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Councils take over £2bn waste PFI contract

Lancashire County Council and Blackpool Council have taken over ownership of their 25-year private finance initiative (PFI) waste contract, just three years into the £2bn deal.

Waste from across Lancashire goes to two waste processing facilities at Thornton and Farington, which were introduced in response to the central government landfill tax, which encourages councils to recycle more waste and send less to landfill.

The facilities were developed by Global Renewables Lancashire Limited (GRLL), which currently run the sites under the PFI agreement – originally signed in 2007.

However, in a new move, the local authorities will take ownership and responsibility for running the two sites. And by taking ownership of the operating company Global Renewables Lancashire Operations Ltd (GRLOL), the staff who operate the facilities will remain working for GRLOL and continue to operate the sites.

The cost of terminating the 25-year contract has not been made public, but by ‘restructuring the financing for the sites’, the councils say they will jointly save more than £12m per year over what would have been the remaining 22 years of the contract.

County Councillor David Borrow, deputy leader of Lancashire County Council, said: “This agreement means both sites will continue to deliver a hugely important service for people across Lancashire, while the new funding arrangements contribute significantly to the £300m of savings the county council needs to make by 2017-18.

“It is a very good deal for the people of Lancashire.”

Councillor Amy Cross, Blackpool Council’s cabinet member for streetscene and the environment, added that the deal will allow the local authorities to maintain their current arrangements and continue to work towards improving recycling rates.

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