By John Crawford, an expert in the waste management industry for over 46 years.
It’s easy to understand why so many skip hire companies are annoyed when they see the Council muscling into their patch but it might be worthwhile remembering how these services started.
Councils must collect household waste (more or less free of charge) and also commercial waste if requested, but only if they have the gear to collect it, and they fully recover all the associated costs. In the simplest case, a shopkeeper might ask the Council to provide and service a wheelie bin and if the Council RCV is passing the shop on its round, it’s relatively easy to calculate the (marginal) extra expense of labour, fuel, running, admin, disposal costs etc to service the bin. Commercial waste is usually around 30-40% of the density of household waste (unless the customer is a glazier or joiner) so it’s not difficult to work out how much the disposal charge will be. The Council’s charge would be well below that quoted by a commercial operator who’d need to cost out the service on a one-off basis, then build in a profit margin. This type of arrangement has been at the centre of Councils’ commercial waste services for decades. It becomes a bit more complicated if a commercial customer asks for a service that doesn’t fit in with the Council’s rounds, and strictly speaking the charge should increase if a special arrangement is needed to provide the service.
Councils also have to uplift bulky items of household waste and remove fly-tipping from their property, so some have either used private contractors for skip hire or bought their own skips and trucks.
Many Councils have Direct Works or Direct Services Departments that maintain their property and in the larger Councils the expenditure on using external contractors to provide skip hire services often reaches a point where it becomes more cost-effective to buy their own skips and trucks. There’s nothing wrong with this approach and it’s perfectly legal.
The grey area arises when Councils are asked by householders and/or commercial customers to provide skip hire services. As has been said previously in these columns, the majority of the public don’t understand that the disposal costs for emptying a skip, inclusive of the Landfill Tax can often run to three figures. And it’s no surprise that commercial customers will go for the cheapest deal. But the Council should be recovering all its costs, otherwise it’s breaking the law.
It’s not helped either by Council officials who get carried away with ‘competing with the private sector,’ but have little idea of the commercial risks involved with buying a fleet of trucks, a load of skips and trying to maximise their usage every working day of the year to make a reasonable return. The Audit Commission is supposed to ensure that Council taxpayers money isn’t used to subsidise commercial waste services but it has been bruised recently after being criticised by Mr Pickle’s Department after it advised Councils that fortnightly collections of residual household waste were a good way to improve recycling performances.
Strictly speaking, there’s nothing to stop an aggrieved Skip Operator from submitting a Freedom of Information (FOI) request to their Council asking how its commercial waste (including skip hire) charges are calculated, and if a separate set of accounts is kept to prove there’s no subsidy from the taxpayer?
If nothing else it would focus the minds of all concerned on the need to keep a business eye on all their activities.