The purpose of this Technical Note is to provide Elected Members with an update in relation to the increase in recycling costs for the waste service, following changes in the recycling market in recent years.
The allocation of budgets for the treatment of recycled materials was set as part of the 2019/20 budget process. At this time the Council had a contract in place for both recycling streams with Saica Natur. The Council were receiving a £1 rebate, per tonne, on the brown bin stream of cans, glass and plastic.
In January 2020, officers were approached by our contractor Saica Natur, informing us that as a result in the changing market, a gate fee of £21.00 would be applied per tonne, to our cans, glass and plastic mixed stream. Following discussions with both our Procurement and Legal teams, the new gate fee was applied at the contract pricing review period on 16th March 2020.
The contract with Saica Natur was due to end on 20th September 2020. Due to the ongoing restrictions through the pandemic response, the contract was extended for an 8 month period. This allowed officers to work with the procurement team to put the recycling treatment contract out to full tender.
Upon conclusion of the tender process, the contract for the brown bin stream was awarded to a new contractor, Levenseat Ltd on 1st May 2021. The new contract applied a £42.75 gate fee per tonne to this material mix due to further changes in market conditions.
The past 3 years have seen a fluctuation in the recycling markets and an increase in the recycling tonnage collected by the Council. This has resulted in a significant increase in spend for Waste Services, as can be demonstrated in the table below.
|
Annual TOTAL – Brown Bin |
|||
|---|---|---|---|
|
Gate Fee |
Tonnage |
Cost |
|
|
2019/20 |
£1.00 (Rebate) |
5034.44 |
£5034.44 (Income) |
|
2020/21 |
£21.00 |
5675.78 |
£119,191.38 |
|
2021/22 |
£42.75 |
5825.7 |
£249,048.68 |
- Estimates for 2021/22 taken from P6 projections.
It is considered that this increased spend may be marginally off-set by a rebate through the value in the blue bin paper and card stream, however with the continued changes in the market value and contract pricing, it is difficult to quantify the full effect at the present time.
Officers will continue to monitor costs and provide updates through the financial reporting in line with committee cycles.