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ESA sets out path to waste privatisation

Leading waste management companies have presented a case for switching responsibility for waste management from local authorities to the private sector.

This ‘privatisation’ could be the conclusion of one of the recommendations in a report from the Environmental Services Association (ESA), launched at a parliamentary reception in Westminster on 10 May.

The most radical proposal is a call for a new framework for producer responsibility that transfers the ownership of secondary materials from councils to product supply chains (see box).

ESA executive director Jacob Hayler said switching from the public to the private sector was “potentially the direction of travel”.

A new framework for producer responsibility which transfers resource ownership from local authorities to product supply chains

ESA recommendation

He later told MRW that the ESA would commission research to consider the different ways that could be achieved.

An ESA member suggested to MRW that one option could be for councils to lose responsibility for collection or disposal of waste, but they could compete in open tender against private operators for contracts.

The member added that such a strategy would match the aspirations of influential members of the Conservative Government to reduce the role of the public sector, including local government.

The expansion and extension of the producer responsibility framework is likely to be a critical mechanism in driving progress towards increased recycling and more circular approaches

Steve Lee, CIWM

In his speech, Hayler said: “Rising costs and depressed commodity markets are putting immense pressure on the sector, and urgent Government intervention is required to ensure the UK can continue to manage its resources in both an environmentally and economically sustainable way.”

He was asked by David Greenfield, managing director of consultancy Soenecs: “Are you suggesting that the private sector takes on the responsibilities of local authorities and funds it through producer responsibility?”

Hayler replied: “That is potentially the direction of travel we are going in. Assuming we remain part of the EU, we will have to meet the requirements of the circular economy package.

“Part of those responsibilities includes an increased focus on producer responsibility and the ’full cost recovery’ for existing [compliance] schemes.

“How far you go might depend [on circumstances]. But if you are going to ask the producers to face increased funding costs for these schemes, the quid pro quo is more control.”

We believe local authorities would still be involved in the actual collection of the materials

LARAC spokesman

Steve Lee, chief executive of the Chartered Institution of Wastes Management, said: “ESA’s report is timely and welcome, not only in highlighting the contribution of our sector to sustainable economic growth but also the opportunities and challenges that lie ahead.

”While fundamental change to the current model of household waste collection would be a complex and long term task, the report certainly echoes the growing consensus that the expansion and extension of the producer responsibility framework is likely to be a critical mechanism in driving progress towards increased recycling and more circular approaches.

”As well as encouraging more resource efficient product design and reduced life cycle impact, it could certainly be framed to better support collection infrastructure, the ‘value proposition for recycling, and the recovery of materials that more closely meet the needs of the market.”

A spokesman for LARAC said: “We believe that producers should bear the full costs of their products and this should go as far as the full costs of collection and treatment from the household.

”However we believe local authorities would still be involved in the actual collection of the materials – it is the funding of these collections that would see the big change, moving from council tax payer to producer.

”Local authorities have worked hard to make their services cost effective and are now able to provide producers a cost effective collection network alongside the private sector where services are contracted out.”

The report, Delivering Sustainable Growth: How the Resource and Waste Management Industry Benefits People, the Environment and the Economy, covered the sustainability of markets for secondary materials, producer responsibility, collection regimes and waste crime.

It sets out the scale of the resource management industry and its contribution to the economy, coming in the week that the Office for National Statistics reported an annual 10% growth in production output for businesses involved in waste collection, treatment and disposal activities. 

Recommendation 2: Introduce a new framework for producer responsibility which transfers resource ownership from local authorities to product supply chains

Transferring responsibility and funding of collection systems from local authorities to product supply chains would create incentives for waste producers to be involved in the design of collection systems which deliver materials that meet their own requirements, while reducing the financial burden on local authorities. As a result, this would create a climate for greater investment in reprocessing facilities which feed UK manufacturing.

Extended producer responsibility is integral to this. Existing schemes are failing to produce secondary materials of consistent quality, and a review is much needed to see how they can better encourage recyclability and use of recycled content.

New schemes should incentivise producers to:

  • reduce waste – both from their production processes and from the post-use arisings from their products
  • design products and packaging which are easier to recycle
  • design products and packaging which use higher quantities of recycled materials

This would help produce secondary materials of consistent quality which would drive resource efficiency, strengthen competitiveness, stimulate long-term investment and would make the system resilient to changing market pressures and drivers

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