Derbyshire councils agree to dispose of waste centre after £147.33m of expenditure
Cabinet members at two Derbyshire councils have agreed to decommission and dispose of an ill-fated and costly controversial waste treatment centre scheme after more than £147 million has already been spent jointly on the project.
Derbyshire County Council and Derby City Council had stated in August 2024 that they had addressed ‘key issues’ to pave the way to fix and operate the Derby and Derbyshire Waste Treatment Centre, in Sinfin, Derby, after the project had been plagued by a series of setbacks since the scheme was first launched in 2006.
But each of the councils’ Cabinet members officially decided, at respective separate county and city council meetings, on September 23, that their councils withdraw from the long-running, costly project to fix and bring the waste treatment centre into use – effectively cutting their losses in a bid to protect taxpayers from ongoing continued costs.
Reform UK Derbyshire County Council Leader, Cllr Alan Graves, said: “This is not a decision that has been taken lightly. It’s a decision we’ve taken following an extensive review, having considered every realistic option – and it’s the most responsible course of action, based on the robust evidence available today, to protect the future interests of Derby and Derbyshire residents.
“The harsh reality is that this project has already cost a lot of public money which cannot be recovered. But evidence from the latest review demonstrates that further commitment to the project can no longer be warranted on commercial, financial or risk grounds.
“In simple terms, we have reached the point where the evidence no longer supports continued investment in the project. We have tested the market, explored alternative approaches and reviewed the options again. And based on the evidence, we cannot be confident that spending more taxpayers’ money would lead to a successful outcome.
“Putting my personal scepticism towards the project aside, this is a complex project which dates back more than 20 years and has suffered a number of setbacks which were out of the control of the two councils.
“While myself and the Leader of Derby City Council inherited circumstances which were not of our making, our focus has always been on making sure that the future use of public funds provides value for money for residents.
“It was necessary for us to complete a rigorous process to ensure the decisions we take now are in the best interests of Derby and Derbyshire’s residents in the future.
“Now, we must move forward with a clear direction, to minimise future risks and costs while continuing to secure reliable arrangements for treating Derby and Derbyshire’s waste.”
Following a comprehensive review, officers from both councils recommended that the best option to protect the interests of council tax-payers was to decommission and dispose of the waste centre and seek alternative longer-term arrangements for the disposal of the city and county’s household waste.
National Government policy and guidance at the time of the project’s launch in 2006 was directed at supporting councils to develop large-scale waste treatment projects to divert waste from landfill.
The scheme was designed to sort and dry waste and then heat it to produce a gas which would then be burnt to produce electricity but it suffered a number of setbacks which the councils say were out of their control.
In July, 2016, the technology provider for gasification equipment installed in the facility went bankrupt during the construction of the waste treatment centre.
And in September, 2018, during the commissioning process, the facility was unable to pass acceptance tests and in April, 2019, amidst unresolved issues, the councils unsuccessfully tried to compel banks which loaned money for the project to step in or find a suitable substitute contractor and a Project Agreementwas terminated on August 2, 2019.
Technical investigations were subsequently affected by international travel restrictions imposed during the Coronavirus pandemic resulting in significant delays.
In November 2021, following a survey to assess the condition and capability of the facility, the councils agreed to develop business cases to either rectify defects and use the facility or close it and dispose of the councils’ waste using a third party.
In February, 2023, both councils agreed to fix and operate the facility on the basis that it was the most viable and cost-effective option that would give the councils more certainty over the cost of dealing with household waste in the future.
Derbyshire County Council and Derby City Council had awarded a contract in 2009 to Resource Recovery Solutions – which was a partnership between infrastructure firm Interserve and waste management company Renewi – to manage the councils’ residual waste, design, build, commission, and operation of the waste treatment centre.
But the county council revealed that by July 2023 both councils had agreed to pay a share of a total £93.5m out-of-court settlement to RRS’s waste management team’s administrators to resolve a dispute after the local authorities had terminated a contract with the waste management team to manage the waste facility.
Both councils resolved in July 2023, to pay RRS to protect council tax-payers from the risk of further significant costs after RRS’s administrators had originally claimed they were owed £187m, according to the county council.
The county council stated this total settlement sum of £93.5m had been shared by the councils in accordance with an agreed split with £36.57m paid by the city council and £56.93m paid by the county council.
Long-awaited plans to finally fix and operate the temporarily-closed Derby and Derbyshire waste treatment facility further stalled when the county and city councils fell out after Derbyshire County Council issued an invoice to Derby City Council in January, 2024, for £93.9m plus VAT to recover its share of the new project costs which the city council disputed.
However, the councils successfully resolved this dispute and once again looked at fixing and operating the facility.
But the councils were unable to agree commercial terms that met their requirements during a procurement process with bidders to operate the facility despite feedback that the technology at the facility was viable.
Subsequently, the procurement process closed in May 2026, and following the review the councils have now opted to withdraw from the scheme after amounting a total expenditure on the project, so far, of £147.33m.
The scheme was overseen by Labour and more recently Conservative county council administrations before the current Reform UK county council was elected in May 2025.
Labour Derby City Council Leader, Cllr Nadine Peatfield, said: “Today, Derby City Council and Derbyshire County Council have taken an important decision about the future of the Derby and Derbyshire Waste Treatment Centre.
“This is a project that has been part of Derby’s story for almost 20 years. It has been complex, it has faced significant challenges, and it has already cost a substantial amount of public money.
“When we took control of the council, we inherited this project and a set of difficult circumstances that were not of our making. We said we would look at the evidence, explore every realistic option and make the decision that best protected Derby residents and council taxpayers. We have done exactly that.
“While the technology could potentially have been made to work, we could not secure commercial terms that gave the councils sufficient protection from the significant financial and technical risks involved.
“Having carefully considered all the options available, both councils have agreed that withdrawing from the project is the right course of action.
“Around £147 million has already been spent jointly on this project, and we have a responsibility to make sure that we do not expose residents to further unnecessary risk simply because money has already been committed.
“Our focus now is on securing reliable long-term waste treatment arrangements for Derby, protecting taxpayers, and carefully considering the future of the site to ensure it delivers the best possible outcome for local communities. That is what today’s decision allows us to do.”
The councils considered a number of alternatives during the ‘rapid review’ for delivering the rectification project, alongside options which were previously ruled out.
This work concluded, according to the councils, that decommissioning the waste treatment centre offers the best overall balance of cost, risk and deliverability.
The councils will now begin planning the decommissioning and disposal of the facility and start making arrangements for the ongoing disposal of Derby and Derbyshire’s waste and recycling when the contracts with current providers end, mostly in October 2027.
Total expenditure on the failed project jointly by Derby City Council and Derbyshire County Council stands at £147.33m to date and the councils are progressing an application to Government to treat this amount as capital expenditure in accountancy terms.