23 July 2019 by Lucy Pegg

Waste sector challenges Labour’s insourcing policy

The private sector has hit back at Labour Party plans to prioritise in-house contracts over outsourcing at local authorities for services including waste.

The Environmental Services Association (ESA) and waste management firm Serco have both claimed that the Party’s plans to make the insourcing of public services by councils the “new normal” ignore the contribution of those working in outsourced services.

ESA executive director Jacob Hayler

The policy was outlined by Labour’s Shadow Secretary of State for Communities and Local Government, Andrew Gwynne, on Saturday. Mr Gwynne, who is the MP for Denton and Reddish, revealed Labour’s plans for a Local Public Services Act (see letsrecycle.com story).

Mr Gwynne said that the legislation would put insourcing first, create a framework for deciding when services should be kept inhouse and ‘increase standards’ for contracting out.

Responding, Jacob Hayler, executive director at the ESA, said: “It is very disappointing that the Labour opposition is putting ideology ahead of evidence when it comes to outsourcing waste and recycling collections.

“ESA’s Members have a strong track record at implementing service change in collections and driving up performance.

“Their experience will be more important than ever as we all strive to meet the recycling ambitions in the government’s Resources and Waste Strategy.”

Competition

The ESA – which represents the private sector waste management industry – says it has asked independent consultants to investigate the role and impact of competition upon collection services.

It claims early findings of the research, which is expected to be published this autumn, suggest the competition created by outsourcing contracts leads to higher recycling rates and better value for money for councils and their residents.

Robin Davies, business development director at Serco Environmental Services, expressed similar regret at the move from Labour and felt he needed to “put the record straight”.

He said: “People who work in the sector are passionate, hardworking people who, like public sector workers strive to make a positive difference in the areas we work.”

Mr Davies also cited the forthcoming ESA research – which Serco is supporting – that shows the benefits of outsourcing competition “over several decades”.

“People who work in the sector are passionate, hardworking people who, like public sector workers strive to make a positive difference in the areas we work.”


Robin Davies
Serco

“Quality improvements, KPI peformance, recycling rates and productivity gains were all achieved by subjecting services to competition,” he added.

‘Ideology’

Writing for letsrecycle.com in April, Mr Davies claimed the debate over outsourcing was “partially influenced by political ideology and local circumstances” and lamented a lack of empirical data on the topic (see letsrecycle.com story).

He said: “The trouble is that business cases made for a change in sourcing strategy are often based on desktop exercises undertaken by consultants or authorised officers which fail to properly evidence the likely future costs, financial and delivery risks to the operation, to the authority and to local council tax payers.”

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