‘Red alert’ over increased costs with outsourced rubbish deal

‘Things are going to get worse’ said Mayor Jason Perry earlier this year. And looking at the outsourced deal he’s lining up to replace rubbish contractors Veolia, in that respect he is as good as his word, reports KEN LEE

We’ve bin done: Big Belly bins were bought at huge cost, to save Veolia the trouble of emptying them. With predictable results

Having binned Veolia, Croydon Council says that it could face increased costs when it agrees a deal with whichever company replaces the rubbish contractors ifrom the end of March 2025.

Croydon and the three other councils in the South London Waste Partnership – Sutton, Merton and Kingston – last year decided to give Veolia notice that their contract would not be renewed.

It was originally argued that economies of scale by doing a deal across the four boroughs would save the councils money. The reality was that, as with so much outsourcing, bidders offered unrealistically low prices in order to win the deal, and then did not provide the levels of service that had been expected.

In 2020, Croydon gave Veolia a £22million contract “uplift” in order to improve the service provided. There was no noticeable improvement.

Among the cost-cutting measures the council applied to ease Veolia’s workload, at least 1,000 bins have vanished from the streets of Croydon. Fewer bins to empty for Veolia requires fewer staff, and lowers their costs, but sees littering around the borough worse than ever. With fewer roadsweepers roaming the streets – another cost cutting wheeze introduced at Veolia’s suggestion – there’s even less chance that the litter would get cleared up, either.

Despite the borough suffering #Binmageddon as part of the Veolia deal, Croydon’s £82,000 per year Tory Mayor, Jason Perry, has no plans to bring the waste and refuse service in-house, and is now going to seek to outsource again. But without any of the economies of scale available when doing its deal via the SLWP.

And that all comes with a “red warning” over costs, according to a report submitted to Perry’s council cabinet.

Increased costs are among several risks surrounding the council’s procurement process.

The cost of delivering the borough’s waste collection, street cleaning and related services on a like-for-like basis will increase, the report said – with the solution on offer likely to be an even worse service than residents receive under Veolia.

“We are confident that this will be an attractive contract and generate a competitive interest from the market,” the cabinet was told in a report on the waste procurement plans.

“The council will continue to review service designs, technology, commercial dialogue will enable the council to highlight the markets proposed financial cost early in the process and gives the flexibility to amend the specification and service requirements within an agreed financial envelope.” Get that?

According to the report, other risks – rated as “amber” – include that four neighbouring councils are also in the market for contractors at the same time, which may “result in resource pressure within their respective bid teams”.

Oh, and the situation gets even worse for cash-strapped Croydon. “The private sector is changing and focusing on quality contracts along with reducing their appetite for risk.

Pay more, get less: it is possible that Mayor Perry will get a worse deal than Croydon had with Veolia

“This significantly reduces the size of the market and level of competition.”

Which sounds like the epitome of an all-round bad deal – from a council which has a terrible record in procurement already.

Perry’s nodding-dogs cabinet nonetheless approved the Mayor’s outsourcing plan, their main concern not being on service delivery to residents, but on shaving costs by not incurring any pension liabilities for the waste contractor’s workers.

“The outsourcing model carries much lower risks for the council in terms primarily of HR and pension contributions and is thus the recommended option,” the report said.

Mayor Perry, meanwhile, maintains that the cheaper, outsourced contract, likely to provide an even more reduced service than Veolia manages now, will somehow “improve the image of our borough and provide more reliable services for our residents”.

According to a statement issued from the council’s propaganda bunker, “Executive Mayor Jason Perry has also been clear that the council will be taking a greater focus on contract management within any new agreement to enable the council to hold contractors to account if they underperform.”

Although long-suffering residents have heard all that before, too, with no appreciable improvement in the services they receive.

But as is becoming very clear, with Mayor Perry, the people of Croydon always seem to pay more and get less.

