Cabinet Members at Derby City Council and Derbyshire County Council have decided to withdraw from a long-running project to fix and bring a waste treatment centre into use at their respective Cabinet meetings today (Wednesday 23 September 2026).

Following a comprehensive review, officers from both councils recommended that the best option to protect the interests of council tax-payers was to decommission and dispose of the Derby and Derbyshire Waste Treatment Centre in Sinfin and seek alternative longer-term arrangements for the disposal of the city and county’s household waste.

The review was launched in May following a procurement process which concluded the market was unable to offer a solution for fixing and operating the facility on terms that provided sufficient protection for council tax-payers against potentially significant costs and risks in the future.

Leader of Derby City Council Councillor Nadine Peatfield said:

Today, Derby City Council and Derbyshire County Council have taken an important decision about the future of the Derby and Derbyshire Waste Treatment Centre. 

 This is a project that has been part of Derby's story for almost 20 years. It has been complex, it has faced significant challenges, and it has already cost a substantial amount of public money.

When we took control of the Council, we inherited this project and a set of difficult circumstances that were not of our making. We said we would look at the evidence, explore every realistic option and make the decision that best protected Derby residents and council taxpayers. We have done exactly that.

While the technology could potentially have been made to work, we could not secure commercial terms that gave the councils sufficient protection from the significant financial and technical risks involved. Having carefully considered all the options available, both councils have agreed that withdrawing from the project is the right course of action.

Around £147 million has already been spent jointly on this project, and we have a responsibility to make sure that we do not expose residents to further unnecessary risk simply because money has already been committed. 

Our focus now is on securing reliable long-term waste treatment arrangements for Derby, protecting taxpayers, and carefully considering the future of the site to ensure it delivers the best possible outcome for local communities. That is what today's decision allows us to do.

Leader of Derbyshire County Council Councillor Alan Graves said:

This is not a decision that has been taken lightly.  

It’s a decision we’ve taken following an extensive review, having considered every realistic option – and it’s the most responsible course of action, based on the robust evidence available today, to protect the future interests of Derby and Derbyshire residents.

The harsh reality is that this project has already cost a lot of public money which cannot be recovered.

But evidence from the latest review demonstrates that further commitment to the project can no longer be warranted on commercial, financial or risk grounds. 

In simple terms, we have reached the point where the evidence no longer supports continued investment in the project. We have tested the market, explored alternative approaches and reviewed the options again. And based on the evidence, we cannot be confident that spending more taxpayers' money would lead to a successful outcome.

Putting my personal scepticism towards the project aside, this is a complex project which dates back more than 20 years and has suffered a number of setbacks which were out of the control of the two councils.

While myself and the Leader of Derby City Council inherited circumstances which were not of our making, our focus has always been on making sure that the future use of public funds provides value for money for residents.

It was necessary for us to complete a rigorous process to ensure the decisions we take now are in the best interests of Derby and Derbyshire’s residents in the future.

Now, we must move forward with a clear direction, to minimise future risks and costs while continuing to secure reliable arrangements for treating Derby and Derbyshire’s waste.

The rapid review considered a number of alternatives for delivering the rectification project, alongside options which were previously ruled out. This work concluded that decommissioning the waste treatment centre offers the best overall balance of cost, risk and deliverability.

The councils will now begin planning the decommission and disposal of the facility and start making arrangements for the ongoing disposal of Derby and Derbyshire’s waste and recycling when the contracts with current providers end, mostly in October 2027.

Total expenditure on the project jointly by Derby City Council and Derbyshire County Council stands at £147.33m to date and the councils are progressing an application to Government to treat this amount as capital expenditure in accountancy terms. 

Background to the project

The project to build a facility to treat household waste that residents in Derby and Derbyshire either could not or chose not to recycle began in 2006. This was in line with national government policy and guidance at the time directed at supporting councils to develop large-scale waste treatment projects to divert waste from landfill.

In 2009, Resource Recovery Solutions (Derbyshire) Ltd (RRS) - a partnership between infrastructure firm Interserve and waste management company United Utilities (which became Shanks and then was later renamed Renewi) – was awarded the contract to manage waste that residents in Derby and Derbyshire either could not or chose not to recycle, and design, build, commission, and operate the waste treatment centre. RRS was supported by a specialist supply chain which collectively provided expertise in construction, waste management and waste treatment.

