Committee’: to identify best practice and work together to provide a steer on the development of the waste reduction, reuse, repair and recycling initiatives and programmes for ELWA and the constituent boroughs, with one member from each authority 

The reduce, reuse, repair and recycling landscape has changed dramatically since ELWA commenced the Renewi contract over 20 years ago. Members need to be exposed to what is now on offer and can be delivered, not just from a waste disposal authority perspective, but also from the development of collection services. This will help inform ELWA members in deciding on the right waste management responses to be delivered through their procurement. 

2.8. Review senior officer communication channels for the Managing Director and consider the potential of establishing one of the borough’s chief executives as a dedicated liaison

The ELWA Managing Director can benefit from the political management experience and expertise of a local chief executive’s group, particularly in keeping key decision-makers fully briefed. Equally, the chief executives can be kept well informed by the ELWA Managing Director and offer a safe space in which difficult aspects of the procurement can be discussed. The impacts (good or bad) will fall on the boroughs and last a long time. A similar arrangement operates in the North London Waste Authority.  

2.9. Review the capacity of Finance and Legal functions, to ensure clear responsibilities and boundaries between ELWA and partner councils

Explore how other comparable authorities fulfil these functions. Current perceptions about clarity of roles will need to be addressed, as well as substantial expected increases in capacity as the procurement work begins to build. 

2.10. Ensure all existing ELWA/Borough Officer bodies and structures are still relevant and provide clear purpose in taking ELWA forward

Noting the Procurement and Contract Expiry officer group (PACE) has been established ELWA should ensure the right officers are involved and that appropriate delegations are in place. Take this opportunity to fully refresh the existing structures to ensure they deliver what they need to.  

2.11. Improve the transparency and ownership of decisions made by members

A clear audit trail is essential. This will be particularly key as the scale of decision-making ramps up. This will serve as a useful ‘tracker’ for stakeholders to be reassured and comfortable with when and how decisions were reached, which will additionally help avoid the potential of backtracking on previous stages and most importantly secure political ownership of decisions.

2.12. Establish a workshop programme between formal meetings for members to further inform key decisions

Providing a regular ‘safe space’ for members to discuss and understand opportunities and outcomes available to the boroughs, so that members are more informed in advance of the detailed reports and understand better the rationales for key decisions.

 

3.1. The peer team

Peer challenges are delivered by experienced elected member and officer peers.  The make-up of the peer team reflected the focus of the peer challenge and peers were selected on the basis of their relevant expertise.  The peers were:

• Carl Beer, Chief Executive, Merseyside Recycling and Waste Authority 
• Cllr Clyde Loakes, Chair, North London Waste Authority and Deputy Leader and Cabinet Member for Climate and Air Quality, London Borough of Waltham Forest 
• Helen Reeves, Senior Adviser, LGA Peer Review Manager

3.2. Scope and focus

The peer team considered the following themes, which constitute a standard LGA ‘Governance’ Review:

• leadership and culture
• scrutiny and challenge 
• corporate capacity for governance 
• policies, systems and structures 
• engagement and community relations.

Additional areas included in this report by request from ELWA included:

• existing contract performance 
• procurement preparations.

3.3. The peer challenge process

Peer challenges are improvement focused; it is important to stress that this was not an inspection. The process is not designed to provide an in-depth or technical assessment of plans and proposals. The peer team used their experience and knowledge of local government to reflect on the information presented to them by people they met, things they saw and material that they read. 

The peer team prepared by reviewing a range of documents and information in order to ensure they were familiar with the ELWA and the challenges it is facing. The team then spent two days on site at Barking Town Hall, on behalf of ELWA, during which they gathered information and views from around 20 meetings, in addition to further research and reading.

This report provides a summary of the peer team’s findings. In presenting feedback, they have done so as fellow local government officers and members.

