URL: https://democracy.kent.gov.uk/ieDecisionDetails.aspx?ID=3038

Decision Maker: Cabinet Member for Environment

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: Proposed decision   That the Cabinet Member for Environment:   (a)    approve the use of capital budget and waste reserve funds to enable the construction of a new Waste Transfer Station at Junction 11 of the M20.   (b)    Approve that the developer contribution collection period be extended to 2040 to support the continued development of the site at Junction 11 of the M20.   Reason for the decision   -      Kent County Council has a legal duty under section 45 of the Environmental Protection Act (1990), as the waste disposal authority, to dispose of the waste collected at kerbside by the waste collection authorities (the districts) within its administrative boundaries. KCC does this by accepting the waste at a site known as a waste transfer station facility.  At the waste transfer station, waste collection vehicles deposit the separate waste streams into individual large bays.  To ensure haulage efficiency, it is then loaded on to artic lorries for onward transport to its final disposal location.    -      The waste infrastructure in Folkestone and Hythe (F&H) is currently insufficient to handle the amount of waste produced by existing housing levels. The development of Otterpool garden town will exacerbate this issue.KCC therefore needs to provide a new waste transfer station in the Folkestone and Hythe district to secure capacity for kerbside collected waste.KCC has been working with Folkestone and Hythe District Council for a number of years to secure a site and funding via the KCC capital budget and developer contributions to build the new facility.   -      A decision is sought for KCC to spend capital budget to proceed with building a new waste transfer station at junction 11 of the M20.  As well as capital budget, the project will utilise waste reserve funds to close the current budget gap and extend the developer contribution collection period to 2040, thus allowing continuation of development of the site at junction 11   Background   -      KCC currently has a temporary arrangement with a contractor (Veolia) at Ross Way, Folkestone, to provide an interim waste transfer facility until 2028. This facility is very small and cannot accommodate all the waste streams collected at the kerbside and therefore cannot meet the needs of Folkestone and Hythe District Council as the waste collection authority or KCC as the waste disposal authority.  As a result, food and residual (black bag) waste is currently tipped at the KCC waste transfer station in Ashford. This out of district tipping means that legally KCC must pay compensation to Folkestone and Hythe District Council.  This resulted in payment of tipping away fees to Folkestone and Hythe District Council (c.£87,000 in 2024/25) and is operationally challenging for all parties due to long queuing times and limits to the permitted tonnes of waste as set out in the Environmental Permit for the site.  It is not viable long term.   -      In 2019 a bid for capital monies for the development and delivery of a new waste transfer station for the Folkestone & Hythe district was submitted to KCC’s capital officer group (COG).  The bid was based upon costs to develop the recently opened Ashford waste transfer station and a site owned by Folkestone and Hythe District Council at junction 13 of the M20, which was to be sold to KCC at cost.  Funding for the project would comprise KCC capital monies as well as developer contributions collected by Folkestone & Hythe district. Developer contributions is a collective term used to refer to the Community Infrastructure Levy (CIL) and Planning Obligations (commonly referred to as ‘Section 106’ obligations). These are used to secure financial and non-financial contributions to provide infrastructure to support development and mitigate the impact of development on the local area.   -      Approval to plan status was given by capital officers group and feasibility work on the site at Junction 13 was undertaken.  However, this determined it to be unviable due to recently granted residential planning permission on half of the site.  Several rounds of site searches were subsequently undertaken between 2019 and 2022.  35 sites including Ross Way in Folkestone were investigated and discounted. The preferred site for the development was therefore concluded by KCC to be the site near Junction 11 of the M20.   -      In February 2024, KCC entered into a four-year option agreement to purchase this junction 11 site.  The Council has engaged with consultants to progress the project, which has reached outline design and planning submission.    -      A recent review of the budget has identified that the levels of developer contributions are below the levels that were originally profiled, leaving the project with a significant budget gap, compelling the Council to review and evaluate risk to determine the option that delivers value for money and to the requirements of the service.   Options   -      Option 1 Do nothing – pause project (not viable). The need for this project remains, however, with slower housing growth in Folkestone and Hythe, as evidenced by reduced developer contributions, this option considers the potential to pause the project.  This is not viable as it would not meet the delivery timescales required to enable KCC to continue delivering its statutory obligations.  