Could greater focus by the Government on commercial waste and recycling be the key to improving the UK’s stalling recycling rate? With the circular economy (CE) package bringing commercial waste that is similar to household waste under the ‘municipal’ waste definition, improved recycling performance by businesses could provide a much-needed boost to overall recycling rates.
Business improvement districts (BIDs) that work with commercial waste and recycling companies have found that collective agreements are providing multiple benefits for all parties.
First Mile works with more BIDs than any other recycling company in the UK. It has around 20 on its books, including PaddingtonNow, which recently renewed its contract for a further two years. PaddingtonNow has 306 members, including hotels, offices and food establishments, and those serviced by First Mile represent more than 1,600 tonnes a year of recyclable material.
BIDs run for a maximum term of five years and must be re-elected and established after that period, with any contracts renewed. As part of its renewed partnership with First Mile, PaddingtonNow will be subsidising food recycling services for its members to improve on its recycling rate of 86%.
New technologies are also due to be piloted to reduce contamination and measure the air quality effects of using just one round of trucks to collect all the waste – now possible due to the proximity of First Mile’s new sack sorting facility in Park Royal.
Chris Peers, BID manager of PaddingtonNow, said the BID had developed “a great level of mutual trust” during its nine years of working with First Mile: “Our partnership makes it easy for our members to recycle more of their waste, and it provides access to a good customer experience. Having a high density of members using the same provider also has huge benefits for local air quality by consolidating collections in the area on just one vehicle.”
Bruce Bratley, founder and chief executive of First Mile, told MRW: “Local businesses obviously want a partner that increases recycling but also provides the service in a consolidated way, so that there is less waste on the streets, fewer vehicle movements and less environmental impact from collecting that waste and recycling with a single or limited number of providers.”
Bratley explains that working with BIDs “fitted with [First Mile’s] philosophy of serving businesses in a dense city centre environment with a great service and very high levels of recycling at a low cost”. He points out that Westminster Council, which Paddington falls within, has a household recycling rate of only 18%. But the mayor of London’s environment strategy, published in May, set a 65% recycling target by 2030.
“We are well over the 65% already in Paddington because we are working with lots of businesses to provide a recycling service, but also because 33% of our customers are using a food recycling service,” he explains.
First Mile’s sack sorting facility was an investment made in the past 12 months that allows it to reduce the impact of its service delivery and improve air quality by having fewer vehicles on the road. The facility, where colour-coded sacks are sorted and consolidated, allows it to collect them mixed on its vehicles. This means it does not need to send two vehicles or a one with multiple compartments, which is less efficient.
Bratley adds that each BID contract will have a “slightly different nuance on it” in terms of whether it subsidises the recycling collection.
“Some have a subsidy, some have a free allocation, like a starter allocation and then [businesses] have to pay, others put the money into marketing and then the customer has to pay for the service – it depends very much on what the BID would like to do and how they want to influence the behaviour of their customers,” he says.
First Mile’s IT systems allow it to factor in such nuances as free allocations or discounts for specific businesses, and also generate reports for individual businesses and the central BID management company.
Bratley says it “actively works” with BIDs but the approach it is taking is really with partnerships. “We are interested in anybody who wants to partner in city centres. It might be a formal BID, it might be a street association, it might be a tenancy group, it might be a landlord.
What is a BID?
Business improvement districts (BIDs) originate in north America, with the first one being established in Toronto in 1970. The initiative began after a handful of businesses got together after seeing the potential of pooling their resources to make the local area more attractive as a leisure, shopping and tourist destination.
BIDs were introduced in the UK as part of the Local Government Act in 2003 and came into force in 2004. The first BID was in Kingston, Surrey, and today the number of BIDs across the UK stands at around 300, with most located in towns or cities.
Businesses within a defined commercial area pay 1-4% of their rateable value (the value ascribed to their business premises) on top of their business rates. This money goes directly to the BID management body, which funds a variety of business improvement projects in the local area.
To establish a BID, a proposer needs to submit a proposal to the council along with a business plan. Once the authority has ratified the proposal, the BID proposer will put it to a ballot.
In order to pass, the majority of businesses who would be subject to the levy (if approved) must vote in favour of it. A majority of votes must be achieved in terms of overall rateable values.
Once approved, the BID body is established. This is often a private company but can be in partnership with the local authority. The maximum period that a BID levy can be charged is for five years, and a new ballot is required after that.
Source: Business West
“We have a partnerships team working on environmental partnerships, customer partnerships and air quality partnerships. It is really about leveraging groups of customers and neighbourhoods to have a positive environmental impact through freight consolidation, increased recycling, food recycling and reduced impact of service delivery.”
The positive environmental effects mentioned by Bratley mirror the aims set out in the mayor of London’s environment strategy. Proposal 7.2.2.a in the strategy states: “The mayor will support efforts to consolidate commercially collected waste services to improve recycling performance, reduce congestion, improve the public realm and improve air quality.”
“The idea of a BID being a super-contractor is that we equip it with a deal that enables it to hold the contractor to account.”