 

ELWA benefits from some experienced and competent staff, though it is relatively lightly resourced when compared to other waste authorities, especially at this point in time for its future procurement. This may have served ELWA sufficiently until recently, however the procurement process will bring increased demand and workload. ELWA has recruited a Procurement Director and further recruitment is ongoing, notwithstanding the notable challenges facing recruitment within the sector currently, particularly for the required specialisms.

Churn in both constituent council officers and Authority members has not been helpful for ELWA. Though ELWA changed its constitution to remove the expectation that the Chair would rotate between the Boroughs annually, ELWA would nonetheless benefit from a system that incentivises retaining its membership for longer, to ensure longer term consistency and buy in. Though it is recognised appointments lay within the hands of the boroughs’ respective Leaders/Groups and are subject to the outcomes of the electoral cycle, ELWA would benefit from members who have the opportunity to fully understand their remit and can commit to it for a number of years; in particular understanding the weight of the decisions they are party to.

To aid this, members could benefit from a fuller and more consistent induction programme, coupled with ongoing opportunities for learning. The team recommend that there is a mandatory induction for ELWA members as standard, building from what is already in place, but additionally that any elected member from any of the boroughs could have the opportunity to undertake it, or to learn more generally about the work of ELWA. This would be complemented by continued opportunities for learning.

There are a range of interesting ways to do this, which other waste authorities put to good use, for example visits to re-use hubs, pop-up centres and community projects repurposing and reusing everything from furniture to white goods, as well as clothing and surplus food programmes. This should resonate better with elected members who can see first-hand how such activities contribute to the cost of living and climate crises. Members could also visit newer examples of the key technologies for waste disposal including Energy Recovery Facilities and talk to members of other procuring authorities to hear about their experiences, for example the NLWA.

As a non-directly elected organisation, ELWA culture tends to have a more technical rather than strategic or political focus. Though it is recognised there is always going to be a necessity for a level of technical detail given the business of a waste authority – and this will be true of all waste authorities – there is good practice from other authorities illustrating that this can be coupled with modes of communication and language that can be more readily engaged with, understood and deployed beyond the confines of Authority papers and meetings. For example, complex information can be summarised into one-pager ‘need to know’ guides that can be shared with all members, including colleagues in the member authorities who don’t formally serve on ELWA. Additionally, regular bulletins containing ‘good news stories’ about the work of the joint partners involved in ELWA can paint a positive narrative. These could be professionally produced by communications experts familiar with strategic political communications subject to resources.

The team observed something of a ‘Catch-22’ at play between the level  of engagement and the need to develop a sense of shared ownership and driving vision for ELWA. The team strongly recommend that there is more that the partner councils could ‘get out of’ ELWA, with really positive outcomes for local communities, if the opportunity it represents is fully harnessed and deployed.

There is a leadership opportunity for the four boroughs to use existing ELWA shared working and the opportunity the new contract presents, to coalesce around some positive outcomes for East London, such as exploring increased social value, supporting and stimulating the circular economy, and contributing positively to tackling the climate emergency; as well as acting as an enabler for residents to contribute too through reduction, reuse, repair and recycling initiatives at scale

 

There are roughly four authority meetings per year. Though there are no specific sub-committees at present, ELWA does organise additional workshops and briefings, and is currently in the process of organising workshops with a particular focus on the procurement. Corporate Directors from the partner authorities also meet regularly through the Management Board and the Operational Directors through the Procurement and Contract Expiry (PACE) Board.

Though in theory these meetings offer the opportunity for scrutiny and challenge, there is a perception from some that meetings are mainly taken up with reviewing reports and leave little room for more strategic thinking and opportunities for constructive input. This is compounded by the fact that written reports are described as being overly long and ‘impenetrably’ technical, and as such the content is hard to engage with in a meaningful way, within the small published window available. As such, scrutiny and challenge can be weakened. 

