Lessons from London

In 2009, waste managers from the cities of Copenhagen, Oslo and Stockholm formed the Scandinavian Waste Procurement Network in order to exchange their ideas and experiences of contracting for a range of waste management services. There are four senior waste managers from each of the cities participating in these meetings, which rotate between each of the cities in turn.

As the Scandinavian Waste Procurement Network's first overseas visit they chose London, despite it having 10 times the population of even the largest of the constituent capitals. Unfortunately, they brought the Norwegian weather with them for the duration of their visit in late August.

The main reason for choosing London was that the UK has had long experience of contracting out a wide range of municipal services and especially waste. Until recently the Scandinavian countries had relied on provision of services by the municipality or wholly owned municipal companies.

In the 1990s many European based multi-national waste management companies had objected to these municipal monopolies and the European Commission, having first tackled state monopolies of services such as postal and railway systems, then focused its attention on the municipal services. Ultimately there was the Public Contracts Directive 2004/18/EC, which came into effect in 2005, but which had no effect in the UK because Margaret Thatcher had swept away the municipal control of waste services in the 1990s through compulsory competitive tendering for waste collection and privatisation of waste treatment and disposal services.

During their visit the 11 representatives of the Network looked at recent changes to the waste management contracts for:

• Westminster city council;
• Bexley council;
• SITA's provision of waste management services for the Royal Borough of Kensington and Chelsea (K&C);
• and lastly, Dennis Eagle's latest offerings in low-level entry cabs for RCVs.

SITA has provided waste collection services for Kensington and Chelsea, having won contracts successively during the past 20 years and it was important for the Network to have the contractor's perspective as well as the client's.

Indeed, there is also a close connection with Dennis Eagle because that company supplied its new split-bodied vehicles to SITA for the introduction of K&C's kerbside recyclable collections when they were first introduced in the 1990s with residual waste being collected at the same time as recyclables.

The final meeting with Dennis Eagle was arranged not specifically to look at their extensive experience with split-bodied RCVs but to explore an item of increasing importance on health and safety grounds for all waste management companies. The low-level entry cab's contribution to reducing the poor health and safety record of the waste and recycling sector is receiving increasing attention.

Our Scandinavian neighbours are looking closely at this despite them now increasingly being at arm's length for direct responsibility for this issue. The only other mainstream supplier of these cabs for RCVs is Mercedes.

The Statistical Background

Bjorn Appleqvist, a Swede who works for the City of Copenhagen, first provided an outline perspective on the three cities' household waste management systems (see table below).  

Some of the statistics look distinctly odd with the most notable being Copenhagen's high waste collection cost being at variance to the other two capitals. Partly this is due to the fact that not all the city's waste collections have yet to be contracted out which may reduce the current price but the Danish waste management system places more responsibility on the municipality for collection of more wastes.

In Sweden, for example, the costs of establishing drop off facilities for packaging wastes and their subsequent collection are the direct responsibility of the producers. The down side is that the public is often confused as to who ought to be clearing the sites, cleaning up around them and so on. Equally many municipalities do not like the fact that these containers are on public land and yet they have no responsibility for any aspect of maintenance or other management aspects.

The Swedish household waste tonnage figures also therefore appear quite low because the reclaimed packaging waste is excluded as is the WEEE collected from their household waste re-use and recycling centres.

Stockholm has 12 districts and has let contracts for each district since 1972, usually for three or four districts at a time for five years. Currently, while there are only two contractors providing waste collection services for the City there has been as many as six and at times these have included international companies as well as local and Swedish companies.

Both Stockholm and Oslo will be developing food waste services for their cities and utilising anaerobic digestion (AD). However, for Copenhagen, having tried AD for its food waste in the 1990s using an AD plant at Elsinore and finding the project a profound failure, the city will continue to incinerate its food waste except for the very small proportion home composted or added to the garden waste collected from single family households and then composted by the City.

Stockholm will focus its food waste collections on restaurants and other larger generators of food waste. Also, as in Oslo there is no intention to collect food waste from households.

Despite the detail which each of the three capitals offered to describe their waste management systems, in response to an early question from London colleagues there was considerable confusion as to what the recycling rate for household waste was for each of the three capital cities. The consensus was that they each had around 20-30%, which is comparable to the London overall average.

Westminster City Council

Our hosts for the visit to Westminster city council (WCC) were Mark Banks, Group Manager (Waste and Parks) and his colleague Phil Robson. WCC has had a long-standing Conservative administration with services being procured from the private sector. Although until the mid-80's, in common with all other UK Waste Collection Authorities, waste collection and street cleansing was undertaken by city employees.

WCC now examines what its residents' priorities are and adjusts budgets for different services based on those expressed needs and preferences. WCC seeks considerable flexibility in its contracts because political and residents' priorities can change over time.

The main focus of our discussions was the process for procuring the waste collection and cleansing contract, which although concluded earlier this year has only started in September 2010. For our Scandinavian colleagues the most interesting aspect was that this contract was negotiated using competitive dialogue.

The broad terms and objectives for the contract were set out in late 2007 and then on the basis of the returns from potential contractors, four were invited to participate in the initial competitive dialogue process. Subsequently two were selected for the detailed dialogue process.

The contract was won by Veolia, the company which had previously managed this contract. They have a contract valued at £35m a year, which will run for seven years plus possible options for either a one year or seven year extension.

Veolia will take over all the containers and other equipment from the previous contract and hand these or their replacements back after seven years. The existing RCV fleet is probably capable of a further 12-18 months of operation so that WCC and Veolia hope to present a sparkling new fleet to the World for the Olympic and Paralympic Games in 2012.