Read more: How Mayor Perry was shamed to take action by a video nasty
Read more: ‘The camera cannot record the overpowering smell of urine’

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5 Responses to ‘Red alert’ over increased costs with outsourced rubbish deal

  1. John Wentworth says:

    Bringing the service back in-house is definitely not the answer. Parks maintenance was brought back in and now look at the state of our park. We need to focus on delivering a quality service. Other boroughs do it so can Croydon.

    • Peter Underwood says:

      The Parks maintenance service is an example of what happens when a Council brings a service back in-house and the savings disappear into the financial black hole of an incompetent Labour administration.

      In a properly run and financed public sector services can be delivered to a much higher standard for the same cost because you don’t have to pay out ludicrous salaries to private management and dividends to leach-like shareholders.

      If a service is provided in the public sector then Councillors can also be held directly accountable for the service by local residents – no more hiding behind the contractor or the contract.

  2. Lewis White says:

    I don’t know if I am particularly lucky, but our refuse team and recycling teams who collect from my road do a very good job, Normally, no dropped litter lies in the road after the dustcart has departed.

    Likewise, as a fairly frequent flier at the Purley Oaks recycling centre, run by Veolia, I have never had any cause for complaint regarding the staff, all of whom are genuinely pleasant and helpful to the customers, ready to help those who need a hand in getting their items up the steep stairways to the bins.

    What I really like is that they close the gate exactly on time, not a second early, and don’t hassle the stragglers who get in late and stay beyond gate closing time.

    The only annoyimg delay has been when the depot has been closed at the busiest peak times, on a weekend (I have experienced this at Factory Lane and Purley Oaks a few times), but not recently, to allow empty bins to be moved into position, and full ones taken away. The bins had not been changed on a weekday,

    That was presumaby due to poor management or wider transport problems.

    The major hassle with the Purley oaks depot is that users still have to walk up a flight of metal stairs to a raised gantry, in order to throw their recycling or non reyclables into the bins, whereas many recycling centres have the bins at lower level. That is presumably because the Council have never found the funding for the types of centre where you drive up a ramp to a higher level, and walk at that level to cast your rubbish etc into the bins below. Not a Veolia issue?

    As to street bins, and street cleaning, I have assumed that it was the Client (aka The Council) who decided to try to save money by reducing the specified frequency of cleansing, and then tried to save more money by removing bins, and reducing the frequency of street sweeping. Surely, a contrcatior can’t just go round removing bins, or decide not to sweep the roads, unless the client tells it to?

    Presumably, the hope was that people would take their litter home, and not drop it on the pavement once the few “Big belly” bins had got full up.

    Will this still not be the case if and when a new contractor comes in?

    Isn’t it mostly to do with the budget the Council has to spend, and also the number of council staff that it can afford to employ to check on the work carried out by the contractor, in terms of quality?. Without quality control and penalties for underperformance, how can things get better?

    In reality, if someone else gets the contract, the majority of Veolia staff will be retained under the “TUPE ” and will carry on working on their normal jobs.

    Until human-sized robotic bin androids and street sweeperbots come in, a frightening prospect, the only way of emptying the bins and sweeping the streets is by human muscle power.

    The only way of reducing spend is to reduce the service– or reduce the dividends to shareholders. Or–it seems really mean– stop paying a pension to the workers?.

  3. Haydn White says:

    Having let a few service contacts my self I always found them to be fairly simple providing you know exactly what it is you want done and when you want it done, you also need to understand how the contractor intends to do it and that his schedule / method is practical to both parties, and the need to keep any non scheduled operations to a minimum as they come at high cost , all contractors live in hope of and will endeavour to make claims for extras and their success in this area depends almost entirely on how well you constructed the original contract hence the need for a person who understands what was wanted in the first place and their vigilance in enforcing it. So as a wild stab in the dark the councils involved failed in the first and last requirement , no doubt they got rid of the people who knew how to do things a long time ago.

  4. Tod Walter says:

    To many supervisors in the office that do not have a clue.

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