The peer team recommend that though a level of technical detail is always going to be necessary, members would benefit from opportunities to engage in a more stimulating way, particularly in terms of the opportunities the new contract presents and to constructively challenge the expectations and options that may be on the table. This may include exploring new technologies and innovations and seeing how other places do things. 

This could also include regular ‘briefings’ that enable ideas to be explored and questions to be asked in a ‘safe space’. Under this model, main authority meetings would be saved for key decision making, and by the time decisions reach them, the topics covered would be well understood and any issues bottomed out in advance. 

 

The team note that Internal Audit is content with ELWA arrangements, as is External Audit, as evidenced through the annual accounts approval processes and assessments including the Annual Governance Statement. ELWA statutory accounts for 2021/22 are approved, pending the sign-off of the LPFA accounts by its auditor. ELWA has robust finances and has prepared financially for the future procurement work and other risks.

Though historic governance arrangements are in place, governance structures can only go so far without a clear understanding of the purpose they serve. Though they are clearly organised, structured and planned for, the team found that the value of ELWA meetings, and the anticipated outcomes, is not universally well understood, and as such sense of purpose and engagement can suffer in places. 

Coupled with the sense of ‘churn’ mentioned earlier in the report, there is a risk that the audit trail on decision making could suffer as a consequence. 

A refreshed governance structure which installs the importance, extent and full responsibility of the individual members roles on ELWA will enable robust engagement and ownership of decisions and will be crucial given the scale and pace required for the new contract procurement. There are robust foundations in place at ELWA which have served it well in the past, but this now must be updated for the current much changed landscape and work ahead.

Comparing structures to other commensurate authorities may be beneficial to ELWA.

There are highly experienced and competent staff involved with ELWA. The peer team heard of examples where ELWA Officers have acted in the best interests of ELWA separately from their partner authority roles. There is no suggestion that lines are blurred in places due to the shared nature of roles between ELWA and the partner authorities, even though they are ELWA officers that have shared responsibilities and accountabilities both to ELWA and the partner authorities.

It is important to note that the peer team did not see any evidence or hear of any cases of individual ELWA staff acting in any way that could be perceived as improper or biased, however the team noted that there was a perception from a few of interviewees, both officer and member, that the current arrangements meant that they could be. The team picked up on some friction between the partner authorities though – of a largely historical nature, which will need to be addressed quickly.

Though work has been delivered to articulate the ‘Joint Waste Strategy’ that ELWA members are signed up to, this is comparably modest at present compared to what is happening in other parts of the country. For example, the agreement is to be “environmentally benign” . The team thought the Boroughs should push for more ambitious climate outcomes, and activity and plans around ‘reuse’. However, the shared working undertaken to get this joint strategy in place should provide a good foundation for further joined up work to come. There is a sense that the current contract has not provided much impetus for change. However, there is now a collective welcome opportunity to break from these historic restrictions.

ELWA members need to agree a clear vision for what they want to get out of the new contract, not just in terms of practical delivery, but also what social or environmental outcomes they want to prioritise. For example, Greater Manchester Combined Authority as a number of social value measures linked to its waste contract. This will involve prioritising how highly different aspects of a potential contract rank e.g. how heavily cost is weighted vs. other factors, like carbon footprint, and understanding what the agreed trade-offs are.

Though the new contract procurement offers a clear catalyst to push this shared agenda forwards, there is further work the four boroughs may wish to do together that may fall outside of the remit of the contract, and it will be worth exploring what other options for joint working might be e.g. shared food waste collections, ‘reuse’ hubs, and so on. The proposed ‘Joint Waste Strategy Committee’ featured in this reports’ recommendations would provide a way of exploring this; as mentioned, building from the existing strategy work.

There is a very limited communications and engagement function at ELWA. Consequently, there is no real ELWA ‘brand’ or shared identity and narrative​. Though there is a sense that this has not really been needed or sought from members in the past, in order to keep pace with the changing times – including greater social media scrutiny – this could now benefit from expansion and improvement.

