When cutting doesn’t cut the mustard, then transformation is required. The ‘graphs of doom’, the projections of (dissolving) central government funding mean that local authorities are, to use the iESE model terminology, ‘reviewing, remodelling and reinventing’ services to meet these challenges.
Frith RM is currently working with six very different authorities, each with relatable challenges but differing levels of risk appetite, commerciality and constraints. These clients have a detailed understanding of the ‘reviewing’ element of the process, but on occasion are seeking an independent view based on experience elsewhere. Benchmarking performance and operations are supporting tools for this area of the review as are the increasingly diverse mechanisms that enhance or detract from performance in areas such as recycling credits, longer term contracts & advantageous contract documentation, communications initiatives, enforcement, technology and incentives.
Where we believe external technical support can provide a greater role is in the ‘remodelling and reinventing’ stages of waste and resource management strategy and delivery. The authorities we are working with are remodelling in various areas as described here. Around waste collection services, changes are driven by savings requirements and environmental improvements, and authorities are targeting the areas of: less frequent residual collection; charged garden waste services; route optimisation and enhancing vehicle life. These are recognised methods to deliver substantive improvements and meet strategic objectives, but can also fail to deliver as anticipated if not considered in their entirety or suitably resourced.
Who does what? Public, Private, WCA or WDA
We are seeing, not just blurred lines through partnership working and collaboration, but switches of responsibility, duties and services from players in the market. Some Waste Disposal Authorities are passing services across the Waste Collection Authorities (e.g. districts taking over HWRC operation), the converse is also happening (e.g. centralised recycling contracts across a county), new Unitary authorities are under real consideration (e.g. Cotswolds DC and West Oxfordshire) and private sector activities are being switched to the public sector (e.g. business cases of AD plant, refuse derived fuel manufacture), as services and infrastructure shift to manage the ongoing challenges.
The procurement approach and waste management infrastructure are key parts of efficiency and reinvention. The collapse of the recycling market in particular has impacted on the economics of the collection and processing operation for recyclables, meaning strains on private sector operators and impacts on in-house operations. Our experience is the combination of these pressures and the low borrowing rate for local authorities has led to a greater trend towards in-house procurement and operation of infrastructure and services to enable some control and internalise this risk at a manageable cost. Governance arrangements are increasingly defined by commercial appetite and Teckal exempt companies and Trading Arms are popular vehicles for service delivery in this light.
Scale
It is often the economy of scale aspect where local authorities (including major unitaries or county councils) are disadvantaged when compared with national commercial operators. The common challenges facing local authorities across the board however means that there is a strong incentive for services (or elements within services) to be jointly procured or delivered by one or more parties on behalf of other LA partners or shareholders. Frameworks have long been established for aspects of procurement such as purchase of bins or boxes, but as the public sector moves into areas such as recycling facility development and RDF pre-treatment it would make sense to develop more joint material marketing to establish efficiencies as material resources are increasingly managed by the public sector.
Finally, the full service reinvention. Transforming services, is an area championed by Aylesbury Vale and other innovative authorities that approach their services through the lens of entrepreneurship and application of business models. The approach in one area will not necessarily apply to another, but the concern is that councils need to ensure sufficient revenue streams to meet basic service demands into the medium and long term. Waste management services, with their direct interface with the public, can have an important role to play in this arena.
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