A report updating councillors on future options for recycling and waste services in Bridgend County will be discussed by a council scrutiny committee next week (pdf).
Although the preferred option of officers was to continue to outsource the services to a private contractor, in April the Cabinet decided to keep all options on the table.
The Cabinet requested further research on the two options of taking services in-house and establishing a council-owned company (LATCo), which consultants have since provided (pdf).
Regardless of which option the council goes for, consultants believe that for a new service to be in place at the point the current Plan B contract ends in April 2026, work behind the scenes would need to start before the end of 2024.
Officers say that BCBC could negotiate a one-year extension to the contract with Plan B if more time is needed.
Bringing waste and recycling services in-house.
This remains the most expensive option, with an expected cost of £9.37million a year and set-up costs of £770,000.
The main advantage is that BCBC would have full control over the service. That brings with it more flexibility as well as the advantage of no longer having to meet strict profit margins.
However, it would need a management restructure and up-front spending on new services such as IT systems, health & safety compliance and specialist backroom support.
Transfer the service to a council-owned company (LATCo).
The consultant’s report says that LATCos have often been set up when an existing contractor has left the recycling business.
They have a mixed record in the rest of Wales and the UK in terms of profit and loss. Carmarthenshire’s CWM Environmental made a £1.1million loss in 2021-22 (largely due to a fire), but Cumbria Waste Management made a £2.8million profit in 2022-23.
BCBC would take on all of the risks, but the service can make a profit and compete as a third-party/commercial waste company (within reason).
Another benefit (though it could be considered a disadvantage for potential staff) is that LATCo employees would not be part of the local government pension scheme and could be part of a lower-cost pension scheme.
One of the biggest risks is the transferring of staff and IT systems “overnight” from a contractor to a LATCo.
The report goes into more detail on what BCBC would need to do to set up a LATCo. Interestingly, it notes that if BCBC decides to go down this route, they would seek to merge the existing corporate landlord service (buildings maintenance, school maintenance etc.) into the LATCo.
Other commercial services the LATCo could offer to generate extra income include HGV training, the sale of materials, private MOTs and commercial waste processing.
This has the lowest running costs at £9.02million a year. However, the set-up costs were the highest at £971,000.
No further information was provided on re-procurement – which is what BCBC currently does – as the Cabinet had rejected any further work being undertaken on it. It remains the cheapest option overall.
