PUBLIC SERVICES & HEALTH POLICY PANEL – 14 JUNE 2007
PART I - NOT DELEGATED
10.
COMMERCIAL WASTE RECYCLING
(DLE)
1.
Summary
1.1
This report advises on a recent survey of customers’ attitudes to recycling
commercial waste, and recommends a pilot service.
2.
Details
2.1
Public Services & Health Policy Panel at its meeting of 02 November 2006
considered a report on fees & charges for commercial waste and other
environmental services. The report detailed the pressures on the commercial
waste service in terms of its cost-neutrality and the new Landfill Allowance
Trading Scheme (LATS). The report recommended significant increases in
charges for collecting commercial waste, and increases of typically 33% for
2007/08 were agreed by Executive Committee at its meeting of 05 February
2007 (Minute EX 149/06 refers). It was also agreed that officers would present
a report on commercial waste recycling to a future meeting. At the same time
further increases were agreed for 2008/09 and 2009/10, although the
Chancellor of the Exchequer announced in the Budget that landfill tax was to
increase by £8 per tonne each year, and not £3 as previously planned, and so
the planned price increases for 2008/09 and 2009/10 will have to be revised.
2.2
In terms of current BVPIs, there is still no real incentive for waste collection
authorities to recycle commercial waste, since the BV82 and BV84 indicators
measure domestic waste only. The advent of LATS however requires that
councils begin to reduce landfilling of municipal waste, which includes both
domestic and commercial waste. One option for achieving this is for councils to
price themselves out of the commercial waste market. As stated in the
November 2006 report, the government does not view this as within the spirit of
the legislation. Furthermore, above-inflation increases in councils’ prices have
not resulted in significant loss of customers. It is believed that new legislation
on pre-treatment which involves private waste collectors and their customers,
but does not affect local authorities (since they are covered by LATS), has
resulted in private collectors’ charges increasing at broadly the same rate as
councils’ charges.
2.3
The other option outlined in the November report was to introduce commercial
waste recycling, however officers were concerned that charges for any recycling
service would have to be high enough to maintain cost-neutrality, but at the
same time low enough to create an incentive for customers to separate their
waste. Only two other authorities are known to operate commercial waste
recycling services (Selby District and London Borough of Bexley). Little
information was available, although it was known that Selby had carried out
some market research and had developed its collections into a service branded
as “SORTED”, and both authorities were offering their customers prices set
considerably lower than those for their conventional commercial waste service.
2.4
Officers wrote to all commercial waste customers in March, advising them that
charges were again increasing significantly. To date only one customer has
ceased his contract with the council. At the same time, customers of the pub
glass service were written to, advising them of the new £2.40 charge for the
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service. A small number of pubs have reduced the number of bins emptied
each week.
2.5
The commercial waste customers were also sent a questionnaire on recycling
to ascertain customers’ views. The questionnaire asked 3 questions. The first
question asked customers which of a choice of 6 statements they agreed with
most. The second and third questions asked what type of business was being
operated and what type of waste was being generated. The six options in the
first question were:
 I would be happy to separate out all my recyclable waste regardless of
anything else

I would separate all my recyclables if the council gave me a small
discount from my commercial waste bill

I would need a substantial discount to make me separate recyclables

I would only recycle if the council collected all the recyclables mixed
together

I don’t have room on my premises for separate recycling bins

I don’t care about the costs I pay – just as long as the council gets rid of
my waste.
2.6
By mid May 278 customers had responded. This represents 44% of the
customer base, which compares with 42% of Selby’s customers who responded
to their survey. Appendix 1 summarises the results in tabular and graphic
forms.
2.7
The main findings are encouraging. Two thirds (66%) of customers overall said
that they would be happy to recycle, including those who said they would
require a small discount or a substantial discount to make them do so. A further
9% said that they would recycle, but only if the council collected all recyclables
co-mingled. A fifth said they had no room on their premises, although officers’
knowledge of some of the premises concerned would suggest that many of
these would in fact have sufficient room. Only 4% overall said that they did not
care.
2.8
When the results are analysed in more detail it can be seen that there is a
marked difference between the responses from restaurants and other types of
business. Officers believe therefore that it would not be worthwhile targeting
this group as potential recycling customers at this stage. This is further
explored in paragraph 7 below. It is also interesting that the attitude of pubs is
very different from that of restaurants. No pubs chose the “co mingled only”
option, and this perhaps reflects that pubs are already largely accustomed to
waste separation in relation to the pub glass service.
2.9
Customers’ waste appears to consist of mostly paper and cardboard. When
these two fractions are taken together, they represent 52% of waste in
customers’ views. Only a small amount of the waste consists of food waste
(3%) and glass (1%). The remaining 44% is described as “mixed” and officers
consider that up to half of this would be paper and card. Although these figures
are only indicative, not based on known tonnages, officers are confident that
1,500 tonnes of paper and card is available in this waste stream per annum.
Diversion of this tonnage from landfill would represent a significant share of
TRDC’s contribution to Hertfordshire’s LATS position.
2.10
Although customers’ attitudes are very encouraging, many other issues would
need to be resolved prior to going ahead with a commercial recycling service.
These include:

