Street Scene, Birmingham city council’s in-house waste company, recorded a £1.9 million income shortfall in 2019/20, partly as a result of losing customers for its trade waste services.
A report which went before the council’s resources overview and scrutiny committee on 10 September showed that in the 2019/20 financial year, the local authority received an income of £9,903,100 from its trade waste services. It had budgeted receiving £11,354,100.
The remaining shortfalls were recorded for Street Scene in its income for street cleansing, fleet repair services and its training centres.
This is the sixth year in a row Birmingham city council has failed to collect its budgeted income for its trade waste services. The 2019/20 financial year saw the local authority raise its budgeted income from £10,915,800 the year before, even though it had then missed its target by £667,483.
And, the council said its trade waste services had lost some customers in 2019/20 due to the “perceived and actual unreliability of the service”.
The council’s report reads: “Even when we have implemented price increases this has not resulted in a corresponding increase in income due to the prices sensitivity within this commercial market. However, the budgeted income has continued to rise significantly.
“The issue therefore is not so much with decreasing income but with increasing aspirational income budgets.”
The 2019/20 financial year began in April 2019 and ended in early April 2020. This means Birmingham city council’s figures relate only to the start of the coronavirus lockdown.
Birmingham city council offers an in-house domestic, commercial refuse collection and disposal operation. Aside from overly ambitious budgets, the council had two other explanations for its failure to collect the expected income from its trade waste services.
“Even when we have implemented price increases this has not resulted in a corresponding increase in income”
First, the local authority blamed two periods of significant industrial action. A long-running dispute between Birmingham city council and the Unite union ended in March 2019 (see letsrecycle.com story).
And, the local authority blamed its use of aged vehicles. It said these were subject to mechanical breakdown and therefore service failure.
Councillor John O’Shea, cabinet member for street scene, will update the council’s cabinet next week on the procurement process for to replace the council’s vehicle fleet.
The largest council by number of residents, Birmingham city council represents a population of more than 1.1 million people.
The Labour-run local authority had a recycling rate of 22% in the 2018/19 financial year.