Select Committee on Environment, Transport and Regional Affairs Fifth Report



MEMORANDUM BY SERVICETEAM (DSW 96)

1.  INTRODUCTION

  1.1  Serviceteam welcomes the opportunity to submit evidence to the Environment Sub-committee's inquiry into Delivering Sustainable Waste Management.

  1.2  Serviceteam is a waste management service provider with over 20 years experience of providing environmental services in England and Wales. Serviceteam operates exclusively within the local authority arena and provides household waste collection services to over 20 local authorities. Serviceteam is a wholly owned UK company employing over 5,000 staff.

  1.3  Serviceteam welcomes the Government vision for managing waste and resources more effectively and looks forward to working with local authorities to encourage householders to reduce waste and to participate in recycling schemes.

  1.4  Serviceteam believe the objective of sustainable waste management in municipal waste and the targets set for recycling are indeed challenging, but entirely feasible. For many years we have provided our customers with flexible, diverse and sustainable solutions in genuine partnership with local authorities. However, although we would like to realise the objectives of the Waste Strategy 2000, we are concerned that this may not be possible for businesses like ours and that larger, more integrated companies will come to severely dominate the market.

  1.5  This memorandum is divided into four sections:

    (i)  Integrated Waste Management

    (ii)  Increasing Recycling

  Although Serviceteam acknowledges that our memorandum deals with municipal waste, as part of the Government's Waste Strategy, we would be happy to provide oral evidence to the Sub-Committee on this issue.

2.  INTEGRATED WASTE MANAGEMENT

  2.1  Waste Strategy 2000 encourages integrated waste management as the most effective way of achieving sustainable waste management. This has serious implications for the market. To achieve this scenario, only a very small number of major, vertically integrated service providers will be able to offer the entire range of waste services from the collection through to the disposal of waste.

  2.2  Companies like Serviceteam have concentrated on providing service excellence in the collecting and recycling front end of the waste service and see the physical disposal of waste by landfill or incineration as a separate specialist activity. Serviceteam strongly believes that the optimum solution of a seamless waste management service can be achieved without necessarily contracting with one integrated service provider. In fact by contracting with experts at both ends of the service delivery chain, a better overall solution will be achieved.

  2.3  Specialist collection contractors concentrate on customer satisfaction and have the knowledge and experience to deliver a local service providing for local needs. By contracting experts at the collection end of the service delivery chain, higher recycling rates will be achieved. This is because disposal companies have the capacity and resources to incinerate waste and will look to this solution as the most effective way of achieving the Government's targets—the desirable outcome.

  2.4  However, local authorities may be inclined to perceive the seamless approach as the one which provides the most effective solution to meeting their targets and the inevitable result of a totally integrated service will be a consolidation of the UK waste industry. Few companies dealing with the collection of municipal waste have the capacity or the resources to take on the responsibility for disposal of waste and if contracts are awarded to those who can provide a one stop shop to authorities the market place will diminish. Competition and importantly, local choice, will no longer be an option. The market-place will instead be filled by a newly created oligopoly.

  2.5  All waste management service providers will have to adapt to Waste Strategy 2000, the change of culture and the contractual implications, but for providers like Serviceteam to continue operating the only possibility is partnership, itself a limited option. The Government acknowledges in the strategy that: "it is likely that a number of larger, more integrated companies will come to dominate the market". However, despite assurances that "there will always be a place for smaller more localised companies to apply their own pressures", it is the concern of Serviceteam that regulation may not "action the balance".

  2.6  The Government does not indicate anywhere in the Strategy the role for collection services or how they will fit into the recommended integrated system. It would be perverse if the Government's strategy, which seeks to promote sustainable solutions, actually inhibits one of the sectors most progressive companies.

3.  INCREASING THE RECYCLING RATE

  3.1  Increasing the rate of recycling in municipal waste will be most effectively achieved through developing a market for the waste collected. This will then provide the finances needed to ensure an enhanced service is delivered locally.

  3.2  The identification and development of new markets for recycled goods and materials should be taken forward as the primary measure. Markets will provide recyclables which will not only encourage the increase in recycling rate but also spread the cost. Moving from the current eight per cent recycling rate to the Government's 33 per cent recycling rate demands a four-fold increase in current recycling markets. It is the lack of a market for recycling which is the single most important barrier to improved performance.

  3.3  To increase the current rate of recycling is a feasible proposition. Currently only 37 per cent of households are served by kerbside collection. If local authorities provide a more comprehensive recycling service to households which adapt to their lifestyles the rate should increase significantly.

  3.4  However, in order for local authorities to work in partnership with their service provider to achieve this, there needs to be an awareness of the cost implications an enhanced service carries at a local and national government level.

  3.5  The traditional view held is that the intrinsic value of recyclable waste covers the costs of collection outlay but this is certainly not the case. Increased funding is needed if recycling rates are to improve significantly. The private contractor cannot be held financially responsible for meeting the Government's challenging targets. There is currently no sign in the tendering process for municipal waste contracts that local authorities are willing to accept the burden of recycling costs. Indeed we have experienced with one local authority an invitation to tender on the assumption that the private contractor should accept all the risks involved in meeting the targets set out in Waste Strategy 2000 over the lifetime of the contract.

4.  CONCLUSION

  4.1  Serviceteam welcomes the Government's Waste Strategy and its vision for managing waste and resources in aiming to deliver more sustainable development. Serviceteam believes that an integrated approach to sustainable waste management is the right approach. However, Serviceteam is concerned that an integrated approach may be interpreted as best delivered through integrated contracts. This interpretation would damage competitiveness in the market place as only a small number of vertically integrated companies will have the resources to deliver and there would be an inevitable reduction in service quality. To achieve the best result specialist contractors should continue to deliver value at the separate points of the service chain.

  4.2  Serviceteam would be happy to assist the Sub-committee with any further material it may require on this matter. We would also be happy to provide oral evidence if required.


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 19 March 2001