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Availability of staff and vehicle. It is possible that these might be needed
only part time. Selby’s experience is that the main commercial waste
route did not decrease in size, whilst the new recycling route did not
warrant a full week. In order for this to be cost effective, options for
utilising any spare capacity, including sharing with neighbouring
authorities, would have to be explored.
2.11

Financial viability. Whilst longer term landfill is going to become
prohibitive, income levels will have to be sufficient to cover collection
costs and any cost of disposing of the recyclables. Indications are that
paper/card mix, for example, currently attracts a small positive value per
tonne, but that could change. Meanwhile the conventional waste
charges would have to be monitored closely to ensure that disposal cost
savings were passed on to recycling customers whilst collection costs
were still being covered by the conventional waste charges.

Bins. If two thirds of customers joined the scheme and had one bin
each, the bins would cost £6,000 to £10,000 to purchase, however a
customer with one 1100 litre bin might choose to change to one 660 for
waste and two 240s for recycling, but this would result in a higher price.

How customers perceive the “discount” they receive. Although half of
customers were happy to recycle with a small or no reward, prices would
have to be carefully pitched. The current price structure could present
difficulties with making charges for smaller recycling bins more attractive
than larger sizes of conventional waste bins.

Contamination. If the recycling and waste prices are not balanced
correctly, an incentive might exist to sign up for recycling and get rid of
waste disguised as recycling. A special contaminated charge would
have to be introduced, set at a high value to discourage this.

Budgets. The recent and planned increases in charges are expected to
create a surplus. This will be reviewed as part of the regular budget
monitoring process, and following the trial.
On a more positive note, the following should be acknowledged:

Diverting 1,500 tonnes of commercial waste from landfill would reduce
the cost for disposing of the waste by approximately £65k. Because of
the increased (£8 instead of £3) landfill tax escalator, the saving in
2008/09 would be £77k and in 2009/10 it would be £90k. If Herts CC is
in deficit with its LATS allowances by that time, the 2009/10 figure
would become £220k. These figures all produce scope for offering
lower recycling collection costs as time progresses.

