East Cambridgeshire District Council is scrambling to restructure its new Trading Company in order to avoid breaking the law when it takes the district’s waste collection service back in-house next April.
The council is allowed to award contracts to its own Trading Company without seeking outside bids, but only if at least 80 per cent of the Trading Company’s work is done for the council.
The council thought that all the work being done by the Trading Company’s housing development arm, Palace Green Homes, contributed to the 80 per cent requirement. But in a huge embarrassment for the council, it’s been advised that this isn’t the case.
As a result, the Trading Company is set to carry out far less than 80 per cent of its work for the council this year. And that means that in its present form it won’t be allowed to take over the waste contract on 1 April 2018, which was awarded to it by the council without other bids being sought.
All this leaves a red-faced council rushing through an urgent (and as yet unspecified) restructure of the company to try to avoid being caught without a legal waste collection service in six months’ time.