Issue details

Proposed decision

1.    CEASE activity related to key decision 25/00068 and halt the continuation of development of the Junction 11 waste transfer station scheme

2.    APPROVE option 5, the procurement and award of a Transfer Services contract to secure a commercial waste transfer solution through a compliant competitive process.

3.    DELEGATE authority to the Director of Environment and Circular Economy to undertake all relevant actions to facilitate the procurement process.

4.    DELEGATE authority to the Director of Environment and Circular Economy in consultation with the Cabinet Member for Environment, Coastal Regeneration and Public Health, 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: and

5.    DELEGATE authority to the Director of Environment and Circular Economy, in consultation with the Cabinet Member for Environment, Coastal Regeneration and Public Health, to award extensions of the contract in accordance with the relevant clauses within the contract.

Reason for the decision

KCC currently relies on a split transfer arrangement to manage kerbside waste arising from Folkestone and Hythe, using Ashford Transfer Station and a temporary contractual arrangement at Ross Way. Neither facility is capable of accepting the full range of materials or meeting operational requirements.

The contract at Ross Way will end in 2028, and there is a need to secure a compliant, resilient and long term solution to ensure continuity of statutory waste disposal services.

Key Decision 25/00068, taken in October 2025, previously approved the project and funding to build a waste transfer station on a site near J11 of the M20 in Folkestone and Hythe, subject to KCC being able to fulfil all of the requirements of the planning consent for this development.

Since October, there has been a key change relating to the discharge of planning conditions that impacts the previous key decision:

Planning permission for the development includes the need for additional land outside of the land parcel secured by KCC to accommodate tree screening and ecology requirements. Prior to the October 2025 decision being taken, Folkestone and Hythe District Council had confirmed that they would purchase this additional land and put in place appropriate ownership arrangements that would enable KCC to discharge its planning conditions, subject to the necessary approvals and agreements. Folkestone & Hythe District Council has been unable to secure that land within the timeframe required by KCC, meaning the planning conditions cannot be discharged and the development cannot proceed in its current form. Consideration was given to whether the screening and ecology requirements could be accommodated within the footprint of the KCC acquired site, however it was concluded that this is not possible within the space available. As a result of not being able to discharge the required planning conditions required under the previous key decision a review of the available options has been conducted.

This review and associated market engagement activity has identified commercial capacity to bulk and haul most of this material, therefore there is now a route to market through a compliant competitive process.

This proposed decision therefore replaces and updates decision 25/00068.

Background

-      As the Waste Disposal Authority, KCC has a statutory responsibility to arrange for the disposal of household waste collected by District and Borough Councils, known as Waste Collection Authorities. This is typically delivered through transfer stations where waste is received, bulked and transported to final treatment or disposal facilities.

-      Currently, waste from Folkestone and Hythe is managed through:

o    Ashford Transfer Station, operated by FCC Environment, manages food and residual waste

o    A temporary arrangement at Ross Way, Folkestone, operated by Veolia manages dry mixed recycling and street cleansing arisings.

-      Neither facility has sufficient capacity or capability to manage the full range of kerbside materials, resulting in operational inefficiencies, increased haulage distances and additional costs as both residual and food waste are transported outside the district. 

-      A previously approved proposal to develop a KCC operated facility within the district cannot proceed due to planning constraints as outlined above.

-      Market engagement carried out in May 2026 has identified that there is now commercial interest in and capacity to manage this material. The service will therefore be competitively procured through a flexible two-lot contract structure (with and without food waste), and the commissioning approach has been shaped by market feedback to ensure value for money.

-      The proposed contract will:

o        provide receipt, bulking and onward haulage of approximately 40,000 tonnes of material per annum;

o        be structured to allow flexibility across material types through a two-lot approach with and without food waste;

o        include KPIs, performance measures, environmental compliance requirements and social value commitments;

o        ensure no waste is sent to landfill; and

o        support operational efficiency and reduce unnecessary vehicle movements.

-      The contract term will consider the life cycle and investment in vehicles and plant, local government reform and the required continuity in service to ensure a reliable and consistent statutory service alongside best value principles.

-      Any extension will be considered based on performance and value for money. A benchmarking exercise would be conducted 18 months prior to any extension to assess ongoing competitiveness and service quality.

-      The contract will ensure that providers adhere to environmental legislation, permitting requirements and best practice is delivered.

