Rob Edmondson, MD of Amey’s Environmental Services business, looks at the challenges and opportunities, such as deposit return schemes and pay as you throw, could offer local authorities and contractors…
Local authorities have been outsourcing environmental services for decades. Many have gone out to the market lock, stock; others have selected elements that they wish to invite competition from the private sector on. Very few have kept all services in-house since the requirement to open up services to competition introduced in 1988.
Through various policy initiatives, competitive tendering has been encouraged by successive governments. On the whole and in the vast majority of cases, competition and input from the private sector has been immensely positive:
- Challenging how services are delivered and encouraging innovation
- Leveraging investment for major changes, new equipment and facilities, and
- Significantly improving cost and efficiencies whilst improving services and reliability.
Not all of this has ‘just’ been delivered by private sector companies – it is the introduction of competition which has led to better decisions, and better outcomes. There are some excellent examples of in-house services innovating through competition, offering not only the best value but in many case the best service.
To state that one is always better than the other when comparing in-house versus external service provision is to not only miss the point but also to miss out on a wealth of opportunities.
Horses For Courses
Name a policy through the evolution of competitive tendering and I’ll give you a slogan that accompanied it. ‘What works is what’s best’ is my favourite, as it encapsulates the entire point of why an organisation requiring a service or required to deliver a particular set of outcomes should look around for the best available method, the most efficient and effective option, and be open-minded to change.
This challenge mindset is something we pride ourselves on within Amey. It enables us to learn and draw on experiences in different sectors – rail, highways, consulting, FM and environmental services – and apply that knowledge to improve outcomes and deliver efficiencies.
However, sometimes it is right to admit that a particular service, or the demands of a particular outcome cannot be best delivered by the private sector. What – and who – works is what’s best, and sometimes that is an in-house solution. It may well be that through external competition and outsourcing, a public body has achieved the desired outcome, such as a major service change where it was best to share risk with or leverage investment from the private sector.
However, once those changes have been made, such as a move to commingled collection or shift to alternate weekly collections, a service could indeed be delivered best by an in-house team or further evolved through a different partnership arrangement. We have had some tough decisions to make at Amey over recent months and years, but all those decisions have been based on ensuring what works best.
The Challenge Posed By DRS & PAYT
There are two schools of thought forming around the potential introduction of a deposit return scheme. On the one hand, there are those who are minded to constrain its implementation in an attempt to reduce the impact it will have on local authority recycling collections, and on the other those who are keen to pursue a full scheme. At Amey, we’ve weighed up these options.
There are clearly going to be impacts from any deposit scheme – after all, that is the point. Things will change and there will be consequences. There is a real concern that if a part-scheme is pursued, for example where only ‘on the go’ sized containers are targeted, there will be consumer confusion and almost certainly unintended consequences.
Consumers will be confused because it brings yet another variable into the mix in choosing which bin to put your bottle in, and it is likely that some manufacturers, brands or retailers may play with pack sizes to avoid taxes, charges or levies.
Sugar & Spice
If pack sizes increase, then consumers may end up increasing their sugar intake at a time when the sugar tax has been brought in to reduce sugar intake. Levied on thresholds based on the amount of sugar ‘per 100 grams’, if pack sizes increase then overall sugar intake by individuals will also increase, whilst the sugar tax paid on the pack will not. And the container will escape a deposit, but could still end up as litter or in an on-street general waste bin.
A deposit on all drinks containers and all sizes will have a significant impact on local authority collections. However, this also presents an opportunity: the opportunity for a wholesale review of how services are delivered, to support the transition to a low-waste society and a low-waste economy. It’s time to spice things up, and properly evaluate Pay As You Throw (PAYT).
PAYT offers a huge opportunity to overhaul what, why and how waste and recyclables are collected. One of the other unintended consequences of a move to deposits on containers will be to drive manufacturers, brands and retailers to consider how products are provided, acting as a push-factor in evaluating returnable and refillable packs, as well as the materials and formats used. This reflects the general movement towards servitisation, considered in more detail in last year’s Presidential Report for the CIWM [link: https://goo.gl/UKtBRV], which shows the public are ready for change – including refillable and returnable packaging schemes as well as who collects their recyclables – and are rapidly adopting the technology driving the servitisation shift.
Introducing a full deposit return scheme will therefore have an impact greater than just the loss of containers from traditional kerbside collections. This will free up space in recycling facilities to target other materials and formats (as long as domestic markets are developed for these materials), and a broader single-use plastics tax, levy or charge also mooted by Government will ensure a floor value for some of these materials, leveraging investment in collection and reprocessing capacity. There’s a great opportunity for businesses to innovate here, and for the ‘plastics tax’ to deliver social, environmental and economic benefit.
The Opportunity Of A Lifetime
So PAYT is an almost certain consequence of container deposits and a broader levy on plastics. Now is the time to grasp this once-in-a-lifetime opportunity to overhaul this critical aspect of environmental protection. But it must be done well, consistently and fairly. There must not be losers – any scheme must be implemented equitably. We are sure it will be done well and will be carrying out our own research into how a scheme could be implemented, which we look forward to sharing with Government in due course.
The boldness of Government and the genuine joining up of strategy – industrial, environmental and digital – is to be welcomed, supported and, most important of all, seen through!
Those certainties in life – change, death and taxes – ring true: here’s to the end of disposable, single use rubbish, brought about by taxes and change.
I welcome your comments on these issues and look forward to working with many of you as this exciting industry evolves over the coming months and years.
