The report, compiled by Matthew Sanahm, acting director of finance and operations at the Kent-based authority, explained that the service had an estimated gross turnover of around £300,000 “with an expected pre-fuel/cost of living crisis expenditure of £260,000, leaving the council with a potential profit margin of 15%”.
However, this does not include the provision of non-payment, which currently stands at around 22%, which has meant the service has not broken even in each of the last four financial years.
The Labour-controlled council put non-payment down to “a number of challenges for us as a council and local businesses such as Covid and Brexit which have led to the council being owed in the region of £133k in overdue fees”.
Scrap
The option to scrap the system was recommended because the council’s commercial waste service is now set to post a deficit of £207,000 in 2022/23.
This figure includes between £100,000- £120,000 of write offs from prior years.
The table below demonstrates the net trading position for each year if allocating the bad debt to each relevant trading year, but as indicated above, this will likely be allocated in 2022/23.
Subsidy
The report explained that the service is being subsidised by waste and recycling resources and the national HGV driver shortage has had a significant impact on this. The council said it “could have been utilising the commercial driver to deliver our statutory services”.
The report said the council would need to double its fees in order to cover the cost of the service, which is “clearly not in keeping with the original ethos of a low cost flexible service”.
It has therefore proposed to scrap the service at the end of May, with the 300 businesses signed up given two months notice, with charges kept at 2022/23 rates until the service finishes.
The council did note that by removing the service there is a risk that illegally disposed commercial waste could end up in local public litter bins, fly tipped or at household waste and recycling centres. “There will need to be a focus on this from our streetscene enforcement,” the report said.
The decision “will have no negative financial impact on the council’s operational services but will reduce the financial pressure on the waste and recycling service,” the report concluded.
Thanet’s cabinet will vote on the proposals on Thursday (2 March).
‘Success’
Despite the losses, the council praised the “successful” system in 2019 after 170 businesses signed up to the scheme.
At the time, Cllr Ash Ashbee, then deputy leader and cabinet member for operational services said: “The commercial waste service should be used as an example of how the council can develop future projects. The feedback received from our customers regarding the service and the staff is testament to what can be achieved.”
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