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Guernsey reviews waste funding due to losses

With a review of how Guernsey’s waste strategy should be funded underway, the Channel Island’s treasury lead says high prices for bin sack stickers could drive “negative behaviours”.

Guernsey introduced its pay-as-you-throw scheme in 2019

Currently, the island’s waste services are funded by a household standing charge and a ‘pay-as-you-throw’ system, which sees residents pay for stickers for bags for residual waste.

Waste services are managed by Guernsey Waste, a company run by States of Guernsey, the island’s parliament and government.

This year’s budget shows Guernsey Waste anticipates making a £3.3 million loss for 2022.

Deputy Mark Helyar, a member of the island’s policy and resources committee and Guernsey’s treasury lead, told the BBC this week that Guernsey Waste should not be run as a “business” but as a “public service”.

On Thursday(20 January), Deputy Helyar told letsrecycle.com that he believes Guernsey Waste cannot currently make a profit because of reasons including “capital depreciation” and high charges for the stickers driving “negative behaviours in disposal of waste”.

“The corporate structure is, in my view, an unnecessary cost and otiose,” he said.

“If we know that the service will lose money, it is cheaper and applies more financial rigour – in Guernsey at least – to run it with a budget as with other non-profit public services, rather than to have several unnecessary layers of governance.”

Arm’s length

Deputy Helyar told letsrecycle.com that Guernsey Waste fell into a group of operating utilities intended to be run at “arm’s length” from the island’s government, assuming and taking responsibility for their own risk – including what he termed the “moral hazard” associated with losses – and ultimately generating returns for the government.

The corporate structure is, in my view, an unnecessary cost and otiose

  • Deputy Mark Helyar

In return, Deputy Helyar said, these utilities companies operate without direct government control. “They are companies with independent boards.”

Deputy Helyar said: “In these circumstances, the previous track record of several of such entities is that they make losses and then regularly turn to government looking for unknown levels of financial support.

“The government then has to pay to capitalise businesses where it does not have control, and which have additional layers of civil service oversight and corporate costs – including non-executive directors – who are not necessary in a structure which is never likely to break even.

“This happens without planning or direct control from government, which is not a sensible way for us to run budgets and public finances.”

Comprehensive review

A budget statement for 2022 published in October 2021 showed Guernsey Waste anticipated making a loss of £3.3 million this year, “due to the increase in recycling and a greater than forecast decrease in general waste”.

St Peter Port, the capital of Guernsey

The States’ Trading Supervisory Board has been conducting a comprehensive review of the operational and financial performance of Guernsey Waste.

The budget says the States’ Trading Supervisory Board intends to propose a long-term pricing strategy for Guernsey Waste in “early 2022”.

A spokesperson for States of Guernsey told letsrecycle.com they expected the review to be published in the next three months.

The spokesperson told letsrecycle.com they did not want to comment on Deputy Helyar’s views as they did not want to prejudice outcome of the review.

However, they confirmed States of Guernsey was reviewing how it funded the waste strategy “overall” as opposed to the pay-as-you-throw element, which, they said, “proved very effective”.

Guernsey

Guernsey, one of the Channel Islands located between the English and French coastlines, is a self-governing British Crown dependency with a population of more than 60,000.

States of Guernsey claimed the amount of residual waste it collected halved after it introduced the pay-as-you-throw scheme

The island introduced its pay-as-you-throw scheme in 2019, requiring residents to place stickers on all household residual waste put out for collection (see letsrecycle.com story).

Six months after it introduced the scheme, States of Guernsey claimed the amount of residual waste it collected had halved (see letsrecycle.com story).

Guernsey currently sends it residual waste to Sweden as refuse derived fuel under a contract with Norwegian-owned waste fuels specialist Geminor, first agreed in 2016 (see letsrecycle.com story).

According to States of Guernsey documents, the island collected 24,779 tonnes of domestic waste and had a household waste recycling rate of 72% in 2020.

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