Peterborough city council achieved a recycling rate of almost 22% in 2002/3 – the seventh best for an English unitary authority – and more recent estimates put the level close to 30%.
” The arrangement set up with Peterborough city council had been in place for some time and hadn't really reflected the reality of the costs involved.“
– John Shaughnessy, Shanks
But the success has been on the back of losses thought to be as high as 1 million a year for the council's waste contractor.
The city's recycling programme expanded last year to replace green boxes with green wheeled bins for 60,000 households, picking up co-mingled recyclables fortnightly. The council said this expansion had seen the amount of recyclable material being collected in the city double from 500 tonnes to about 1,000 tonnes each month.
However, it is thought the recycling contract held by Shanks was insufficiently flexible to take on board changes in both the scope of the city's recycling services and markets for the recyclable material collected.
Prestigious
Speaking to letsrecycle.com, Shanks head of external affairs John Shaughnessy said the company had been reviewing a number of its existing contracts as part of wider efforts to improve profitability in the UK operation. Peterborough had been one of the company's most prestigious contracts, he said, but Shanks had come to the conclusion that it could not afford to continue.
Mr Shaughnessy explained: “The arrangement set up with Peterborough city council and expanded to include other councils on the fringes of the city had been in place for some time and hadn't really reflected the reality of the costs involved. It was proving too be a costly contract for us, and such were the losses we had to reluctantly walk away.”
” The council still believes it will be cheaper to recycle this material than to send it to landfill. “
– Peterborough city council
The termination of the Peterborough contract comes only a few months after Shanks was forced to pull out of its Milton Keynes contract for similar reasons (see letsrecycle.com story).
The council's contract services department has taken over the contract, hiring some of the Shanks workforce to smooth the transition, and will continue to run the service for the remaining two to three years of the contract period. It is thought that moving the service in-house will cost the council an extra 700,000 a year.
However, a Peterborough council spokeswoman insisted: “Although the end of this contract will mean extra costs of 700,000 a year, the council still believes it will be cheaper to recycle this material than to send it to landfill.”
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