Westminster approved £7.97m extra on 26 August, taking its Mandela Way depot to £13.5m. Ground conditions drove the rise, and the site is in Southwark.

Westminster City Council has more than doubled the budget for the depot that will house its electric bin lorries. The approved figure was £5.549m. It is now £13.519m.

The extra £7.970m was signed off on 26 August 2026 by the Cabinet Member for Value for Money and Finance. It comes out of the council’s capital contingency pot, which stands at £76.151m across the five years of the Capital Strategy 2026-27 to 2030-31.

The depot is at Mandela Way, and it is not in Westminster. The site sits in the London Borough of Southwark, off the Old Kent Road, about two miles east of Westminster’s southern boundary at Millbank. The report’s own header records the wards affected as “N/A, out of borough”. Westminster has held the leasehold since 2001 and bought the freehold in 2021.

Why the cost rose

The report is unusually direct about the reasons, and they are mostly ground and design rather than inflation. It lists:

  • a “more developed understanding of the site’s complexity”
  • evolving design requirements
  • “unexpected subsurface ground conditions” found after extensive investigation, which “forced substantial revisions to the foundations and drainage across the site”
  • decisions taken to mitigate delivery risks

The original £5.549m budget, the report says, “was based on a limited understanding of the site complexity and full project requirements”.

Time has gone too. The programme float “has been fully absorbed, and there is no remaining delivery contingency”. Completion is now forecast for July 2027. The report blames delays to planning, design changes, a pause to run a value engineering exercise, and additional groundworks and archaeology.

Planning permission for the depot was granted on 2 April 2026.

What the money buys

Mandela Way is currently an open yard. The finished depot is to provide:

  • storage for 38 large electric refuse collection vehicles
  • storage for 11 small to medium vehicles
  • staff welfare facilities, an administrative office and vehicle maintenance
  • electric vehicle charging infrastructure
  • a dedicated training room, three times the workshop space at the council’s existing Landmann Way depot, and permanent washdown facilities

The vehicles are a separate line. There is an approved budget of £18.6m for the electric fleet that will be based there, on top of the depot cost. The council already bought around 40 electric refuse collection vehicles in July 2023, and those are housed at Landmann Way, within 3km of the new site.

Mandela Way depot budget, approved against revised Chart of Westminster City Council's Mandela Way waste depot budget. Previously approved capital budget 5.549 million pounds. Additional budget approved on 26 August 2026, 7.970 million pounds. Revised total 13.519 million pounds. A separate approved budget of 18.6 million pounds covers the electric fleet to be based at the depot. The extra money is larger than the original budget Capital budget for the Mandela Way waste depot, Westminster City Council, at 26 August 2026. Previously approved £5.549m Approved on 26 August £7.970m Revised total £13.519m A separate approved budget of £18.6m covers the electric fleet to be based at the depot. The extra £7.970m comes from the council's capital contingency, £76.151m over five years. Source: Westminster City Council Cabinet Member Report VFM26-14, 26 August 2026. Graphic by The Westminster Post
The £7.970m added on 26 August is more than the £5.549m originally approved for the whole scheme.

Why the council is building it at all

This is not primarily about bins. It is about the next waste contract.

Westminster’s current waste and recycling contract with Veolia expires on 15 September 2027. The replacement contract starts the following day, and tendering opened in December 2025. The council’s argument is that bidders will only come forward if the council supplies the depots itself.

The report puts it plainly. Delivering Mandela Way “is essential to achieving depot self-sufficiency for the Council, thereby enabling non-incumbent bidders to tender for the new Waste and Cleansing contract”. Without a competitive tender, it says, “there is a risk the council may pay more for waste collection and street cleansing services in future contracts”.

Market feedback quoted in the report says contractor interest “remains dependent on the availability of well provisioned local depots”, in what officers call “a very limited market”.

The council names its own weak spot

The most striking passage is in the legal section, and it is a criticism of the council’s own procurement route.

Logan Construction is on site already, doing demolition and site investigation under an enabling works contract, and has been developing the design under a Pre-Construction Services Agreement. It was appointed through the PAGABO Major Works Framework as a single supplier call off. It has now submitted a price for the main works.

That is a standard two-stage approach. But the report states: “The main drawback of the two-stage approach is the lack of competitive pressure at the price submission stage.”

The mitigations officers list against that are benchmarking by consultant AtkinsRéalis, a fixed overhead and profit margin agreed with Logan, a fixed and final fee, and a commitment from Logan to seek three to five subcontractor quotes for works packages where possible. The council is also weighing a performance bond, which it estimates would cost between £40,000 and £100,000 and would cover about 10% of the contract value if the contractor failed.

It could still go up

Officers do not claim the £13.519m is the end of it. The report lists risks that could push costs higher:

  • ground or soil problems beyond what the current investigations assumed
  • further changes to the detailed design
  • a longer construction period
  • “the inflationary consequences of events in the Middle East”

It expects that risk to reduce as prices are finalised in autumn 2026. It also notes the other end of the argument: if the project is abandoned now, everything spent so far becomes abortive and has to be charged to revenue.

Part B of the report, containing further financial detail and commentary on the main works contract, is exempt from publication under paragraph 3 of schedule 12A to the Local Government Act 1972, which covers financial and business affairs.

What it means for you

  • This is capital money, not your bin day. Collections do not change because of this decision. Ours are set out on the Westminster bin collection days page.
  • It comes from contingency, so it is money not spent elsewhere. The £7.970m is drawn from a £76.151m pot meant to cover unforeseen capital pressures across the whole five-year programme. That pot is now £7.970m smaller.
  • The date to watch is 16 September 2027. That is when the new waste and cleansing contract starts. The depot is forecast to complete in July 2027, which leaves about two months of margin and no programme float behind it.
  • Nothing is built in Westminster. The depot is in Southwark. The nearest thing to a local effect is the fleet: about 40 more electric refuse vehicles working Westminster streets instead of diesel ones.
  • The next decision is the main works contract award, delegated to the Executive Director of Finance and Resources. The report anticipated it in August 2026. It does not appear in the council’s published decision register for July or August 2026.

Our Westminster council tax and budget gap story sets out the wider financial position the contingency sits inside.

Sources