Delay would also see increased costs through additional inflationary pressures and put existing infrastructure under more pressure, increasing the risk of whole service failure.   -      Option 2 Extend developer contribution collection period to 2045 to close gap (not recommended). Developer contributions forecasting is currently to 2030.  KCC has the ability to direct all Folkestone and Hythe District Council Community Infrastructure Levy (CIL) monies it receives to this project for as long as necessary,plus ensuring that S106 requests are made for waste infrastructure.  This option requires an extension of the developer contribution collection period to 2044/45, to bring in an additional £4.4M to close the budget gap. It is considered financially high risk and ringfencing CIL funding to waste for longer means other essential Council services will not be able to access this funding.     -      Option 3 Extend developer contribution collection period to 2040 and utilise waste reserve funds to close gap (preferred option).Extension of developer contribution collection period to 2040 to bring in an additional £3.5M is required.  This date is in line with the KCC housing led forecast published in 2021, providing more certainty over delivery.  KCC to forward fund these developer contributions plus fund remaining budget gap of £0.9M from waste reserve.  Capital borrowing remains at agreed £6.165M.  This option is considered to be financially, legally and politically low risk. It would enable delivery to meet operational requirements.   -      Option 4 Change to a design, build, finance, operate model (not viable). Following procurement advice, this option is discounted as the route to market is very limited due to the significant progress that has been made on the project already. The project is already at a detailed design phase, with planning submitted. Any operator that would take on the project under this option is highly likely to want to be involved in the design at an earlier stage, or at the very least review the design and potentially make changes to suit their operations, which would result in delay to delivery. The Council would also need to be very prescriptive over the tender as we only require £0.9m to be invested which does not make this an attractive proposition to the market. For these reasons, this option is discounted.   -      Option 5 Procure a mercantile facility to deliver the service (not viable).Consideration of a different delivery model has been made due to the development of a commercial waste transfer station at Otterpool quarry (2 miles west of the KCC junction 11 site).  A fundamental issue for KCC is that the quarry site does not have the correct permissions to accept KCC’s waste, as it can only accept certain types of commercial waste, thus excluding this as a viable option for the Council.    Proposed option: Based upon a thorough risk analysis as well as consideration of whole life and net present value costs, option 3 is the recommended option.  Option 3 represents the lowest overall risk to KCC and has no very high risk impacts identified.  In terms of service delivery and legal/commissioning risks, this option presents a very low risk to KCC.     How the proposed decision supports the Framing Kent's Future - Our Council Strategy 2022-2026   -      This project supports priority 2: Infrastructure for Communities.  This facility is required to support both the existing housing in Folkestone and Hythe as well as the planned garden town at Otterpool Park.  It will deliver a sustainable waste management solution for the area, allowing waste to be managed further up the hierarchy, contributing to increased recycling rates.    -      It will also support priority 3: Environmental Step Change as it will reduce carbon emissions by providing a more local facility than that currently used in neighbouring Ashford District.   How the proposed decision supports Securing Kent’s Future 2022 -2026: Securing Kent’s Future - Budget Recovery Strategy.pdf   -      Delivery of a waste transfer station in Folkestone and Hythe will allow a sustainable waste service to be provided.  It will allow KCC to move away from the current inadequate facilities, negating the need to pay high gate fees and tipping away charges.  KCC has secured developer contributions towards this project and utilised frameworks to ensure best value is achieved.   Financial Implications   -     The total project cost is £15.38M (of which c.£3M is land purchase). This is financed through the following funding streams: £6.165M KCC capital borrowing £0.9M from KCC waste reserves £8.315M developer contributions (£6.81M of which is forward funded by KCC waste reserves). -      A robust cost plan has been developed for the project by an independent quantity surveyor based upon the detailed feasibility and outline design works undertaken to date.  Work has been commissioned through existing frameworks to ensure value for money is achieved and financial risks are low. -      In addition to capital costs for building the facility, revenue costs for operating the new facility of £1.59m pa will be incurred.  To meet this requirement, £661k of these costs will be utilised from within the existing budget for current facilities/arrangements, with the remaining £929k included in the medium term financial plan (MTFP) in future years as a growth pressure. Financing costs for the element of the capital funding that relates to borrowing are included within corporate budgets. -      Spend to date on the project is £492,032.  Should the proposed decision not be progressed, these costs would become abortive.  

