The auditor Veritau explained that the council’s inability to determine whether a business was operating and having its waste collected led to a “potentially significant loss of income”.
In 2020/21 – the financial year covered by the audit – the shortfall in York’s commercial waste income was £600,000-£700,000, Veritau said, approximately half its normal income.
The council told letsrecycle.com that some of the shortfall stemmed from its decision not to charge businesses for collections if they did not produce waste during the lockdowns.
The government’s Covid-19 compensation scheme will cover three quarters of the shortfall, but the council must pay the remaining £236,690.
Veritau reviewed York’s commercial waste collection processes alongside the income the council received from waste collection and disposal.
It found “significant gaps, weaknesses or non-compliance” and called for improvements to the service’s “system of governance, risk management and control”.
York has already taken steps to address the issues identified by Veritau, and a review of how to manage the service is underway.
Formed in 2009, Veritau is a shared service group owned by nine local authorities in Yorkshire and north east England.
‘Support’
In a statement, James Gilchrist, the council’s director of environment, transport and planning, said York provided a “broad range” of support to businesses in response to the pandemic.
He said: “The fluidity of businesses trading or not became very confused, with businesses opening and closing several times in response to the Covid restrictions.
“The audit has identified that the service found it difficult to keep track of which businesses were trading in these unique circumstances and exposed weaknesses in the systems.
“The commercial waste service has this year experienced a shortfall in income from businesses.
“The vast majority of this shortfall was down to the council not charging businesses that didn’t receive a service.
“However, the government has met the vast majority of this shortfall through the sales, fees and charges compensation scheme.
“Businesses have reported their appreciation for the flexibility the council showed in only charging for the services they received.”
Covid-19
Veritau’s audit report says York’s management team were “aware” of issues with the commercial waste service before the pandemic and requested that the audit take place to establish their “scale and complexity”.
Overall, Veritau said, it “appeared” the service’s systems and processes in place were functioning to a “reasonable extent” before the pandemic.
However, the auditor found customer accounts and invoices were still being reviewed almost a year after the initial lockdown began because the service was unable to determine whether a business was operating and having its waste collected.
Veritau said this meant the service may not have received all its income for the waste collected during this period.
This “may have been made worse”, the auditor said, by the system of spreadsheets the service used rather than having a waste management information system in place to record customers and the charges for collections.
Ownership for setting commercial waste charges has not been assigned to a single person, Veritau said, and there is “confusion” over who is responsible.
Veritau said York collected some commercial waste income in cash, though cash-paying customers were not recorded on the finance system.
And, Veritau found that the waste transfer notes were “not always” renewed on time.
York
According to the audit report, 1,600 businesses in York have contracts to have their waste collected by the council.
The service found it difficult to keep track of which businesses were trading in these unique circumstances
- James Gilchrist, City of York council’s director of environment, transport and planning
These businesses produce approximately 140 tonnes of waste per month, and the council collects approximately £1.4 million a year from commercial waste collections.
Once collected, commercial waste is taken to a transfer station at Harewood Whin, before being taken to the Allerton Waste Recovery Park, which consists of a mechanical biological treatment plant, an anaerobic digestion plant, and an energy from waste plant.
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