It cites a successful pilot study in London’s Bond Street BID that looked at introducing a single waste contractor to run collections to businesses in a designated area. This result-ed in a 94% fall in waste vehicle movements. As a result, Transport for London (TfL) has developed a free toolkit that helps neighbouring businesses to consolidate their waste collection services, save money and reduce vehicle movements.
According to the strategy, the mayor will work with TfL and BIDs to promote TfL’s freight, delivery and servicing plan, which includes the waste contract consolidation tool-kit. It also said the mayor would “look at the feasibility of a commercial waste framework in London” as well as working with Defra and waste companies to improve commercial waste data, which would “allow opportunities for consolidated services to be identified more easily”.
Bratley adds: “We need to get a 77% business/commercial recycling rate in London if the mayor is going to hit his 65% by 2030 because their best case assumption is that they are only going to get the household waste recycling level up to 50%, and the gap is going to be made up by a much higher level of commercial waste recycling.”
Outside London, it is less common for such arrangements between BIDs and recycling and waste collectors, says Peter Jones, consultant at Eunomia. The consultancy has recently worked with the Bristol City Centre BID to help it arrange a new waste collection service. The Bristol BID selected Veolia through a competitive bidding process, designed by Eunomia, which looked at both price and quality of service. Veolia will collect a range of material streams, with residual and mixed recycling collections available seven days a week. As more levy payers join the scheme, additional services such as evening collections will be made available.
Businesses are not obliged to join the scheme, but it is hoped the success of similar schemes elsewhere will be repeated. For example, in neighbouring Bath, more than 60% of businesses in the BID opted into a sim-ilar waste collection contract, which is held by Suez.
Keith Rundle, Bristol City Centre BID development manager, said: “The new service delivers great value for our levy payers and we are confident that the needs of our local businesses will be met. It will improve the streets of Bristol city centre for everyone by helping to address some key issues around waste being left out overnight.”
Bristol City Centre BID will monitor how Veolia performs against a number of key performance indicators, which include reducing the number of missed collections and increasing recycling rates. The BID will also work with the waste firm to resolve any service issues and ensure that prices stay low during the lifetime of the contract.
Jones explains that the contract Eunomia worked on in Bristol is slightly different to those used by other BIDs: “The aim has been to rely on market power rather than subsidy, and to provide a comprehensive service rather than a totally recycling-focused service. The emphasis for us is much more on can we get to the point where you can start to reduce vehicle movements, where you can offer a higher quality of service because somebody has a bigger share of the market.
“So you can start to justify providing collections at different times of day or having one vehicle that is largely focused on the BID area.”
He adds that whenever it carries out surveys of commercial waste service users, there is always “a lot of grumbling about the frequency of missed collections, difficulty contacting your supplier when you need them, lack of information about where the problem has arisen, and a feeling of powerlessness as a customer to do very much about it”.
“The idea of a BID being a super-contractor is that we equip them with a deal that enables it to hold the contractor to account. One of the critical clauses we try to introduce is that if, on reasonable grounds, it is dissatisfied with the service or if it reaches its termination date, the contractor is required to surrender the customers and the BID can tender for somebody else to take their place. So it gives the BID a lot of market power.”
“It is really about leveraging groups of customers and neighbourhoods to have a positive environmental impact through freight consolidation, increased recycling and reduced impact of service delivery.”
For Bristol, it asked the market what it could provide by preparing a service description and inviting tenders, which were evaluated against criteria to determine the best suited to the contract. Jones says that BIDs are quite unique in acting as an intermediary and co-ordinator that can bring together businesses in such a collaborative way.
“One of the reason that BIDs are attractive to waste contractors is that, if you can run a vehicle very efficiently in a BID area, you can potentially have a price advantage on that vehicle which is already heavily utilised when it goes outside that area,” Jones explains, adding: “BIDs also have very good links into local businesses, and can reach and persuade customers in a way that is difficult and expensive for contractors to do”.
Jones adds that for particular materials streams, such as food waste, market consolidation is very important because it will bring down significantly what can be prohibitive collection costs. He believes the Government needs to think more about commercial waste due to the CE package bringing it into the definition of municipal waste.
“There will be a need to think about how businesses can be incentivised and encouraged to switch to higher levels of recycling – and one of the ways to do that is to bring a bit more co-ordination to the collection market,” he says.
“We have seen Scotland and Northern Ireland legislate for separate food waste collections for those businesses that produce significant amounts of food waste. We could well see Wales move in the direction of a more general requirement to separate recycling being placed on businesses.
“If the market would stay as it is, then that would impose some cost on business. But if you can achieve better co-ordination, then you have got the potential to achieve those benefits without putting extra costs on businesses.”
Baker Street gets smarter on recycling
coffee cup recycling
A partnership between Veolia and the Baker Street Quarter Partnership aims to minimise vehicle emissions by having fewer waste collection providers on the streets, while providing local benefits including reduced traffic congestion and discounted service costs for businesses who take part.
Veolia has been involved with neighbouring BID, Heart of London Business Alliance, which has seen a reduction of more than 800 vehicle collection movements in the area each week.
It also introduced an on-street recycling scheme for take-away cups called ‘Good To-Go’, which has diverted around 100,000 cups for recycling, and hopes to offer similar developments for the Baker Street Quarter Partnership.