Defra has finally given councils a glimpse of what the future of waste and recycling could look like, but we still face massive uncertainty over funding for services and the impact of a future deposit return and extended producer responsibility schemes.
At a recent roundtable hosted by Materials Recycling World ('MRW'), councillors, officers, and industry professionals met to discuss the challenges we face in continuing to deliver what could be termed 'local government's dirty secret'.
In North Herts, of every £1 we retain in council tax 73p is spent on our waste service. For districts, waste services are often the single most expensive contract or service provided for residents. And it is becoming increasingly costly to deliver the services our communities expect and deserve.
At the time of writing, North Herts, along with our partner authority East Herts, is in the final stages of procuring a new waste contract. This process has taken over two years, with contract scoping and design in the summer of 2022 leading to an initial tender we believed was affordable. When the bids from the handful of companies prepared to work with councils came in seven-figures above what we budgeted for, tough choices had to be made.
The waste market simply isn't competitive, and the margins are tight for councils and contractors. For authorities who have contracted their services out, there are just five major contractors in the whole country. We're lucky to receive two or three bids - and maybe one of those could be affordable. Up to one-third of municipal waste contracts are likely to be renewed before the end of 2025, with an estimated £7.3bn worth of live waste contracts due to expire within the next 12 months, so the need for a market that works for providers and councils alike is clear.
The Resources and Waste Strategy, now rebranded to Simpler Recycling, has been in gestation for almost a decade. Yet we are still without the certainty the market and councils need to plan and move forward to deliver for communities. It is hoped that a new government will bring clarity and speedily confirm the direction of travel, and supply the funding councils desperately need.
Simpler Recycling really doesn't simplify matters for councils, or the market. Statutory guidance that centralises the frequency of bin collections fails to recognise the unique communities and needs councils serve. Rural and urban communities are different, and it's local decision-makers, embedded in our communities, who know the service our residents need, not ministers and civil servants sitting in Westminster. We know both the cost, and value, of the services we provide. It's telling that 56% of respondents to a recent District Councils' Network survey said they were considering transitioning to three-weekly waste collections, anticipating savings of between 11% - 15%. District councils also want to increase resident options for kerbside collection of textiles and electrical items, but this requires investment in infrastructure and fleet which is beyond the reach of many.
The uncertainty of what deposit return and extended producer responsibility schemes will look like means the market cannot budget or plan effectively. Contracts negotiated during this period for both collection and Materials Recovery Facility ('MRF'), which sort recycled materials as part of the disposal process, will therefore include mitigation pricing to account for this - a cost the council taxpayer will pick up. Councils are able to generate income from selling recyclate to markets, but if residents return packaging directly to producers this reduces the income stream for councils, meagre as it is. It also changes pricing within the market, increasing disposal costs. The data burden and additional infrastructure needed to support deposit return and extended producer responsibility are also unclear - save that we know the burden will fall heaviest on district councils.
While collection authorities are in the dark about the challenges we will face, upper-tier disposal authorities also face significant challenges. Waste disposal, unlike adult and children's social care services, is not currently listed for any funding changes. Yet it is county councils that dispose of our waste and are ultimately responsible for finding alternate end solutions to landfill.
The new burdens capital and revenue funding awarded for the transition to weekly food waste collections by Defra has also left a bad taste in the mouth of many councils who transitioned to food waste collections years ago. Oxford City is a leader in green innovations and climate responsibility. The council adopted weekly food waste collections in 2009. In North Herts, we've collected food waste separately since 2018. The costs of procuring new vehicles and different bin types were passed on to council tax payers by authorities who did the right thing rather than wait for new legislation to force their hands. Had we waited, we could have accessed new burdens funding and used our funds on other essential services. The current system risks stifling innovation in local government as we can no longer afford the cost of early adoption. The environmental costs of not innovating in waste are clear, but without fairer funding and councils being supported financial sustainability will become the driving decision making factor.
There was however one key part of the waste ecosystem absent from MRW's roundtable - the waste producers. Until the likes of Tesco, GSK, and Amazon sit down with industry, councils and government as equal partners, we will continue to face the same challenges. For too long the focus has been on how we get rid of waste, or how we get residents to put more materials in certain bins. The real solution is for product producers to reduce packaging, and simplify the materials used, transitioning to reusables with recyclables as a second preference, and ending the use of material that cannot be reused or recycled. We also need to work with food producers and our communities to reduce food waste. And in the interim, government must recognise the costs councils bear dealing with waste, and reform new burdens funding so that it encourages innovation rather than rewarding delay.