Value for money ‘unproven’ for incentive schemes

Services company Serco has today (18 February) released a new report that outlines there is currently no proof that recycling incentive schemes are ‘value for money’, or that they have a ‘clear’ impact on recycling rates or residual waste arisings.

The ‘Investigating the Impact of Recycling Incentive schemes’ report, undertaken by Eunomia Research & Consulting on behalf of Serco, investigated the impacts and potential benefits of recycling incentives (such as rewarding residents that recycle with cash rewards or money off vouchers) taking place in 30 boroughs across the UK, in the hopes of ‘helping local authorities maximise the effectiveness of their recycling services’.

It suggested that for current UK reward schemes (outside of those covered by Defra’s Reward and Recognition Funded), ‘value for money is unproven’, and in some cases, could actually cost more than the ‘evaluated benefits they deliver’.

The report reads: ‘Value for money is unproven although some of the cheaper schemes are closer to offering cost benefits through reduced disposal costs and increased material revenues. Furthermore, most schemes appear, from the incomplete data available to us, to cost more to operate than the evaluated benefits they deliver.

‘Ultimately, schemes are seen to vary in terms of the impact that they have and this analysis has not revealed any particular patterns as a means of explaining this variance.’

Impacts of schemes

The report highlighted that authorities with recycling incentives schemes, such as the London Borough of Ealing, recorded an average of an eight per cent increase in recycling (compared to those authorities that did not run reward schemes), accompanied by a four per cent reduction in landfill.

Forty per cent of schemes showed both increased recycling and reduced landfill.

However, using the tonnages of five local authorities with reward schemes, Eunomia found that three of the five schemes saw an increase in residual waste arisings (as opposed to the hoped for decrease), of one, three and five per cent in the year following the introduction of the reward.

In the two schemes where a decrease in residual waste was seen, the changes were ‘more significant’, with a reduction of 10 and 17 per cent.

There was also a variation in recycling tonnages, with three councils seeing increased amounts of recyclable waste captured, while two saw a decrease in recycling tonnages following the scheme’s introduction. For one of these authorities the decline was ‘fairly significant’.

Despite this, only a quarter of residents surveyed said that recycling incentives encouraged them to recycle more, whilst 75 per cent of them suggested that they are ‘already recycling as much as they can’.

Further, Eunomia found ‘anecdotal evidence’ from residents that the communications work relating to the scheme was ‘perhaps the most important part of the scheme and might be almost wholly responsible for driving any performance gains’.

Eunomia warned however that there were some difficulties concerning data, or lack thereof, stating: ‘There is not a huge evidence base. Firstly, that is associated with the relatively limited level of scheme implementation across the UK. Secondly, there is a very high number of changing and interacting variables associated with each scheme. In other words, the term ‘reward schemes’ covers a large spectrum so comparing like-for-like is challenging.

It added: ‘One would expect that if reward schemes had a reliable and strong impact, the data picture would be much clearer.’

‘Much for us to learn about incentives in this sector’

Speaking after the release of the report, James Fulford, Eunomia Director and lead author on the report, said: “Giving residents ‘rewards’ for kerbside recycling may be politically attractive but the evidence from our research is that these schemes are unlikely to achieve more than a marginal impact on recycling rates. Some of the cheaper schemes may be able to demonstrate value for money, but none of the schemes for which we saw data – and we looked pretty hard – appeared to be cost effectively increasing recycling captures...

“Other types of incentive scheme – Deposit Refund Schemes and Pay As You Throw – have a much better international pedigree in terms of the impact they have. It’s disappointing that our policy-makers have turned away from this evidence and are instead promoting counter-productive weekly refuse collections and relatively ineffective reward schemes.”

Robin Davies, Business Development Director of Environmental Services at Serco added: “In a difficult financial climate, Serco is supporting our local authority partners in harnessing the potential of recycling incentives to help increase recycling rates and thereby keep costs down. This new research provides important information in relation to both the costs and impacts of incentive schemes enabling them to make better decisions.”

The report has been welcomed by members of the waste and resources industry, with Chris Murphy, Deputy Chief Executive of the Chartered Insitution for Wastes Management (CIWM) writing in the foreword: ‘As pressures build on local government to deliver ever more demanding targets against a backdrop of reducing budgets and austerity agendas this work will provide a valuable contribution to the discussion of opportunities to meet those two demands…

‘The evaluation, analysis and results contained here will make a valuable contribution to the debate and go a long way to filling the information vacuum.

‘There is much for us to learn about incentives in this sector and at present we are only scratching the surface. We need objective reports like this to inform decision makers so that they can see the options and decide what is right for their residents and their particular circumstances.I look forward to this piece of work having a significant effect on how we view and implement incentives in the future.’

The research forms part of a public-private partnership between Serco and the Department for Environment, Food and Rural Affairs (Defra), which is undertaking its own research through research analysts Brook Lyndhurst.

An interim report released by Brook Lyndhurst earlier this year appears to have come to a similar conclusion, finding improvements in recycling and reuse tend to be linked to ‘better services and promotion rather than being attributable directly to rewards’.

It is hoped that the partnership will widen the scope of the work, whilst avoiding ‘unhelpful’ and ‘costly’ duplication.

A joint summary report based on the two reports will be released later this year.

Read the ‘Investigating the Impact of Recycling Incentive schemes’ report.