Councils need to radically change their attitudes to rubbish. It’s not just stuff to be collected, it’s an opportunity to make new things, boost the local recycling economy and earn some extra income
My teenage daughter now has a Saturday job at a major coffee chain. She won’t let me reveal it but it’s the one that is named after a character from Moby Dick and that doesn’t pay as much tax as perhaps one would expect.
I go in occasionally and every time I am astonished by how they freely give away cinnamon. The reason for my incredulity is because up until the last 200 years, this used to be an enormously valuable commodity and now we live in an age where big US corporations give it away for free.
To put this largesse into perspective, in Roman times, a pound of cinnamon used to cost about a year’s wages for a labourer which, if the work recently done on my house is anything to go by, was about £100k plus a lot of sugary tea.
I was thinking of this sea change in attitudes to spices when I read that the UK still recycles only 39% of its municipal waste and either buries or sets fire to the rest. A good proportion of the stuff we don’t recycle still has intrinsic value. This week, for example, the price of scrap paper was £62 per tonne, plastic bottles are going at £350 and aluminium cans are edging towards £850.
So we have the perverse situation of cash-strapped councils laying off frontline workers while destroying things they know have value. If the public sector were running a chain of shops selling overpriced hot milk, they wouldn’t give away valuable cinnamon, they would pay somebody to take it away and bury it.
So why does this happen? I think the language councils use to talk about waste betrays their view of the issue. They describe it as a public health issue, with ‘stuff’ needing to be collected and disposed of. I think this paradigm persists because, at a fundamental level, councils are not in the business of dealing with materials. It isn’t in anybody’s job description to see the potential in stuff, to see how material A can be transformed into product B and sold in shop C. This was fine when waste was another public health problem to be solved but it isn’t anymore. It’s a valuable source of raw materials that councils mainly truck away and bury in big holes.
I recently had a good insight into the alternative when I visited a waste wood collector. Councils pay them to take away waste wood in the form of old IKEA wardrobes, etc and they turn it into bedding for gerbils and hamsters. Apparently, because of the recession, sales of products for little pets are going through the roof.
There is a sort of logic here. This is you going home and saying to your kids, we cannot go on holiday this year, but never mind, you can have a rabbit. And call him Peter.
However, the real point here is that the clever people who ran the plant lived and breathed the process of transforming stuff. They didn’t see it as a waste product, they just saw it as a product. No adjective required. They thought constantly about how they could turn the wood they received from the councils back into something useful.
But the problem these people have is that they have to rely on the insular councils to get access to their raw materials – and how they are collected impacts hugely on their ability to recycle. It is much harder to recycle wood from commingled black bag waste than if it is source-separated. The indifferent council sitting between them and the waste stream hinders the development of new markets for other products.
So my big idea is to break up the public sector monopolies on the collection of waste. Carve out the cost of waste collection and disposal from the council tax and give the money back to householders.
Back this up by introducing more pay-by-weight schemes, which are commonplace in Europe.
But, most importantly, do what all the other utilities do and give the consumer a choice about who collects their rubbish, in what form and at what cost. Overnight this will transform a moribund collection industry stuck in the mind set of waste as a problem into a cottage industry of small recyclers.
Now the most common objection to consumer choice about waste collection is that it encourages fly tipping. But you could construct the same argument to say that charging people for rail tickets encourages fare dodging.
I don’t think as a society we should shy away from good ideas just because they encourage criminality at the very margins.
So, in conclusion, the way councils in this country think about waste hinders recycling.
The public sector is not in the business of transforming materials into products and still regards waste as a question of transportation rather than transformation. This paradigm crowds out and stifles the recycling market.
At its cultural heart, the public sector does not think about waste as potentially valuable stuff that can be turned into products, it thinks about it as a problem. This outdated thinking is the problem in itself.
Michael Ware is corporate finance partner at BDO
