13 January 2020 by James Langley

Competition drives recycling, finds ESA report

Outsourced council waste collections achieve higher recycling rates than in-house services, according to research conducted by environmental consultancy Eunomia.

The findings, published in a report today (13 January) for the Environmental Services Association (ESA) and based on a sample of 58 similar authorities over a period of seven years, suggested that the average recycling rate for contracted out services was 50%, compared to 44% for in-house services.

Eunomia’s report was commissioned by the ESA

Furthermore, the report, which was commissioned by the ESA, claimed that contracted services have a 10% lower cost per percentage point of recycling achieved than in-house services. The ESA represents the UK’s resource and waste management sector.

Executive director of the ESA, Jacob Hayler said: “The research findings contradict the belief, in some political quarters, that in-house services provide the tax-payer with better value for money and, to the contrary, demonstrate that competition drives better outcomes for councils across a range of metrics.

“Industry practitioners, policy makers and service-commissioners must make a renewed case for the benefits of competition and challenge, both at a national level in public procurement policy, and at a local level reaching their own commissioning decisions.”

Researchers at Eunomia compared waste collection authorities on a like-for-like basis and attempted to account for factors such as geographical areas, dry recycling provision and consistency in provision.

Cost

Titled The Effects of Competition on Municipal Waste Collection Performance, the report is intended to assess the recycling performance and service cost of in-house and contracted waste management services.

The ESA is the trade association representing the UK’s resource and waste management industry

Sam Taylor, principal consultant at Eunomia, said: “For all local authorities across the UK, the question of how to achieve the best value for money is critical.

“There is a real need for better data to support authorities to make the right decisions about the most cost-effective approach, taking into account not only the service cost, but also both recycling performance and customer service.

“Cost alone does not provide a reliable benchmark for comparing services – improving the quality of both cost and performance reporting would be a valuable step forward, especially with the expected introduction of full producer responsibility for packaging EPR in 2023, under which producers will rightly be seeking improving levels of performance at an efficient cost.”

The report also touched on missed collections, noting: “It also appears that contracted services achieve lower rates of missed collections, despite there perhaps being a greater priority on monitoring service failures of this kind as part of regular contract management procedures.”

Research

For the analysis, Eunomia sought to find comparable authorities to pinpoint the extent to which delivery method influences performance.

“The research findings contradict the belief, in some political quarters, that in-house services provide the tax-payer with better value for money”

Jacob Hayler

They used several criteria to produce a sample of 58 authorities, which represented an equal and comparable selection of both in-house and contracted out services.

Local authorities that operated their services through a local authority company were categorised as in-house.

In England, 22 unitary authorities use in-house waste management services, whereas 25 use contracted services and nine use a variety of service delivery models.

By contrast, 136 lower tier authorities use in-house services, 110 use contracted services and 22 use a variety of service delivery models.

In-houseContractedOtherTotal
Unitary authorities2225956
Lower tier authorities13611022268
Total15813531324

 

Competition

Mr Hayler said: “This independent rigorous research clearly demonstrates that competition for municipal recycling and waste collection services drives higher recycling performance and better value for money for the public purse.

Jacob Hayler

Jacob Hayler is the executive director of the ESA

“The results speak for themselves and arrive when the stakes have never been higher, since the government’s new Resources & Waste Strategy will ultimately require local authorities to collectively increase their recycling rates by over 20 percentage points during the next decade.”

The full report can be read here.

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