ESA debunks ‘illusion’ of in-house savings

The trade body, which represents private firms in the waste sector, claims that the projected savings to local authorities for bringing their waste services in-house are often “inaccurate” and do not account properly for risk transfer under an outsourced solution.

Campaign

Last week, ESA launched a campaign – “Delivering best value through competition” – which ESA said challenges some of the “myths” around outsourcing waste services.

The campaign is to highlight advantages that councils can gain when they take advantage of competition through procurement of a private sector contract.

Writing in his monthly chairman’s comment, ESA chairman Stewart Davies, said: “Projected savings from in-house and Teckal solutions not exposed to competition are often an illusion. They don’t account properly for risk transfer under an outsourced solution.”

Launch

A spokesperson for ESA confirmed that the campaign was launched last week but few details have yet been released.

The campaign comes as more councils are looking to bring services in-house, often with the intention of making cost savings and allowing more flexibility over the contracts.

Recently, a number of authorities have awarded contracts to council-owned companies. Last week, letsrecycle.com reported that Oxford city council has turned its direct services operation into a social enterprise and can now bid for more commercial work (see letsrecycle.com story).

Oxford

Oxford city council explained it can make more money through the wholly-owned social enterprise which it has called Oxford Direct Services Ltd (ODS). Similar paths have been taken in Bristol and Liverpool.

In 2016, Bristol city council awarded a 10-year contract to, Bristol Waste Company – a business set up by the authority – to provide integrated waste collection and disposal services across the city (see letsrecycle.com story).

The decision in Oxford was welcomed by trade union Unite. Stephen Davis, Unite branch secretary, said: “This is a positive step in the right direction and consolidates on the visionary step taken a number of years ago to trade out of the misguided austerity measures forced on local authorities by the government. As a result of the trading, which brings much needed revenue into the council, it has been possible to maintain services and protect jobs. Our members of Unite have benefited from this, with no compulsory job losses, unlike many other councils that embarked on outsourcing and slash and burn strategies.”