In the ever-evolving landscape of waste management policies and regulations that has followed the Environment Act, local authorities feel as though they are in a perpetual state of waste policy uncertainty. With uncertainty on whether the Resources and Waste Strategy will be implemented and the constant anticipation of announcements, decision-makers face a challenging task when it comes to making long-term plans. This ambiguity not only affects their ability to provide effective waste management services but also leaves them in a quandary when it comes to expiring contracts. And with five years now passing since the publishing of the Resources and Waste Strategy, many waste service contracts are now reaching expiry at this uncertain time. One response has been to enter into short interim contracts, although with many of these now needing to be extended or renewed, the value for money of this approach becomes questionable.
At WRM, we understand the challenges that local authorities face in this dynamic policy environment, and we’ve developed a procurement approach that empowers them with the flexibility to adapt to foreseeable changes. We call these innovative solutions “service options.”
Service Options: Building Resilience into Waste Management Contracts
Service options, within the context of waste management contracts, offer a way forward to local authorities looking to navigate the uncertain policy landscape. These options enable authorities to address a range of potential policy changes and unforeseen circumstances while maintaining the continuity of an established service.
Consider the scenario of mixed recycling requirements. Under our service option approach, local authorities can build price adjusted mechanisms into their contracts to move to separately collected materials if and when needed. This strategic approach allows them to enter into long-term contracts while accounting for all foreseeable options.
The Challenge of Waste Policy Uncertainty
One of the main issues plaguing local authorities is the lack of clear and consistent waste management policies. Waiting on announcements that may or may not materialize leaves decision-makers in a state of limbo. This ambiguity often leads to the temptation to opt for short-term contracts, which, in reality, provide poor value.
The Costly Pitfall of Short-Term Contracts
Short-term contracts, typically lasting only 2-3 years, might seem like a pragmatic response to policy uncertainty. However, in practice, they prove to be expensive and inefficient. These contracts provide no guarantee of policy stability and require local authorities to repeatedly react to changing circumstances. This reactive approach not only disrupts waste management operations but also drains resources that could be better utilized elsewhere.
The Long-Term Solution: Service Options
In contrast, a long-term contract with service options, as demonstrated in cases like Warrington and Luton, offers a strategic solution. While there is no certainty that the built-in options will be exercised, they act as an insurance policy against policy changes. This approach provides flexibility in managing dry and mixed recycling, food waste, and residual waste—whether in full or in part—while aligning with the Environment Act. After all, all the environment act outcome are at least foreseeable.
Market Confidence Through Soft Market Testing
Local authorities can also bolster market confidence through soft market testing. This process involves engaging with waste management companies to gauge their interest and willingness to work under various contract structures. When authorities present a long-term contract with service options, our recent soft market testing has shown that the solution garners a more positive response from potential partners. This not only provides options for local authorities but also fosters a competitive and attractive market for waste management services.
Don’t Wait, Act with Confidence
Local authorities need not remain passive in the face of waste policy uncertainty and the implementation of the Environment Act and Resources & Waste Strategy. Instead, embracing long-term contracts with service options can provide a pathway to stability and resilience in a turbulent landscape. It’s time to ask yourself, “What are we waiting for?”. By taking proactive steps and leveraging innovative procurement approaches, local authorities can ensure the efficient and sustainable management of their communities’ waste, regardless of the policy shifts on the horizon.