Government

Veolia to lose two waste contracts as East Cambs opts for Teckal

Two councils have announced plans to move on from waste contracts with Veolia in the next year, with East Cambridgeshire announcing that it will award its next contract to its trading arm, East Cambridgeshire Trading Company, while Rushmoor in Hampshire has opted for Serco over Veolia for its waste and recycling services.

Veolia to lose two waste contracts as East Cambs opts for Teckal
East Cambridgeshire opts for Teckal solution

East Cambridgeshire District Council announced last week that, when its contract with Veolia runs out in April 2018, it will award its household waste collections and street cleaning services contract to a Teckal company established by the council.

Teckal companies – arms-length and legally separate but wholly-owned entities created by local authorities or groups of local authorities to carry out services – are an increasingly popular option among councils. As well as providing more control for councils over their municipal services, they also allow authorities to contract out their company for commercial ventures to maximise capacity and add income. Examples include Yorwaste in York and Ubico, which holds the contract for the Gloucestershire Waste Partnership.

The council will award the contract to its trading arm, East Cambridgeshire Trading Company (ECTC), following a review of possible contract options being approved by the full council last month (23 February).

The council has told residents that they will notice ‘little difference’ in service, but that the move will provide cost savings and improvements to service delivery.

Last year the council reported a recycling rate of 56.4 per cent, the 28th highest in England, aided by a jump of over 23 per cent between 2012/13 and 2014/15, after a new wheeled bin service was introduced. However potential savings from taking ‘direct control’ of the service have led the council to decide to establish the company.

Councillor Julia Huffer, Waste Champion for East Cambridgeshire District Council, said: “We have spent a lot of time looking at options beyond the end of Veolia’s contract. We believe that direct provision of services is definitely the way ahead. It will give us greater control over services and flexibility to make future improvements. We will no longer be paying a contractor’s profit margin and will be able to reinvest savings to provide better services for local residents.”

As well as saving money on the contract, the council says the move will also remove the cost of the required EU procurement process for tendering for a new service delivery provider – an additional saving of around £250,000.

Jo Brooks, Director of Operations at East Cambridgeshire District Council, says that ECTC will be committed to achieving the council’s recycling target of 60 per cent.

She said: “Transferring the service to the trading company will directly reduce the amount of money the council spends on waste whilst not reducing the level of service for local people. It will also enable the service to be more flexible to future change.”

All Veolia staff currently providing the services in the district will be transferred to ECTC in the next 12 months through the Transfer of Undertakings (Protection of Employment) regulations (TUPE).

Rushmoor Borough Council

Meanwhile, Rushmoor Borough Council has today (20 March) announced that it has chosen Serco to take on a contract delivering waste and recycling collection, street cleaning and grounds maintenance across the Hampshire borough, which covers the area around Aldershot and Farnborough.

The contract has an estimated value of £38 million over its initial 10-year lifetime, with the contract containing the option to extend the partnership for another 10 years.

Veolia to lose two waste contracts as East Cambs opts for Teckal
Veolia has held the waste and recycling contract for Rushmoor since 2002. The contract was due to expire this month (March 2017), but a four-month extension was granted to the end of July to allow for a new depot to be completed and for Hampshire County Council to carry out a review of waste budgets.

From 31 July this year, Serco will take over the current household waste collection services from Veolia, which operates weekly residual waste collections, with fortnightly collections for co-mingled recycling, a separate box for glass, and a garden waste bin. There will be no change to the kerbside system and the firm says that the 100 staff currently employed by Veolia will all be given the opportunity to transfer to Serco.

According to figures from the Department for Environment, Food & Rural Affairs (Defra), Rushmoor reported a recycling rate of just 25.9 per cent in 2015/16. In 2007, the borough trialled alternative weekly collections of residual waste for a fifth of its households, achieving a ‘step change’ across participating households from 23 per cent recycling to 36 per cent, but the council decided not to follow up on the trial.

Veolia reportedly bid for the new contract with the authority, but was beaten out by Serco.

Weekly collection ‘very important’ to residents

Serco says that as part of the contract, it will also invest in growing and developing a commercial waste and recycling service to generate income for the contract.

The firm has also set out a number of other ‘innovative’ improvements that it plans to bring to Rushmoor as part of the partnership, including: free kerbside collections of small electrical items; a ‘Love Clean Rushmoor’ app to enable residents to report fly-tipping and broken street furniture; a reuse shop developed in partnership with the Trussell Trust; and development of hybrid technology, biofuels and on-board systems to reduce the carbon emissions of waste vehicles by 30 per cent.

Commenting on the contract, Robin Davies, Serco’s Business Development Director for Environmental Services, said: “All of our plans have been developed by listening to local people, so that we can provide a first-class service that really meets the local community’s needs.”

Cllr Martin Tennant, Rushmoor Borough Council’s Cabinet Member for Environment and Service Delivery, added: “From listening to our residents, we know that a weekly rubbish collection is very important to them. So we are really pleased that, as part of the new contract, these will continue, as well as many other exciting improvements, at no extra cost to the taxpayer.”

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