Cheshire Councils launch legal battle to reclaim £100m of PFI credits

CHESHIRE’s unitary councils are to seek Judicial Review against the Government’s decision to withdraw over £100m of support for a PFI scheme to dispose of Cheshire’s household waste.

The decision – taken by Cheshire West and Chester and Cheshire East Councils – followed legal advice from Leading Counsel and meetings with DEFRA officials.
The authorities’ legal advisors are likely to apply to the High Court for permission to issue Judicial Review proceedings.

The Leader of Cheshire West and Chester Council, Mike Jones, said: “We have decided to take this joint action because we believe that the methodology used by Defra to assess the merit of our scheme was seriously flawed.

 “Also, it is our opinion that the assessment process has underestimated the benefits which would accrue from that scheme.”

To date, the two councils have spent over £4.5m on a lengthy procurement process for the £850m, 25-year PFI scheme, which would have involved construction of a huge mechanical biological treatment plant at the former INEOS chemical works at Lostock Graham. The plant would handle 200,000 tonnes of waste per year.

The procurement process for the scheme, which was inherited from the legacy Cheshire County Council concluded in November when Viridor was appointed as the provisional preferred bidder. By that stage, however, DEFRA had already announced that it was withdrawing £100m worth of PFI credits from the scheme.

“We recognise the very real need for Government to make cuts to put this country back on a firm financial footing,” said Jones. “However, a considerable amount of public money has been spent on a four-year process and I believe we have a duty to our council taxpayers pursue this issue with Defra.” 

Cheshire East Leader, Wesley Fitzgerald, said: “Both councils believed that there was Government support for this scheme right up to the announcement that PFI credits were being withdrawn.

“Not only has much time, effort and money been wasted believing that we were approaching this issue in a manner which had government approval but this decision would take us back to square one.

“We are still in the position of having to find a sustainable method of disposing of Cheshire’s household waste over the next 25 years.”