To take this on, ELWA could explore recruiting its own dedicated communications officer, sharing a Communications resource with one or more of the member authorities, or building capacity into of the existing team.

Engagement with the wider community, including how the work of ELWA fits into the climate agenda and adds wider social value is not evident, despite growing public interest in this area, and perhaps this could form part of any new communications engagement strategy in the run up to the award of new contract/s.

There is a clear link between waste reduction and the environment, which could be well capitalised on by ELWA members, with three of the four boroughs having declared a climate emergency. It was clear to the peer team that there is untapped political capital from the outcomes ELWA partners could potentially achieve together.

Without harnessing the opportunity that ELWA – and particularly the new contract –represents, there is a risk that resident demand and expectations around climate action will outstrip what ELWA is able to support if it has not sufficiently prepared.

The ELWA area’s recycling rate has historically been low, and the way the current contract is structured means there is little incentive for the constituent boroughs to drive improvement on this. The minimum recycling performance standard for ELWA is 35 per cent though this was agreed by City Hall, it contrasts with the Mayor of London’s standard of 50 per cent[1], though this is attributed to the current and forecast socio-demographic mix of the four borough areas of east London. However, the peer team note that this is now moving in an upward direction and is on target to achieve contract target. ELWA’s diversion from landfill is seen as very good, with less than one per cent of waste going to landfill.

There is currently a heavy reliance on Renewi separating recycling from the residual waste stream by the Mechanical Biological Treatment (MBT) process and from bulky waste processing. The future for recycling, and any related targets the four boroughs wish to seek, will need to form a key part of the new contract procurement, so that more can be done here. The same will be true of food waste collection. ELWA Members need to be kept fully abreast of how different technologies impact on their recycling performance and how Government legislation may impact them collectively, as well as individual waste collection authorities.

Equally, ELWA should further consider how much of its waste output ultimately travels by road, in order to address its carbon footprint and offset. Questions like this and others will start to become powerful considerations moving forward in the current and evolving landscape.  

Across the boroughs, Reuse and Recycling Centre performance is also improving, though this offer is relatively underdeveloped when compared with other authorities. There is much good practice in terms of reuse, particularly working with the voluntary and community sector, across the country, that could provide inspiration to ELWA’s members.

Relationships between Renewi and ELWA are cordial and respectful, despite the contract now being considered ‘onerous' and running at a loss for Renewi.

Preparation for the procurement is clearly under way, and the peer team note that:

• The Infrastructure and Projects Authority (IPA) has assessed ELWA’s procurement preparations (including securing value from the assets paid for under the IWMS) and its overall assessment placed ELWA on the second-best rating in its five-point system in 2021. In March 2022 the IPA reviewed key documents and discussed general progress, concluding that it did not need to hold a further formal review until Spring 2023.
• In October 2021 DEFRA/WIDP undertook a Contract Management Review and found ELWA to be making significant progress, and that the process for contract expiry was well understood, that appropriate governance was in place and that there was a strong working relationship with the Operator.
• An external technical adviser has been appointed, and the procurement of both legal and financial advisers is at an advanced stage. A Procurement Programme Manager is being recruited, and budget provision for increased procurement activity has been made.
• The PACE (Procurement and Contract Expiry) officer board has been established.

Waste procurement by statutory waste disposal authorities, of the size of ELWA, is a lengthy, complex and detailed process. With the sum of the issues noted in this reportit was the belief of the peer team that ELWA is behind where it should be at this point in time. However, this time can be made up if actions are taken forward at pace and recognition of the importance of ELWA as a key player and partner in the East London landscape is firmly established.

It is recognised that senior political and managerial leadership will want to consider, discuss and reflect on these findings.

Both the peer team and LGA are keen to build on the relationships formed through the peer challenge.

In the meantime, Kate Herbert, Principal Adviser for London, is the main contact between your authority and the Local Government Association. Kate is available to discuss any further support the council requires: [email protected]