Contracted waste services achieve higher recycling rates, says ESA report

A new report from the Environmental Services Association (ESA), produced by Eunomia Research and Consulting, has concluded that local authorities in England that contract out their waste services achieve higher recycling rates than in-house services.

A Biffa waste collection truck

As the trade association for the waste and resources industry, ESA’s members include many of the waste management companies that provide contracted services for local authorities.

Based on a sample of 58 councils across England, the ESA’s report, entitled ‘The effects of competition on municipal waste collection performance’, found that over a seven-year period (2011/12 to 2017/18), the average recycling rate for contracted out services was 50 per cent, compared to 44 per cent for in-house services.

According to the report, almost 60 per cent of contracted services provide food waste collection, compared to just 22 per cent of in-house services.

With regard to the quality of service, the proportion of reported missed collections is on average 16 per cent lower in contracted services.

Whilst several local authorities, including Blackpool, Bristol and Slough, have recently brought their waste services in-house to cut down on costs, the report found that out-sourced services were in fact better value for money, with authorities that contracted out their services achieving a 10 per cent lower cost of service per household per percentage point increase.

The case for competition

The ESA has long made the case for the outsourcing of council waste services, criticising Labour’s pre-election plan to push councils to bring waste services in-house and has welcomed the findings of its report. Jacob Hayler, Executive Director of the ESA, said: “This independent, rigorous research clearly demonstrates that competition for municipal recycling and waste collection services drives higher recycling performance and better value for money for the public purse.

“The results speak for themselves and arrive when the stakes have never been higher, since the government’s new Resources and Waste Strategy will ultimately require local authorities to collectively increase their recycling rates by over 20 percentage points during the next decade. Furthermore, as producers of packaging take a greater share of the financial responsibility for waste management under this new strategy, policy-makers and service-commissioners must be responsive to their understandable desire to ensure the contributions they make are spent effectively.

“In our view, competition has an important role to play in delivering a resource-efficient circular economy which will both help deliver ‘better’ services at home and help British businesses more effectively compete abroad.

“In the meantime, the research findings contradict the belief, in some political quarters, that in-house services provide the tax-payer with better value for money and, to the contrary, demonstrate that competition drives better outcomes for councils across a range of metrics. Industry practitioners, policymakers and service-commissioners must make a renewed case for the benefits of competition and challenge, both at a national level in public procurement policy, and at a local level reaching their own commissioning decisions.

Hayler believes that more consistent and improved data should be made available to local authorities to allow them to make the best decision when contracting out waste services to ensure the best value for money. He added: “The ESA believes that there is a strong case for the government to improve revenue outturn reporting to enable local authorities to make objective decisions based on actual evidence and hard data.”

Sam Taylor, Principal Consultant at Eunomia, said: “For all local authorities across the UK, the question of how to achieve the best value for money is critical. There is a real need for better data to support authorities to make the right decisions about the most cost-effective approach, taking into account not only the service cost, but also both recycling performance and customer service.

“Cost alone does not provide a reliable benchmark for comparing services – improving the quality of both cost and performance reporting would be a valuable step forward, especially with the expected introduction of full producer responsibility for a packaging EPR in 2023, under which producers will rightly be seeking improving levels of performance at an efficient cost.”

Co-mingled vs multi-stream

As the report highlights, whether or not the service is contracted is not the only factor to consider, as other variables, including the service method, can also have a significant impact on the success of a council’s recycling service.

Leading the way on recycling in the UK, Welsh local authorities, most of which are run in-house, have achieved much higher recycling rates than English councils, with the Isle of Anglesey and Bridgend reporting 69.9 per cent and 69.4 per cent respectively. All Welsh local authorities have met the national recycling target of 58 per cent by 2016/17, whilst the English household waste recycling rate – 43.5 per cent in 2018/19 – is just two per cent higher than it was in 2010/11.

Most Welsh local authorities run multi-stream services, following the model set out by the Welsh Collections Blueprint, which proposes a series of recommendations to maximise recycling, including a kerbside sort system, weekly separate collections of dry recyclables and food waste, and fortnightly collections of residual waste.

The Welsh Government has invested heavily in local authority waste services, supporting councils to achieve higher recycling rates. Meanwhile, English local authorities have experienced severe funding cuts since 2010, with local authorities expected to have lost £16 billion in core funding since 2010 by 2020.

You can read the report in full on the ESA website.

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