Content: Proposed decision   That the Cabinet Member for Environment:   (a)    approve the use of capital budget and waste reserve funds to enable the construction of a new Waste Transfer Station at Junction 11 of the M20.   (b)    Approve that the developer contribution collection period be extended to 2040 to support the continued development of the site at Junction 11 of the M20.   Reason for the decision   -      Kent County Council has a legal duty under section 45 of the Environmental Protection Act (1990), as the waste disposal authority, to dispose of the waste collected at kerbside by the waste collection authorities (the districts) within its administrative boundaries. KCC does this by accepting the waste at a site known as a waste transfer station facility.  At the waste transfer station, waste collection vehicles deposit the separate waste streams into individual large bays.  To ensure haulage efficiency, it is then loaded on to artic lorries for onward transport to its final disposal location.    -      The waste infrastructure in Folkestone and Hythe (F&H) is currently insufficient to handle the amount of waste produced by existing housing levels. The development of Otterpool garden town will exacerbate this issue.KCC therefore needs to provide a new waste transfer station in the Folkestone and Hythe district to secure capacity for kerbside collected waste.KCC has been working with Folkestone and Hythe District Council for a number of years to secure a site and funding via the KCC capital budget and developer contributions to build the new facility.   -      A decision is sought for KCC to spend capital budget to proceed with building a new waste transfer station at junction 11 of the M20.  As well as capital budget, the project will utilise waste reserve funds to close the current budget gap and extend the developer contribution collection period to 2040, thus allowing continuation of development of the site at junction 11   Background   -      KCC currently has a temporary arrangement with a contractor (Veolia) at Ross Way, Folkestone, to provide an interim waste transfer facility until 2028. This facility is very small and cannot accommodate all the waste streams collected at the kerbside and therefore cannot meet the needs of Folkestone and Hythe District Council as the waste collection authority or KCC as the waste disposal authority.  As a result, food and residual (black bag) waste is currently tipped at the KCC waste transfer station in Ashford. This out of district tipping means that legally KCC must pay compensation to Folkestone and Hythe District Council.  This resulted in payment of tipping away fees to Folkestone and Hythe District Council (c.£87,000 in 2024/25) and is operationally challenging for all parties due to long queuing times and limits to the permitted tonnes of waste as set out in the Environmental Permit for the site.  It is not viable long term.   -      In 2019 a bid for capital monies for the development and delivery of a new waste transfer station for the Folkestone & Hythe district was submitted to KCC’s capital officer group (COG).  The bid was based upon costs to develop the recently opened Ashford waste transfer station and a site owned by Folkestone and Hythe District Council at junction 13 of the M20, which was to be sold to KCC at cost.  Funding for the project would comprise KCC capital monies as well as developer contributions collected by Folkestone & Hythe district. Developer contributions is a collective term used to refer to the Community Infrastructure Levy (CIL) and Planning Obligations (commonly referred to as ‘Section 106’ obligations). These are used to secure financial and non-financial contributions to provide infrastructure to support development and mitigate the impact of development on the local area.   -      Approval to plan status was given by capital officers group and feasibility work on the site at Junction 13 was undertaken.  However, this determined it to be unviable due to recently granted residential planning permission on half of the site.  Several rounds of site searches were subsequently undertaken between 2019 and 2022.  35 sites including Ross Way in Folkestone were investigated and discounted. The preferred site for the development was therefore concluded by KCC to be the site near Junction 11 of the M20.   -      In February 2024, KCC entered into a four-year option agreement to purchase this junction 11 site.  The Council has engaged with consultants to progress the project, which has reached outline design and planning submission.    -      A recent review of the budget has identified that the levels of developer contributions are below the levels that were originally profiled, leaving the project with a significant budget gap, compelling the Council to review and evaluate risk to determine the option that delivers value for money and to the requirements of the service.   Options   -      Option 1 Do nothing – pause project (not viable). The need for this project remains, however, with slower housing growth in Folkestone and Hythe, as evidenced by reduced developer contributions, this option considers the potential to pause the project.  This is not viable as it would not meet the delivery timescales required to enable KCC to continue delivering its statutory obligations.  Delay would also see increased costs through additional inflationary pressures and put existing infrastructure under more pressure, increasing the risk of whole service failure.   -      Option 2 Extend developer contribution collection period to 2045 to close gap (not recommended). Developer contributions forecasting is currently to 2030.  KCC has the ability to direct all Folkestone and Hythe District Council Community Infrastructure Levy (CIL) monies it receives to this project for as long as necessary,plus ensuring that S106 requests are made for waste infrastructure.  