‘Anyone would think Croydon’s got money to burn’

Rows over Big Belly Bins in the Town Hall chamber will prove to be mild diversions when the public realises the massive profits likely to be made by waste and incinerator operators from their contracts with south London councils, as WALTER CRONXITE reports

Under a cloud: the construction of the incinerator at Beddington Lane continues, promising fat profits for operators Viridor at public expense

Under a cloud: the construction of the incinerator at Beddington Lane continues, promising fat profits for operators Viridor at the expense of the public in Croydon and Sutton

As Croydon’s “clean and green” council merrily goes ahead with a Tory-backed scheme to build an incinerator that will pollute the air across south London for decades to come, while recommending its rubbish-collecting contractors for a multi-million-pound deal with neighbouring boroughs, local authorities in the rest of the country are waking up to the fact that they are paying far too much to profiteering companies, and risking serious damage to the environment.

Last month, Sheffield City Council in Yorkshire – where they have long understood that “where there’s muck there’s brass” – binned their waste services contract with Veolia 20 years early.

Yet the South London Waste Partnership, which comprises Croydon, Sutton, Kingston and Merton, has dozily gone ahead and just agreed a £38million, eight-year deal for street cleaning and rubbish collecting with Veolia.

An unscientific opinion poll conducted by this website found that 68per cent of our readers are dissatisfied with Veolia’s performance in Croydon.

While Labour-lite Croydon distracts from the new service arrangements with Veolia by hiding behind Big Belly Bins and few other new gadgets, Sheffield has taken its £26million-a-year deal with Veolia to the dump. Veolia had been Sheffield’s waste contractors since 2001, the contract awarded when the city council was controlled by the Liberal Democrats.

“Our contract with Veolia, which was signed 16 years ago, is no longer meeting our needs and is no longer compatible with the tough financial landscape in which the government is forcing us to operate,” Bryan Lodge, Sheffield’s cabinet member for the environment, said last week.

As well as collecting and disposing of waste, Veolia in Sheffield also operates what they insist on calling an Energy Recovery Facility – meaning an incinerator – and a “district heating network”, basically heating up water at the incinerator and pumping it around the neighbourhood.

Such arrangements make massive profits for the incinerator operators. The councils who use them end up paying three times over: they pay the contractors to collect the waste, and they then pay the incinerator operator millions to burn the rubbish collected (while, invariably, recycling rates go down in areas which introduce incinerators). The incinerator operators then charge property owners – often including the council – when it sells them the electricity or heat that it generates.


The latest accounts from the Viridor-operated Lakeside incinerator near Heathrow, with a £24m operating profit for burning rubbish and generating heat

It’s this kind of arrangement which neighbouring Sutton wants to introduce to properties, possibly including some in Croydon, by selling hot water through its SDEN heat network. A decision from house-builders Barratt’s over whether to incorporate SDEN hot-water piping in a development in Hackbridge is still awaited.

Under the scheme, the council will receive some share of the money made from heat generation, but “that’s just crumbs from the table”, according to one concerned Sutton councillor.

“Anyone would think that our councils have got money to burn,” independent Sutton councillor Nick Mattey told Inside Croydon.

South London Waste Partnership’s four boroughs are to pay £1billion over 25 years to Viridor to operate the incinerator on Beddington Lane, right on the borough boundary with Croydon. Viridor will get to keep most of the profits generated from its heat network.

Part of the problem with the opacity of the procurement process is that the four boroughs have effectively outsourced that responsibility to SLWP, so that there is no possible debate over the merits or otherwise of the contracts proposed outside that committee.

As one Conservative councillor from an SLWP borough told Inside Croydon, “By delegating authority to the SLWP, there’s a real democratic deficit in the awarding of public contracts worth billions of pounds. Opposition councillors are denied any access to the details of any deals. It’s a really unsatisfactory situation for the tax-payer.”

And a very profitable one for some private companies. A Viridor-run incinerator at Lakeside, near Heathrow, which is already fuelled by 95,000 tons of south London’s rubbish each year from the SLWP, has just reported a £24million operating profit (before tax) for 2015 alone.

Even the operating company’s directors have expressed surprise at the massive profits they have made out of their public sector contracts. “The performance during the year again exceeded expectations. Both waste throughput and electricity generation remained well ahead of design specification,” the company secretary purrs in his board’s report.

See the latest Lakeside company accounts here.

Tommy Rotten: Tory councillor revels in being a controversial figure

Phil Thomas: Tory councillor ensured an incinerator was built, just not in Croydon

Mattey is a councillor for Beddington North, the ward where the incinerator is being built. He was kicked out of Sutton’s ruling LibDem group after he started asking questions over the incinerator deal.

He said, “Sutton and Croydon councils ignored the fact that they would get all the pollution and the heavy goods road traffic, while Viridor would have free rein to burn 300,000 tons of rubbish every year sourced from whoever paid the highest gate fees.

“Councillor Phil Thomas, the Conservative councillor from Croydon who brought in the incinerator deal for his borough, told me that his only concern was that the incinerator would not be built in Croydon.

“Here in Sutton, Councillor John Drage, who was a lifetime mate of the chairman of Viridor, was a member of the SLWP committee that rubber-stamped the £1billion deal with Viridor, while a £275,000 grant from Viridor’s charity was handed over to rebuild his local church,” Mattey said.

“Councils bring the rubbish to the incinerator, pay huge gate fees and the incinerator operator makes millions selling the electricity.

“The councils are promised the hot water for the heat network, but that’s just crumbs off the table.”

  • Inside Croydon is Croydon’s only independent news source, still based in the heart of the borough. In 2016, we averaged 17,000 page views every week
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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
This entry was posted in Business, Croydon Council, Environment, London-wide issues, Nick Mattey, Refuse collection, Sutton Council, Veolia, Waste incinerator and tagged , , , , , , , , , , . Bookmark the permalink.

2 Responses to ‘Anyone would think Croydon’s got money to burn’

  1. Pingback: And the chimneys… | STOP the South London Incinerator

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