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Town Hall is hoist on the petard of its rubbish policiesWHEN is a monopoly not a monopoly? Possible answer: when it’s awarded to the street-cleaning firm Veolia.
In reality the council’s latest award of a seven-year contract to Veolia means that the firm has gained monopoly control over street cleaning and refuse collection in the borough.
Perhaps the council wouldn’t put it so boldly. To do so would fly in the face of the privatisation of council services, first conceived by Mrs Thatcher, then enshrined by New Labour.
Council services can often be better delivered – and at a lower cost to the taxpayer – by a private company, say the proponents of privatisation.
This will come about once companies are allowed to compete for a council tender.
In terms of local government economy, this may or may not be true.
Certainly, down the years, since the late 1980s, this has been a battleground of ideas constantly fought over by differing parties.
However, at the very least, it has always been accepted by privateers in all the main political parties that competitive tendering lies at the very heart of a successful privatised service.
And that is where the council has now come unstuck.
Foolishly, in the scramble to sell of council-owned property to offset Whitehall-tightened purse strings, the Labour administration of the late 1990s decided to get rid of its refuse depots in the borough.
What was not foreseen was one of those little unintended consequences.
By selling off the only refuse depots in the borough, the council made it very difficult, if not commercially impossible, for most environment companies to compete for a cleaning and refuse contract.
Result: only Veolia, who own a waste depot fairly nearby in north-west London, tendered for the council’s latest lucrative £140million contract.
In short, the council has now found itself in the very last place it would want to be in – handing a contract to a solitary bidder.
Where does that put all the political and economic arguments for the private outsourcing of council services?
Embarrassed, the council feels it has little choice than to buy another refuse depot site in time for the next piece of tendering in seven years’ time.
If this is seriously pursued it is bound to set the council back by several million pounds!
Talk about financial waste and muddled management!
Charitably, you could say few could have foreseen the coming years.
Equally, you could argue that the tendering process – the bedrock of privatisation – is not all that it is cracked out to be. |
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