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Huge waste deals are failing the stress test

Talk of austerity budgets may have diminished with the departure of David Cameron and George Osborne from Downing Street, but the impact of their policies is still being felt in town halls.

Since 2010, council budgets have faced cuts of at least 25% and departments responsible for management or collection of waste have more than borne their share of the pain.

In practical terms, straitened authorities such as Calderdale are prioritising refuse-derived fuel revenue above recycling, especially as they cope with lower revenue from weak markets for secondary materials.

Councils are also revisiting their existing long-term waste deals. The Greater Manchester Waste Partnership wants Viridor to agree more preferable terms for the country’s biggest contract. In these low-interest times, it could even be cheaper for the partnership to borrow the cash to meet termination penalties rather than carry on.

That is also why councillors in Sheffield are to re-tender the current arrangement with Veolia, less than half way through their 35-year deal. It is entirely possible that Veolia will come back with a less costly offer the council cannot refuse, but the councillors’ goal will always be to save money and they may look elsewhere.

The two parties have been here before.

In 2012 MRW reported exclusively that Defra officials used the Sheffield public-private partnership as a template for possible savings. The marriage survived that rocky spell, but it remains to be seen whether it will end in divorce. 

Whatever the outcome, we need Government recognition that Sheffield and Manchester are not alone in facing these stresses – and nor is an industry which employs tens of thousands of people.

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