Councils warned over consortium contracts

The comments came during a panel session at last week’s RWM exhibition and conference, titled: “If waste really is a ‘resource’ how much money is it generating for your council?”

Chaired by Durk Reyner, vice-chair and policy officer at the Local Authority Recycling Advisory Committee, panellists included South London Waste Partnership strategic director Frank Smith, Staffordshire council’s waste policy officer Chris Jones, Linda Crichton, head of resource management at the Waste & Resources Action Programme (WRAP) and councillor Nicholas Daubney of King’s Lynn and West Norfolk council.

During the session, panellists discussed the steps that local authorities could take to maximise the revenue that they are able to recoup from recyclable materials that are collected from residents.

Value

Commenting on the factors that can affect the value that local authorities are able to achieve from the sale of material, Ms Crichton said that there can be some issues, such as market conditions, which cannot be controlled by authorities. However, she said that there are some areas where authorities can influence the price that they receive.

“What is your approach to risk? It can certainly be tempting to transfer as much as possible to a third party but that could have downsides. Contractors will cost that risk into pricing strategies.”

She also commented that higher quality material is likely to achieve better prices for local authorities, and highlighted that there are different contractual arrangements councils can consider when negotiating with contractors.

“There are ownership issues and different strategies local authorities can play. Some pass ownership to the contractor and put the responsibility on them to sell materials. Some arrangements are that the company may collect material but the local authority retains ownership of that material.”

Consortium

Panellists were also asked their views on consortium contracts, and whether groups of local authorities should join together to sell in bulk and ‘drive the market price’ for recyclable material.

Mr Reyner, who also serves as head of environment at Welwyn Hatfield borough council, said that in his experience large council framework deals can be unappealing to reprocessing firms due to the risks involved to private firms.

He said: “As Herts authorities we sell around 100,000 tonnes altogether but reprocessors have told us that is too much. They would be scared of losing that work because it can have a drastic impact for their plants.”

Meanwhile, Mr Smith stated that ensuring the quality of material collected across several authorities is consistent can be tricky, adding: “The politics of how you collect with consistent quality across numerous councils is very difficult.”