The findings of the survey have formed the latest edition of the Contracts Handbook, which sets out details for service contracts run by 32 London boroughs, 17 county councils, 75 metropolitan and unitary authorities and 173 shire districts.
Under new Best Value rules, councils no longer have to put their refuse or recycling services out to tender. With some councils instead seeking to keep services in-house, the Contracts Handbook says the potential municipal collections market has effectively reduced by 300 million per annum.
As a result, the Handbook says: “Many of the larger companies are no longer prepared to bid for contracts unless they fit their strategic profile in terms of geographic location and available return.”
Competition
It goes on to blame this influence for a lack of competition for contracts – including Private Finance Initiative contracts, citing problems suffered by Northumberland, Shropshire and Gloucestershire in attracting enough competitive bids for their contracts.
The principal driver for councils to seek private sector bids for their contracts are poor assessments by the Audit Commission of their services.
Trends under the Best Value system are for longer contracts – in the order of seven to ten years for collections, rather than the three-year periods often seen under the previous compulsory tender rules.
According to the Handbook, the top private sector players in the municipal refuse collection market are:
- Cleanaway (23.3% share of the market)
- Onyx (18.3%)
- Biffa (13.3%)
- SITA UK (11.7%)
- Verdant (7.5%)
- Cory (5%)
- Focsa (5%)
- Serco (4.2%)
- MRS/Enterprise (2.5%)
- Accord (2.5%)
The 26th edition of the Contracts Handbooks is published by CDC Publishing Ltd at a price of 120. To order a copy email: handbook26@cdcpublicaffairs.com.
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