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News analysis: Government sinks its clause into the waste management sector

It is an idea that can be traced as far back as Labour's 1997 election manifesto, but when the Clean Neighbourhoods and Environment Bill is finally passed through parliament, local authorities will no longer have to contract out their waste disposal functions.
Clause 47 of the Bill abolishes the requirement in the Environmental Protection Act 1990 for waste disposal authorities to hand over their disposal facilities to private companies.
Sir Paul Beresford, who helped draw up the 1990 act as a member of the then Conservative government, attacked clause 47 in the House of Commons last week.
Beresford, MP for Mole Valley, said: "[Waste disposal] is a very specialist area that involves huge capital costs generally. The contracts are long. The regulations and complications are intense and encyclopaedic. I am slightly worried that some mind-bogglingly dull local authority, of the wrong political complexion, will grab the provision with both hands and blunder in, with no competition, at great cost and great danger to its local people."
While Bereford's comments owe much to conjecture, the removal of local authorities' legal obligation to use waste management companies is clearly a significant turning-point for the sector.
The Government has presented clause 47 as something that will give local authorities greater flexibility and freedom in their waste management, helping them reach their landfill targets.
However, it is this issue of "flexibility" that has concerned the Environmental Services Association (ESA), the organisation that represents the UK's waste management companies.
ESA chairman Dirk Hazell said his organisation's main concern was whether it was going to remain possible for his members to invest in infrastructure.
He added: "You have got to have long contracts aligned to the life of the infrastructure if you want to have low rates of return on the money invested. There is clearly more risk with shorter contracts, which, as local authorities are no longer obliged to contract out at all, may be a result of this 'flexibility'."
Hazell also said that the UK's waste management sector needed a new medium-sized facility every week for the next ten years.
This equated to £16 billion investment per year.
He said that only the private sector could realistically provide that kind of investment, so Beresford's point on direct labour was also of great concern.
For others, Clause 47 and the flexibility it brings has been regarded as a purely positive move.
The Local Government Association (LGA) has outlined four major benefits to Clause 47:
• Greater flexibility in delivery of waste disposal services means more options for the delivering of landfill targets.
• It introduces greater competition in areas where only one contractor is interested and this will reduce costs for some local authorities.
• There is subsequently the potential for better value services.
• It brings greater opportunity to work with the community sector.
This flexibility also lends itself to the slightly unusual concepts of what a waste disposal authority should be.
An example of this is the story this week of Staffordshire Moorlands District Council's plans to give refuse collectors defibrillators, working as an auxiliary ambulance service (see page 6).
Under the Environmental Protection Act 1990, there was the provision that, in certain instances, local authorities could be exempted f

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