King's Lynn incinerator: Plans for £500m scheme abandoned

Artist's impression of waste incinerator The incinerator scheme faced widespread opposition from MPs, local councils and residents and was called in by the government

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It has been confirmed a £500m contract for a waste incinerator is to be terminated, months after a warning that pulling out could "bankrupt" a council.

Norfolk County Council's plan for The Willows incinerator at King's Lynn was first given permission in 2012.

But it faced widespread opposition from MPs, local councils and residents.

At an extraordinary council meeting, it was decided to terminate the project, even though it leaves the authority facing financial penalties of £30m.

Analysis

As the debate drew to a close the leader of the Liberal Democrats, Dr Marie Strong declared this had been a long and torturous journey.

It has been and it isn't over yet.

The council has a month to come up with £8m of extra savings and, long term, it will have to find a way of making up the entire cost of pulling out of this contract.

It is estimated today's decision will cost every household in Norfolk £200 and, if that's not enough, the council now has to draw up and cost a new environmental waste policy.

The political fall out from this is enormous.

Labour will blame the Local Government Secretary Eric Pickles for forcing them to make this move and any job losses or future cuts will be laid at his door.

Mr Pickles will have to explain why it has taken him so long to reach a decision and why, even now, he cannot say when he will be in a position to decide.

The Conservatives will try to blame Labour for pulling out of the contract too soon, but they appear to be desperately divided.

Tory MPs celebrated the decision to drop the incinerator, while Tory councillors were whipped to support it, but even then some chose not to vote at all.

The incinerator may be dead, but the fall out from it will linger for a long time to come.

The council said the decision was due to failure to secure satisfactory planning permission.

Members voted 49 to 29, with one abstention, to recommend that cabinet should terminate the contract at an estimated cost of £30.26m.

That sum comprises compensation to development partner Cory Wheelabrator of £20.3m, contractor public inquiry costs of £1.6m and exchange rate and interest rate related costs of £8.36m.

These would be met through a £19m contingency reserve, £3m from the council's 2013/14 under-spend and £8m from general reserves.

Price Waterhouse Coopers had warned that pulling out later would incur further legal and other costs.

'A reckless scandal'

During a four-and-a-half-hour debate, Labour leader George Nobbs blamed Local Government Secretary Eric Pickles' delay in approving the scheme for the situation the council faced.

Start Quote

It's incredible that I'm voting to spend £30m on nothing”

End Quote Steve Morphew Cabinet member for finance

He also said that the withdrawal of a £169m Waste Infrastructure Grant meant the scheme no longer represented value for money.

The meeting heard delays to the contract were also costing the council £144,000 a day, and that promised savings of over £250m guaranteed over its 23 years when compared to the cost of landfill would have disappeared by June this year.

The council's UKIP group leader Richard Coke said: "We were in a hole so, I thought 'Let's stop digging.' This has been a reckless scandal."

Brian Watkins, deputy leader of the Liberal Democrats, said it was the final battle in what had been "an inglorious moment for the authority".

Conservative Jason Law, who represents Freebridge Lynn division, referred to a referendum on the incinerator held by West Norfolk Council.

"When 65,000 people vote against a scheme you have to listen to them," he said.

Steve Morphew, cabinet member for finance, said: "It's incredible that I'm voting to spend £30m on nothing. I voted for it with a heavy heart."

The Conservative group maintained that the incinerator remained value for money and voted for the contract to continue.

They also questioned the administration, an alliance of Labour, Lib Dems and UKIP members supported by the Greens, on what alternative policies they had to deal with the county's mounting waste.

The council said it had £19m in reserves to cover the cost of withdrawing from the contract but that the remaining £11m would have to be found through savings.

'No firm solution'

Henry Bellingham, Conservative MP for North West Norfolk and an opponent of the scheme, welcomed the decision.

"We have been saying for the last six months there are other ways of dealing with Norfolk's waste," he said.

Cory Wheelabrator, the council's development partner, said it was extremely disappointed.

"We, and the industry, have also made it clear to government that planning delays to major infrastructure projects are costly," said a spokesman.

"The delay to that planning decision has resulted in considerable costs to all parties.

"The fact still remains that there is no firm solution for the long-term management of Norfolk's waste, despite considerable time and expense being devoted to a solution that was viable, deliverable and would have created hundreds of jobs."

Norfolk's cabinet will consider the options at its meeting on 12 May.

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