A key characteristic of the design of the centre was the integration of multiple interdependent processing systems into a single waste treatment facility using highly complex engineering. It was designed to sort and dry waste, then heat the waste to produce a gas which would then be burnt to produce electricity. 

The project suffered a number of setbacks over the years which were out of the councils’ control including:

  • July 2016 – the technology provider for gasification equipment installed in the facility went bankrupt during the construction of the waste treatment centre, significantly reducing the availability of specialist technical support, expert knowledge and engineering resources.
  • September 2018 – During the commissioning process, the facility was unable to pass acceptance tests which needed to be achieved before it could be certified by an independent specialist as complete. 
  • April 2019 – When issues affecting the project remained unresolved, the councils started proceedings to compel the banks which loaned money for the project to either step in or find a suitable substitute contractor. The lenders served a ‘no liquid market’ notice on the councils – meaning that, in their opinion, there were no suitable substitute contractors. The councils chose not to dispute this notice and the Project Agreement terminated automatically on 2 August 2019. 
  • August 2019 onwards – Technical investigations to determine action needed to fix issues affecting the facility began, with input from the companies that originally designed, supplied or in some cases commissioned the major items of equipment installed within the facility. But their input was substantially impacted by international travel restrictions imposed during the Coronavirus pandemic, resulting in significant delays to the completion of the technical review work.

Following termination, the councils took the following steps to:

  • Carry out a process, known as an Options Appraisal, which adopted principles consistent with Government guidance and public-sector business case development methodology to identify, evaluate and compare potential options which would determine the future of the facility. Specialist advisers with expertise in waste infrastructure, engineering, finance, procurement, commercial arrangements and project appraisal supported the councils through this process and, following detailed assessment, it was concluded that two options warranted more extensive evaluation through a Full Business Case process. In November 2021, following a survey to assess the condition and capability of the facility, the councils agreed to develop business cases for two options to either rectify defects and use the facility or close the facility and dispose of the councils’ waste using a third party.
  • Develop a detailed and thorough business case which included a significant amount of additional information and analysis which was not available at the time of the Options Appraisal, such as additional condition surveys and the programme of essential works needed to get the facility up-and-running. Taking into account all of the evidence, and acknowledging that neither option was risk-free, the Full Business Case concluded that the option to fix and operate the waste treatment centre should be adopted as the preferred option and that a procurement exercise should be carried out to test whether there was the appetite and expertise within the commercial market to rectify the facility. In February 2023, both councils’ Cabinets agreed to the recommendation to progress to the next stage of development the option to fix and operate the facility – on the basis that it was the most viable and cost-effective option that would give the councils more certainty over the cost of dealing with household waste in the future. This decision was not taken on the basis that rectification was guaranteed to succeed and was not an unconditional commitment to complete the project regardless of future circumstances. It reflected the conclusion that fixing and operating the facility was the best option at that point in time, provided that a suitable contractor could be found who could demonstrate that the remaining technical, commercial and financial risks could be managed to an acceptable level. 
  • Establish decision-making structures and processes to ensure that future decisions remained evidence-led and proportionate.
  • Carry out soft market testing throughout 2023 which confirmed there was capability, capacity and appetite in the market to deliver the project.
  • Negotiate a settlement figure – known as the Adjusted Estimated Fair Value (AEFV) – with RRS’ administrators as they were contractually obliged to do. In July 2023, the councils resolved to accept a settlement and pay £93.5m to the administrators, working on behalf of the lenders, for the facility. This reflected the future value of the long-term waste management contract. If a sum had not been agreed through negotiation, the dispute would have been resolved through the courts, and formal litigation – a lengthy process with unknown outcomes and additional costs.
  • Launch a procurement process to identify a private-sector partner capable of undertaking detailed due diligence, validating the condition of the waste treatment centre, developing a rectification strategy, implementing agreed improvements and ultimately operating the facility over the long term. In March 2025, three bidders, which later reduced to two, were taken through to the next stage of the process known as ‘Competitive Dialogue’ - structured discussions designed to provide equal treatment of all three companies to clarify, specify and enhance their proposed solution to fix and operate the facility.

While feedback from the procurement process was that the technology at the facility was viable and the facility could be rectified, the councils were unable to agree commercial terms with the bidders that met the councils' requirements – particularly in relation to where responsibility would sit should unforeseen technical issues emerge during later stages of rectification or operation – and neither bidder submitted a final tender. As a result, the procurement closed in May 2026, and the councils began a rapid review of future options for the project.