MEMORANDUM BY SERVICETEAM (DSW 96)
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
(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.
2.1 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
targetsthe 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
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
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
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.
4.1 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