Recycling credits, paid to TRDC by Hertfordshire county council, are not
currently awarded in respect of commercial waste. However as part of
the review of the joint waste management strategy these financial
arrangements are being reviewed, and so there may be an opportunity
for commercial waste to earn credits in the future.
2.12
Clearly there are uncertainties, not the least of which are the likelihood of
uptake of the service and ease of setting prices correctly. Officers believe
therefore that it makes sense to run a pilot service before making a firm
decision.
2.13
Such a pilot could involve a cross section of customers, including a proportion
who were not as keen as others, in order to gauge likely ease of attracting
future customers. The material collected would be paper / card mix at this
stage. Because of the difficulty of setting prices for smaller bins at this stage,
customers would be offered a refund from their current agreed contract for the
duration of the pilot. Officers would suggest that 40% be refunded, since this is
the approximate value, across all bin sizes, of the disposal element of the
current charges.
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2.14
Officers propose that previously used bins, such as those collected from
residents requesting a different sized bin, or damaged / repairable bins, could
be cleaned and brought into service for the pilot. There is also a capital budget
for provision of commercial waste bins, part of which could be used for bins for
the pilot. If the pilot is unsuccessful, these bins could be deployed to customers
in the future for conventional commercial waste. Officers have recently been
deploying resources to deal with contamination in domestic recycling,
particularly flats, as reported previously, and the work done to date has resulted
in reduced contamination problems. With some minor re-arranging, officers
consider that a pilot crew could be brought into operation for 1 to 2 days per
week.
3.
Options/Reasons for Recommendation
3.1
The recommendations are being made to adapt to the increasingly high costs of
waste disposal, and the challenge of LATS.
3.2
An alternative option would be to continue to offer conventional commercial
waste collection services only, however experience has shown that demand for
the service persists despite huge price increases, and if the County Council’s
LATS allowances become exhausted the price will become prohibitive.
4.
Policy/Budget Implications
4.1
The recommendations in this report are within the Council’s agreed policy and
support the strategic plan objective 3.4.1 (ensuring town centres and local
shopping parades are well maintained, clean and tidy), but are not within
existing budgets.
5.
Financial Implications
5.1
There would be a small impact on the income received during the trial, however
this would be offset by a commensurate saving in landfill costs. The full
financial implications of a commercial recycling service will not be known until
the trial has been carried out.
6.
Legal Implications
6.1
There is no legal imperative for councils to recycle commercial waste, however
the council has a statutory duty to collect commercial waste if requested to do
so, and it may make a charge for so doing. The LATS however introduces a
duty on local authorities to reduce the amount of municipal waste (which
includes commercial waste) being sent to landfill.
7.
Equal Opportunities Implications
7.1
Relevance Test
7.2
Has a relevance test been completed for Equality Impact?
Yes
Did the relevance test conclude a full impact assessment
was required?
Yes
Impact Assessment
A survey was carried out on all (600+) customers in March / April 2007. 42%
responded. Questions were aimed at determining businesses’ willingness to
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separate out waste for recycling, composition of waste, and breakdown by types
of business. Restaurants’ and cafés’ views were generally more negative
towards separating waste out for recycling than other types of business.
Restaurant and café questionnaires were isolated and further broken down into
“traditional” and “ethnic” restaurants, and there was anecdotal but clear
evidence that nearly all of the “ethnic” restaurants were more negative than
positive towards the idea of recycling their waste, whereas “traditional”
restaurants answered the question positively to the same degree as other
business types. There will need to be further research into individual
businesses’ attitudes. It is recommended that the possibility of setting up this
service is explored further, but that restaurants are not pursued actively until
this issue is better researched, and reviewed once the service is up and
running.
8.
Staffing Implications
8.1
As outlined in 2.14 above, staffing is available for a pilot scheme, however there
is likely to be an impact on Environmental Protection support staff workload.
9.
Environmental Implications
9.1
The recommendation would be of benefit to the environment in that less
municipal waste would be landfilled.
10.
Community Safety Implications
10.1
None for the purposes of this report
11.
Customer Services Centre Implications
11.1
None for the purposes of this report
12.
Website Implications
12.1
If the trial is successful and the service was fully implemented, officers would
intend that the service be accessible via the council’s website.
13.
13.1
Risk Management Implications
The Council has agreed its risk management strategy which can be found on
the website at http://www.threerivers.gov.uk. The risk management implications
of this report are detailed below.
13.2
The subject of this report is covered by the Environmental Protection service
plan. Any risks resulting from this report will be included in the risk register and,
if necessary, managed within this plan.
The following table gives the risks if the recommendation(s) are agreed,
together with a scored assessment of their impact and likelihood:
13.3
1
2
3
4
13.4
Description of Risk
Service not viable / cost neutral
Current price structure inhibits incentives to recycle
