Councils Rubbish at Contracts
Householders are missing a chance to share in the results of huge profits generated by the soaring value of recyclable domestic rubbish, The Times has learnt.
The price of recyclable plastic, newspaper and cardboard has doubled in 18 months, giving councils a source of “green gold” that could be spent on improving local services. Many are locked into 20 to 30-year contracts with recycling companies and are unable to cash in on the higher cost of plastic and copper.
A waste disposal deal that a decade ago looked like good business is now regarded by Kent County Council as a costly mistake.
Prices of recycled materials have risen so sharply that less than halfway into the 25-year deal the council is attempting to renegotiate with the contractor.“At the time it looked a good deal – ten years later I would say never again,” said Keith Ferrin, the council’s cabinet member for environmental and waste services.
Ten years ago it was a good deal, and that is the whole point of long term contracts, you passed over the risk. Some you win some you don't.
The Times Continues
The answer is to scale up, with local councils combining with each other to take on the recycling companies and set up their own plants and trading centres. But only some will be able to do so. The rest will be ruing the day that they negotiated that 25-year contract with the local recycling company for £10 for a tonne of plastic bottles.
Huh? The councils claim they weren't up to the job of negotiating the right contract so they ought to do the whole job themselves! The reason that rubbish is worth money is that the private companies have been innovative, resourceful and profit minded and have developed the methods and markets to make money. And they have been able to do this because they have an assured source of rare materials. Does anyone think the council would have done the same? No and the councils should open up the rubbish collection business. For public health, just as for car insurance, it might be reasonable for every household to have to have a rubbish collection contract, but it would be nice to be able to opt out of the council's one. I think it would be surprising how private companies would treat the customers in comparison to the council who threaten, fine and try to prevent anyone using their service.