At the CIWM AGM meeting, I heard about how one aspect on which all the main parties agree - cost reductions in the public sector - could have an impact in our sector. The current Chancellor has already identified that waste collection and disposal services are one of the key areas where the £550m of efficiency savings he identified in his last budget will come from. But with the other main parties also seeking savings, I thought it would be interesting to take a look at what this might mean for household waste.
The opportunity to realise efficiencies in councils through joint working represents a win/win situation for the public and private sectors. For the public sector, joint collection schemes would yield higher volumes of material and drive better prices; each of the participating authorities could achieve operational savings; and there would be lower contract management costs resulting in efficiency savings in each of the authorities. For the private sector, the benefits are that collaborative procurement has a tendency to increase the quality of materials collected because residents can recycle the same materials in the same way, even if they live, work and undertake recreational activities across different political boundaries.
Joint collection schemes would yield higher volumes of material and drive up prices
Collaborative procurement is not a new concept. There are already some best practice case studies of authorities coming together in the UK to procure products such as collection containers or bags, and the speakers at the CIWM meeting focused on income opportunities through joint contracts for collection of commingled recyclable materials and other services such as communications and awareness-raising campaigns.
Waste is a valuable commodity and by pooling materials to create larger volumes, through a number of authorities working in partnership, there is potential to increase the value received for those materials. Ten councils in the Hertfordshire Waste Management Partnership are aiming to generate an extra £560,000 in revenue each year by jointly sending all their plastic, cans, glass and Tetra Pak cartons to two recycling firms.
Many typical responses from authorities which have not experienced this sort of joint contracting before are focused on the operational and practical aspects, such as which entity takes the contract, what happens if each authority is collecting different materials in different ways, or how to manage the inclusion of a number of authorities who are in different existing contracts with unique end dates.
These issues are relatively easy to overcome. There is no need for a joint venture to be formed, it is possible for one authority to take the lead, and for that organisation to have back-to-back agreements with each of the other participating organisations. And it is possible to ask the market to respond to a contract opportunity that covers different materials and/or collection mechanisms and/or brings new parties into the contract as their existing agreements end.
So, at a time when we all have to consider efficiencies and ways to make money, doesn’t it make sense for local authorities to get smarter in the way that they procure and start acting more like a business in the face of the efficiency saving requirements?
Dee Moloney is director of LRS Consultancy