WCC has 220,000 residents, most of whom live in apartments and flats and thus WCC's housing profile is comparable to that for the three Scandinavian capitals. Mark Banks noted that while the latest statistics showed that these residents generated 76,000tpa of household waste their appointed waste contractor had collected 111,000tpa of commercial waste on their behalf during the same period. The recycling tonnage of 20,000 tonnes amounted to 26% of household waste.

Other aspects which were also of interest to the Network included the use of GPS technology and specifically the video-based auditing system which is being given a trial with two vehicles. The system can provide a record of the waste sacks to be collected and any detritus left after the collection has been made, for example disposable cups and cans deposited by passers-by after the sacks were set out. Even these should be collected together with the waste set out by residents or commercial companies. Such images would allow managers to identify failures in the waste collection system.

This system was something that would be unacceptable in Copenhagen due to opposition by the unions and more significantly in all three of the Scandinavian countries represented there would be the privacy issue. Such images cannot legally be recoded for subsequent use. Therefore, as in the UK, while cameras on RCVs are increasingly used the imaging is for instant use only, to improve health and safety, for example.

However, in subsequent discussion my Scandinavian colleagues accepted that given the issues of international terrorism and other more local issues it is likely that our Scandinavian neighbours will ultimately accept the intrusion into their lives that high intensity CCTV currently plays in UK society.

Bexley Council

Our host for the visit to the London Borough of Bexley was Stephen Didsbury, the head of Waste and Street Services. While the population of Bexley is the same as WCC at 220,000, its housing stock is totally different with around 20,000 households in flats, of which “the 2,500 living above shops were the most challenging,” according to Stephen Didsbury. Providing containers for the collection of recyclables is certainly very difficult in these premises.

Equally the household waste generated in the two boroughs varies dramatically. While WCC's most recent household waste statistics put it at 76,000tpa, for Bexley it is around 120,000tpa now and reached over 140,000tpa in the early years of this decade. Even with a recycling rate of 52% for its household waste Bexley's residual waste in absolute terms is still slightly higher than that for WCC. However, these differences are due to a large number of contextual factors which include the fact that WCC now has no CA sites while Bexley has two, and WCC has a large number of semi-permanent or occasional residents as its dwellings are occupied more intermittently than those in Bexley.

Bexley is the champion recycler in Greater London with more than 50% of its household waste reclaimed for further use. The progression to this favourable position where Bexley's wide-ranging recycling schemes provide a lower cost option compared to landfill has been a mixture of good planning and taking advantage opportunities that have been presented. The Bexley system is based mainly on provision of a number of containers being provided to households by the council.

Paper and cardboard recovery from households was first introduced in the mid-90s, kitchen and garden waste reclamation was introduced in 2004, although the procedures ultimately leading to the Animal By-Products Regulation(s) delayed the effective introduction. Only in 2008 was a bin for residual household waste provided to Bexley's households for the first time when it went over to an AWC (alternative weekly collection) system for its residual and dry recyclable household waste.

Having provided bins for other materials, Bexley rightly decided to opt for a 180 litre bin for residual waste to be collected every other week rather than the standard 240 litre bin. The interesting aspect of that change was that the amount of waste generated overall in Bexley declined by 18,000tpa from “waste prevention” effects as people thought particularly about the amount of food waste they were disposing off through their brown bin, for example. The recession would also have assisted this waste reduction effect.

Bexley has opted for a number of contracts for its waste streams in order to take advantage of market opportunities from the value of the wastes now available. Therefore it now has separate contracts for paper and cardboard with an income of around £50 per tonne while glass and metals and plastics are collected separately. Contracting for ‘Street Services' which includes refuse collection was conducted in a more conventional manner than for WCC. While the household waste collection system was the main contract for there were other contracts, including:

Residual waste treatment;

• Paper and board;
• Cans and plastic bottles;
• Clinical waste, and;
• Minor recycling streams.

The waste and street services contract included:

• Collection from household;
• Winter maintenance;
• Recycling collections;
• Gully cleansing; and
• The estate management of the Thames road site where the RCVs are stored.

The outcome of the contractual negotiations was that the contract for waste services was awarded to Serco, taking over the collections from the in-house waste collection personnel, although most of those people would have been re-employed by Serco. The existing waste collection vehicle fleet was handed over to Serco in 2009 and that company, which also provides waste collection services in the London Borough of Hammersmith and Fulham, will be replacing the Bexley vehicle fleet in the next 12-24 months.

Looking to the future

Through these initiatives Bexley has achieved savings of £2m over the past two years but, given the constraints on public expenditure expected over the coming few months and the public spending review covering the coming three years, the Borough is now looking to save an equal amount over that period of time. However, given past successes should the waste collection service be as adversely affected as others which have not achieved such cost savings?

Equally colleagues at WCC are concerned that the possible reductions of the support currently provided by central government for the payment of local government services through the Comprehensive Spending Review. While waste collection and street cleansing services might be able to extract of further few percentage points reductions in spending or improvements in efficiency the waste treatment and disposal position is far more daunting with landfill tax increasing at £8.00 per tonne per annum until 2014.

Bexley has recently contracted to put its residual waste through the Cory -perated Belvedere incineration plant from January 2011 but the future arrangements for WCC are yet to be determined. Although currently working on its strategy for the contrac,t the current £9 million per annum contract for residual waste treatment is not due to run out until 2016.

The carbon agenda was something that was recognised would also influence the future management of services both in the UK and in the Scandinavian countries. As the cost of carbon emissions becomes increasingly integrated into the contractual arrangements for waste, and almost any other contracts, so our perspective on contractual negotiations will need to look for at value for money and overall carbon impacts to be reported by the local authority.