Service becomes popular but does not divert
enough waste from landfill
Customers contaminate recycling bins in attempt to
obtain cheaper waste disposal
Likelihood
E
D
D
II
C
The following table gives the risks that would exist if the recommendation is
rejected, together with a scored assessment of their impact and likelihood:
Description of Risk
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Impact
II
II
II
Impact
Likelihood
77 Increased charges result in decreased
uptake of services and lower overall income
5 Failure to meet TRDC share of LATS
6 Waste disposal Costs increase
13.5
II
E
III
III
C
B
Of the risks above the following are already included in service plans:
Description of Risk
77
The above risks are plotted on the matrix below depending on the scored
assessments of impact and likelihood, detailed definitions of which are included
in the risk management strategy. The Council has determined its aversion to
risk and is prepared to tolerate risks where the combination of impact and
likelihood are plotted in the shaded area of the matrix. The remaining risks
require a treatment plan.
Likelihood
13.6
Service Plan
Increased charges result in decreased uptake Environmental
Protection
of services and lower overall income
A
B
C
D
E
F
4
2 3
1 77
I
II
6
5
III
IV
Impact
Likelihood
V = Catastrophic
A = >98%
IV = Critical
B = 75% - 98%
III = Significant
C = 50% - 75%
II = Marginal
D = 25% - 50%
I = Negligible
E = 2% - 25%
V
F = <2%
Impact
13.7
In the officers’ opinion none of the new risks above, were they to come about,
would seriously prejudice the achievement of the Strategic Plan, and are
therefore operational risks. The effectiveness of treatment plans are reviewed
by the Audit Committee annually.
14.
Recommendation
14.1
That the Panel Recommends to Executive Committee that a commercial waste
recycling trial be carried out between October 2007 and March 2008, and
14.2
That officers present a further report on the findings of the trial.
Report prepared by: Karl Murdoch, Head of Environmental Protection
Background Papers
Commercial Waste Survey returns
Selby District Council Sorted Information Pack
APPENDICES / ATTACHMENTS
Appendix 1 - Commercial Waste Customer Survey Results
Appendix 2 - Equality Impact Assessment
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APPENDIX 1
Commercial Waste Recycling Survey March 2007
4%
21%
21%
9%
26%
19%
Happy to separate regardless
co mingled only
Separate if small discount
no room
separate if substantial dicount
please just get rid of waste
Commercial waste recycling - waste composition
Paper
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Card
Paper & Card
Food
Glass
Mixed
APPENDIX 1
Analysis of Business Types' Views
80
70
60
50
40
30
20
10
0
Shop
Pub
Restaurant
Happy to separate regardless
co mingled only
Office
Separate if small discount
no room
Workshop
separate if substantial dicount
please just get rid of waste
Restaurants only
Happy to separate regardless
co mingled only
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Separate if small discount
no room
separate if substantial dicount
please just get rid of waste
Other
APPENDIX 1
In Favour / not in Favour, by Type
60
50
40
30
20
10
0
Shop
Pub
Restaurant
Generally Favourable
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Office
Generally not in Favour
Workshop
Other
APPENDIX 2
FULL EQUALITIES IMPACT ASSESSMENT FORM B
Function being assessed:
Commercial Waste (Recycling)
Is this a new function or a review of an existing function?
New function under consideration
What are the aims/purpose of the function?
The Landfill Allowance Trading Scheme reduces year on year the amount of municipal
waste (domestic and commercial) which can be landfilled by councils. This means that
councils either have to stop collecting commercial waste (mandatory only if requested to do
so) or do something with it other than landfilling it.
Is the function designed to meet specific needs such as the needs of minority ethnic
groups, older people, disabled people etc?
Businesses only
What information has been gathered on this function? (Indicate the type of information
gathered e.g. statistics, consultation, other monitoring information)? Attach a summary or
refer to where the evidence can be found.
Survey carried out on all (600+) customers in March / April 2007. 42% responded.
Questions aimed at determining businesses’ willingness to separate out waste for
recycling, composition of waste, breakdown of types of business.
Does your analysis of the information show different outcomes for different groups (higher
or lower uptake/failure to access/receive a poorer or inferior service)? If yes, which aspects
of the policy or function contribute to inequality?
Anecdotally. Restaurants’ / cafes’ views were generally more negative towards separating
waste out for recycling than other types of business. The questionnaires were isolated and
further broken down into “traditional” and “ethnic” restaurants, and it was clear that nearly
all of the “ethnic” restaurants were more negative than positive towards the idea of recycling
their waste, whereas “traditional” restaurants answered the question positively to the same
degree as other business types.
Are these differences justified (e.g. are there legislative or other constraints)? If they are,
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explain in what way.
Not known.
What action needs to be taken as a result of this Equality Impact Assessment to address
any detrimental impacts or meet previously unidentified need?
Further research into individual businesses’ attitudes.
When will you evaluate the impact of action taken? (When next programmed on the
Corporate Equality Plan? Post project review?)
Recommendation being made is to further explore the possibility of setting up this service,
but to concentrate less on restaurants initially – i.e. not actively pursuing them until this
issue is better researched. Review once service is up and running.
Assessment completed by:
NAME
Karl Murdoch
SERVICE Environmental Protection
DATE
24.04.07
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