This option requires an extension of the developer contribution collection period to 2044/45, to bring in an additional £4.4M to close the budget gap. It is considered financially high risk and ringfencing CIL funding to waste for longer means other essential Council services will not be able to access this funding.     -      Option 3 Extend developer contribution collection period to 2040 and utilise waste reserve funds to close gap (preferred option).Extension of developer contribution collection period to 2040 to bring in an additional £3.5M is required.  This date is in line with the KCC housing led forecast published in 2021, providing more certainty over delivery.  KCC to forward fund these developer contributions plus fund remaining budget gap of £0.9M from waste reserve.  Capital borrowing remains at agreed £6.165M.  This option is considered to be financially, legally and politically low risk. It would enable delivery to meet operational requirements.   -      Option 4 Change to a design, build, finance, operate model (not viable). Following procurement advice, this option is discounted as the route to market is very limited due to the significant progress that has been made on the project already. The project is already at a detailed design phase, with planning submitted. Any operator that would take on the project under this option is highly likely to want to be involved in the design at an earlier stage, or at the very least review the design and potentially make changes to suit their operations, which would result in delay to delivery. The Council would also need to be very prescriptive over the tender as we only require £0.9m to be invested which does not make this an attractive proposition to the market. For these reasons, this option is discounted.   -      Option 5 Procure a mercantile facility to deliver the service (not viable).Consideration of a different delivery model has been made due to the development of a commercial waste transfer station at Otterpool quarry (2 miles west of the KCC junction 11 site).  A fundamental issue for KCC is that the quarry site does not have the correct permissions to accept KCC’s waste, as it can only accept certain types of commercial waste, thus excluding this as a viable option for the Council.    Proposed option: Based upon a thorough risk analysis as well as consideration of whole life and net present value costs, option 3 is the recommended option.  Option 3 represents the lowest overall risk to KCC and has no very high risk impacts identified.  In terms of service delivery and legal/commissioning risks, this option presents a very low risk to KCC.     How the proposed decision supports the Framing Kent's Future - Our Council Strategy 2022-2026   -      This project supports priority 2: Infrastructure for Communities.  This facility is required to support both the existing housing in Folkestone and Hythe as well as the planned garden town at Otterpool Park.  It will deliver a sustainable waste management solution for the area, allowing waste to be managed further up the hierarchy, contributing to increased recycling rates.    -      It will also support priority 3: Environmental Step Change as it will reduce carbon emissions by providing a more local facility than that currently used in neighbouring Ashford District.   How the proposed decision supports Securing Kent’s Future 2022 -2026: Securing Kent’s Future - Budget Recovery Strategy.pdf   -      Delivery of a waste transfer station in Folkestone and Hythe will allow a sustainable waste service to be provided.  It will allow KCC to move away from the current inadequate facilities, negating the need to pay high gate fees and tipping away charges.  KCC has secured developer contributions towards this project and utilised frameworks to ensure best value is achieved.   Financial Implications   -     The total project cost is £15.38M (of which c.£3M is land purchase). This is financed through the following funding streams: £6.165M KCC capital borrowing £0.9M from KCC waste reserves £8.315M developer contributions (£6.81M of which is forward funded by KCC waste reserves). -      A robust cost plan has been developed for the project by an independent quantity surveyor based upon the detailed feasibility and outline design works undertaken to date.  Work has been commissioned through existing frameworks to ensure value for money is achieved and financial risks are low. -      In addition to capital costs for building the facility, revenue costs for operating the new facility of £1.59m pa will be incurred.  To meet this requirement, £661k of these costs will be utilised from within the existing budget for current facilities/arrangements, with the remaining £929k included in the medium term financial plan (MTFP) in future years as a growth pressure. Financing costs for the element of the capital funding that relates to borrowing are included within corporate budgets. -      Spend to date on the project is £492,032.  Should the proposed decision not be progressed, these costs would become abortive.   As Cabinet Member for the (Kent) Environment, I agree to:     PROCEED with option 3, which is to utilise waste reserve funds to close the budget gap and extend the developer contribution collection period to 2040, thus allowing the continuation of development of the site near junction 11 of the M20.   DELEGATE authority to the Cabinet Member for (the Kent) Environment to approve the capital funding for this project and to the Director of Infrastructure to approve the purchase of the land   DELEGATE authority to the Director of Environment and Circular Economy in consultation with the Deputy Leader of the Council and Cabinet Member for (the Kent) Environment, to take relevant actions, including but not limited to, awarding, finalising the terms of and entering into the relevant contracts or other legal agreements, as necessary, to implement the decision  

Date of Decision: October 30, 2025