Two Gloucestershire councils will decide this week whether to establish a joint company to run their waste services, in a move they claim will save them a combined 700,000 a year.
The cabinets of Cheltenham borough council and Cotswold district council will each meet tomorrow (October 13) to discuss the plans for the company, which they claim would allow them to pay for their waste services at cost.
They contrasted this with the alternative, which they claimed would involve funding profit margins for privately-owned waste contractors. Cheltenham currently runs its waste services in-house, while Cotswold has a collection contract with SITA UK which ends in July 2012.
Because of this, Cotswold expects to make the bulk of the savings around 570,000 of the 700,000 due to the company replacing its outsourced service. A spokesman for the council told letsrecycle.com this was because it would eliminate the commercial profit margin required by a contractor. Instead, he said the new company will recharge the councils the cost of operating the services without any profit added.
If the plans are approved, the company would be launched in April 2012, when Cheltenham will go live with the new arrangements, which would involve its existing operational services staff moving to the new, as-yet-unnamed company. Staff in Cotswold currently working for SITA would do the same in August 2012.
While councils are increasingly running joint waste services, this is understood to be one of the first instances of local authorities joining forces to establish a separate company to provide waste and recycling collections.
Cotswold has described the proposals as innovative and by no means common place, although East Lindsey and South Holland councils in Lincolnshire established a company known as Compass Point this year to handle HR, finance, payroll, IT support, revenues and benefits and customer services.
Services
For Cheltenham, the new company would be responsible for the following waste services: waste collection; kerbside recycling collections; organic waste collections; servicing neighbourhood recycling sites; and, operating the Swindon Road recycling centre.
It would also handle street cleaning, grounds maintenance and fleet management and maintenance.
For Cotswold, its responsibilities would include: waste collection; kerbside recycling collections; organic waste collections; servicing neighbourhood recycling sites; and, street cleaning.
Under the new arrangement, Cotswold plans to add plastic bottles to the list of materials collected for recycling at the kerbside. It stressed that the cost of adding the new material would be minimised because a new fleet with the correct vehicle specification for plastics was already expected to be purchased as part of the establishment of the company.
Commenting on the plans, Cheltenhams cabinet member for sustainability, councillor Roger Whyborn, said: In the long run, the development of a modern waste collection service controlled by the two authorities will enable us to reduce the amount of waste going to landfill and to further increase the amount of waste we recycle.
Cllr Whyborn contrasted the new proposals favourably with the private sector alternative, claiming: The governance and financial management arrangements envisaged for the company will ensure greater efficiency and tighter financial control with both councils paying for the service at cost instead of funding profit margins of privately-owned waste contractors. This will contribute to achieving overall cost reduction targets.
His counterpart at Cotswold, councillor David Fowles, cabinet lead for environmental issues, added: Our current waste contract with SITA ends next year and we have been eager to obtain an environmental service which guarantees taxpayers the best value for money and the provision of a much requested kerbside plastic bottle recycling service in the Cotswolds.
Savings
Outlining exactly how savings would be made, the Cotswold spokesman explained that, as well as the elimination of profit margins that an outside contractor would require, several other areas would yield reduced costs.
These, he said, would include the service efficiencies which result from delivering a shared service, such as one vehicle servicing and maintenance depot and fewer spare vehicles being required to replace vehicles that are off the road.
Income will be increased by optimising the value received for recycled materials, he added.
Gloucestershire councils
A report being considered by Cheltenhams cabinet tomorrow also raises the potential for other councils in Gloucestershire to join the company, which it said could provide further savings. In particular, Tewkesbury council has been mooted in local media as a potential partner in the company.
Commenting on the potential for this to happen, a spokesman for Cheltenham council told letsrecycle.com: We do have an existing arrangement with Tewkesbury to share some key operational staff; they did not feel that it was the right time to commit to the local authority company, but we will be keen to look at options for other councils to join in with the company as it develops.
The company is described in the report as a critical catalyst for a Gloucestershire Waste Partnership, bringing together all the countys collection authorities and the county council, which acts as disposal authority.
According to the report, this would unlock significant savings when existing external waste management contracts expire, with consultancy Eunomia involved in work to identify what savings can be made.
The Gloucestershire Waste Partnership is expected to be established in 2012/13.
Service changes
Currently, households in Cheltenham receive alternate weekly collections with residual waste collected one week using a wheeled bin, and recycling collected the next week in a green box. They also receive weekly kerbside food waste collections and can sign up to a subscription green waste service.
Cotswold also operates an alternate weekly service, with residual waste collected using either a wheeled bin or council-issued grey refuse sacks. The other week sees recycling collected using a sack for card and box for other dry recyclables. As with Cheltenham, food waste is collected weekly.
Commenting on whether this would change if the new company was formed, the Cheltenham spokesman said: Residents will not see any changes in the service they receive though we will be looking at any opportunities to use the joint local authority company to increase recycling opportunities.
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