Commercialising the Trade Waste Collection Service
Commercialising the Trade Waste Collection Service
5:1

in year return on investment


Like all local authorities, Luton Borough Council (LBC) has been carefully reviewing its services to ensure that they provide value for money and meet the needs of service users.

For the trade waste collection service, the Authority decided that it was appropriate to commission a full, expert review to ensure that it was operating efficiently, delivered good value to local businesses and to support its future commercial development.

Having previously supported LBC by conducting a diagnostic appraisal of the service, we were requested by LBC to conduct a detailed review of the service encompassing all aspects of operating efficiency, commercial performance and to identify business development opportunities.

Mentoring of the LBC in-house team and a “hands on” approach to managing change were pre-requisites. It was also a core requirement of the senior leadership team that this work should deliver tangible efficiency gains within three months of commencement.

Dave Fergus, our Talent Bank Associate, provided the support. Dave has many years commercial waste experience in the private sector and Mike has over 20 years experience as a director of front line local authority services and they were therefore able to bring their combined expertise together to the benefit of LBC.

Our approach was simple - we operated as an expert, critical friend to the LBC team to challenge existing practices and to leave a legacy by transferring skills to the in-house team. In this we worked directly with the front-line staff, for example with the supervisors and crews including going out on the rounds with them to get a better understanding of the issues and opportunities.

Our earlier diagnostic work had identified a range of potential opportunities to improve revenue generation and to reduce expenditure through a range of targeted interventions.

A key initiative was to identify, and cost effectively procure for an extended hire period, equipment that would weigh the waste that was being collected from individual customers. This enabled us to identify that up to 25% of their customers were loading the bins with significant weights of waste.

Local authorities are entitled to make reasonable charges when providing trade waste collection services and have a general duty to recover the full costs they incur. By utilising the information gathered in the bin weighing exercise the Authority has been able to identify those businesses whose waste yields were higher than they should have been.

Other savings were identified as a result of operating efficiencies such as better round routing, crew reconfiguration, reviewing the charging schedule for some bin sizes and reducing the overhead burden associated with the service.

Having completed the expert review, the efficiency gains identified to the Authority were equivalent to 15% of the total revenue derived from the service with an equivalent 5:1 in year return on investment for the cost of the work conducted.

LBC has now asked us to work again with its team to deliver the efficiency gains identified and to develop the earlier work to maximise efficiency gains and put the service on a more commercial footing. We are both sharing the risk and reward through payment by results.

Trevor Holden, Chief Executive of Luton Borough Council said: "I am keen to see efficiencies maximised from all areas of the Council to the benefit of our residents against the backdrop of reducing resources. We have worked productively with Improvement East [now East of England LGA] on a number of business efficiency projects deriving substantial cashable benefits to the Council. It is good to work with an organisation, who are part of the local government family but also have the necessary private sector commercial skills to act as an effective critical friend and mentor to deliver efficiencies and improvements."

It is good to work with an organisation, who are part of the local government family but also have the necessary private sector commercial skills to act as an effective critical friend and mentor to deliver efficiencies and improvements.

Trevor Holden, Chief Executive - Luton Borough Council