OPINION: Councils seeking new waste collection contracts in the next few years face a very different market from when they last procured. In the early to mid-2010s, more than 10 operators competed for contracts. Today’s market is dominated by just five major players: Biffa, FCC, Serco, Suez and Veolia. While this concentration has simplified some aspects of navigating the market, the bidding process remains costly, resource-intensive, and uncertain for contractors, who are more selective than ever about which bids they pursue. For councils, this brings the risk of running a process with too few bidders to achieve effective competition.
Waste collection services contracts are a substantial area of expenditure and a vital public service for local authorities. Before deciding how to deliver services, councils are well advised to review service delivery models (in house, contracted out, local authority company), to decide which will best meet their needs.
For those that contract out, rushing the process risks making subpar decisions that could have long-lasting consequences. Councils cannot afford to wait until the last minute if they wish to attract bidders. To execute the procurement process properly, ideally it should start three years before the award date and needs to be efficient, transparent and well-planned. Let’s take a look at some of the things that make this possible.
The impact of new procurement legislation
Navigating the Procurement Act 2023 (PA 23), which came into effect in February this year, adds a new layer of complexity. The PA 23 demands tighter transparency and stricter reporting requirements for key performance indicators (KPIs) than the outgoing Public Contracts Regulations 2015, and councils must adapt quickly. Councils will need to be open with the market about what they’re going to be procuring, the procurement process itself and why they’ve awarded contracts.
They must also publicly report on KPIs once the contract is up and running. For bidders, poor performance against KPIs could lead to debarment, which may make them cautious if they see KPIs as badly designed or outside their control. Councils need to strike a balance between setting clear expectations and being realistic about what is achievable, or they risk deterring bidders.
External pressures and new challenges
Macroeconomically, rising inflation, especially in vehicles and fuel, combined with increased labour costs continue to push up the cost of waste management services. Councils that fail to account for these changes risk underestimating costs, leading to difficult conversations and delays when budgets need to be revised.
In addition, lead times for essential resources like vehicles have stretched from six months to as much as a year. This extended timeline needs to be factored in to avoid delays during mobilisation. If councils wish to consider alternatives to diesel, whether HVO or electrification, to meet their net zero commitments, greater complexity and longer lead times can ensue due to the need for charging infrastructure or fuel storage changes.
Key steps to streamline procurement
For councils to stay ahead, proactive engagement with the market is vital. Early market testing can help councils gauge interest and identify potential barriers before launching the full procurement process.
Depot availability is also crucial. Many waste contracts rely on council-owned depots for vehicle storage and operational management. A council that lacks its own depot facilities that contractors can use may find it harder to attract bidders, as securing a site, obtaining planning permissions and undertaking construction can be time-consuming and risky. Councils should consider investing time and resources up front to address this problem to save later.
A collaborative procurement approach can also help with cost control. Engaging with bidders through transparent, ongoing dialogue allows councils to refine commercial proposals, resolve technical issues early, and bring costs down by identifying areas of concern to the bidders which have attracted “risk pricing” before finalising contracts.
Finally, councils must acknowledge that there are busy years ahead, with the cyclical nature of waste contracts meaning that many councils will be re-procuring. 2027 looks like a particularly crowded year, so contractors will already be deeply involved in bids when the 2028 tenders open. Councils must ensure their process stands out and is attractive to secure strong competition.
No time to waste
While 2028 might seem distant, councils and contractors need to be more vigilant than ever if they want to get the best deal possible – particularly given the consolidation of the market. We’re living in a tumultuous economic landscape, and there’s no telling what other obstacles could be coming down the track. If in doubt, consult external parties who may be able to lend support. Those who start early and have a watertight plan in place will have a significant edge.
Interested in hearing more from Eunomia? The consultancy will be speaking at letsrecycle.com’s London Conference on 5 June 2025 in London. Register your interest and find out more here.
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