-      Key risks to this approach include potential limited market competition including the ability for commercial contractors to secure the required planning permission to be able to accept food waste, sector cost inflation (particularly haulage) and compliance with environmental permitting requirements. These risks will be mitigated where possible through procurement design, contractual mechanisms and ongoing contract management. Local Government Reorganisation introduces uncertainty, which has been addressed through proposed contract flexibility

Options (including other options considered but discarded)

Option 1 - Do nothing (discarded)
Continue with or extend existing arrangements. This is not viable due to capacity constraints, operational limitations and the expiry of current arrangements in 2028.

Option 2 and 3 – Extend developer contribution collection periods to 2045 (option 2) or 2040 (option 3) to close the funding gap to develop the Junction 11 scheme (discarded)

Previously approved but no longer deliverable due to inability to secure the additional land required to satisfy planning conditions and the associated programme and financial risks.

Option 4 – Change to a design, build, finance, operate model (discarded)
Not viable due to the inability to secure the additional land required to satisfy planning conditions and the associated programme and financial risks.

Option 5 – Procure a commercial facility to deliver the service (recommended)

Previously discarded, however re-evaluation of the options since previous assessment and engagement with the market has identified commercial capacity to process some, if not all, of this material. The capacity of commercial providers to bulk and haul food waste is not yet developed but may come on stream later this year. Should it not be possible to procure a local solution for food waste, it has been concluded that transportation to neighbouring boroughs will be possible.

Following market engagement in May 2026 the recommendation therefore is to undertake a full procurement exercise to appoint a suitably qualified provider to deliver transfer services within the district. This provides a compliant, efficient and longer-term solution within the timescale required that ensures service continuity and value for money.

How the proposed decision supports ‘Reforming Kent’ Strategy 2025-2028:

This decision is compliant with the Strategic Statement and supports the delivery of Reforming Kent: Aim 2 - Objective 6: We will ensure there is an effective waste management and recycling service that is value for money and improves rates of recycling through a simpler and efficient process.

Financial Implications

-      The forecast cost of the Junction 11 scheme including the required land purchase was c£14.5m. It was proposed that £8.3m of this cost would be met long term through developer contributions although a significant proportion would have needed to be forward funded. £5.3m of this cost would have been met by KCC capital investment and the remaining c.£900k from the waste reserve.

-      The estimated contract value is based on approximately 40,000 tonnes per annum and the suggested market engagement rates which it must be noted are not guaranteed until the formal procurement of a contract is concluded.

-      The current annual budget for 2026/27 for the management of all waste streams for Folkestone and Hythe is £740.5k. This includes haulage and tipping away charges that are levied.

-      The forecast annual budget for 2027/28 based on the updated rates and assuming that a contractual solution for food waste is achieved is c.£1.553m. This reflects the anticipated increase in costs associated with transitioning to a more sustainable long-term waste management arrangement for Folkestone & Hythe. The increase is consistent with forecasts already incorporated within the Medium Term Financial Plan (MTFP) and is therefore expected regardless of the specific solution ultimately implemented.

-      If a contractual solution for food waste is not achieved then the forecast annual budget for 2027/28 increases to c.£1.729m.

-      Approximately £722k of previously incurred development costs will become abortive once the Junction 11 scheme ceases. These costs are currently unfunded. Avoiding further escalation of this exposure is a key consideration in the recommended approach.

-      If the most economically advantageous compliant tender exceeds the available budget, and there is limited scope to reduce costs due to the operational nature of the service, this would result in both an in-year, and year on year financial pressure. These pressures would be realigned in the MTFP with relevant offsetting savings or income requirements needing to be identified.

-      Cost pressures are anticipated to be related to:

o   Increase in costs across the haulage and waste sectors;

o   legislative requirements, such as Simpler Recycling.

-      These will be managed through procurement and contract mechanisms to achieve value for money.

-      Any tonnage fluctuation above or below the budget will be managed as part of the monthly financial monitoring process.

-      Additionally, the proposed procurement route may require up to £250,000 investment in infrastructure upgrades if food waste is excluded from the commercial contract. These upgrades are proposed at an alternative existing KCC site to enable food waste to be transported there and will attract tipping away charges albeit at a lower rate than currently due to the smaller volumes. It is intended that this cost will be met in full from the waste reserve, thereby avoiding any direct impact on the Council’s revenue budget

-      The procurement option results in higher ongoing revenue costs compared to a Council-owned facility but removes the requirement for significant upfront capital investment and associated delivery risk. Approximately £722k of development costs relating to the previous scheme will become abortive.