Derbyshire Dales council to give contractor Serco more cash to resolve bin collection crisis

After two and a half hours of debate on Tuesday, July 27, councillors agreed to prop up the private firm to the tune of hundreds of thousands of pounds, for the third time in a year.

Serco is struggling to recruit and retain staff by offering salaries higher than £10.82 an hour, and asked the council – and its taxpayers – to foot the bill for a payrise.

Despite calls to send the highly profitable firm packing, councillors eventually agreed to give Serco the extra cash and follow through with plans to suspend garden waste collections for an entire month in a bid to quash the current “emergency” situation which has seen thousands of missed pickups.

Councillors voted to fund 50 per cent of Serco staff’s pay hike over the next eight months – at a cost of between £28,856 and £150,848 – but it came down to a deciding vote from the Conservative chair of the council, Ashbourne representative Sue Bull, after members cast 17 votes for and against.

Coun Bull had cast her personal vote against the deal, but said she would vote in favour as chairman “for the good of the council”.

Earlier, Coun Paul Cruise had described the situation as a “David vs Goliath” contest and that “Serco has put us over a barrel”.

Residents in the Derbyshire Dales are now in the first year in which they have paid £50 for garden waste collections and now their paid-for service has been suspended to redirect staff to the main bin collection service. A total of 18,300 Dales residents pay for garden waste collections.

Councillors agreed that subscribing residents would be given a £15 discount if they choose to resubscribe next year – leaving a £35 fee. Residents, councillors pointed out, had already made calls for a full refund.

Councillors also voted to waive financial penalties for Serco for each bin missed, along with other key targets to monitor its performance.

Coun Peter Slack said the authority should not give money to a firm which has “increased its profits enormously” during the pandemic. He said council funds “would be better spent on businesses that are struggling, instead of a multi-million-pound business”. He said: “Surely we can’t keep subsidising this company forever.”

This latest injection of cash comes after the council has already handed over £350,000 extra to Serco over the past year, despite thousands of missed collections.

The outsourcing giant has made profits of £120million after landing several major contracts during the pandemic, but has said its bin collection agreement in the Dales is “not profitable” and that it has already “absorbed costs” of £130,000.

A number of key issues are causing the current emergency situation in the Dales, which has seen the council call on the military and fire service to help it empty bins.

These include the exodus of European HGV drivers following Brexit, the halt to HGV driver training during lockdowns, the rate of pay and competition for workforce, and the requirement for staff to self-isolate if they catch Covid or are identified as a close contact.

Ronnie Coutts, managing director at Serco Environmental Services, told the meeting that the company apologises for the disruption caused to residents.

Paul Smith, chief executive of the district council, also apologised for the disruption caused.

Bin collections in the Dales have already been significantly disrupted for well over a month with residents fuming about the lack of communication they have received.

Serco says it has a requirement for a total of 29 bin collection staff to maintain the service and allow for holiday and sick cover. However, it currently has just 16 staff to carry out its duties, Mr Coutts said last night.

There is said to be a 16 per cent gap in HGV vacancies nationally, but Serco’s Dales team is now down to less than half of its required workforce.

Mr Coutts said attracting drivers to work in the Dales has been “complex” and it is aiming to make the area more “attractive” to work in by boosting salaries. He also said the firm was “upskilling” its current workforce, for no extra pay, so that they could carry out more roles.

Mr Coutts maintained that the firm had to be “realistic” and that there were “two to three months of challenges” still to come.

He said one of the major impacts to current services has been a mass influx in cardboard waste being presented by residents as a result of an online shopping boom.This, he says, has seen cardboard tonnage increase by 19 per cent in the Dales and up to 50 per cent in some collections.

Mr Coutts said Serco feels it is “reasonable” to ask for extra monies from the district council, because it is already taking on extra costs and the bin collection contract is a shared one.

He said the firm, whose £120m profit is six times the annual spending budget of the district council, has had to pay out substantial sums for overtime for staff to work weekends on time-and-a-half and double pay.

Mr Coutts told councillors that if they did not approve the extra money then the significant disruptions to services would continue for longer.He said the pay rise would help to “keep the people we have got and attract others” which would help to “get through this period of instability”.

Mr Coutts said it was having conversations with all of the 24 local authorities it provides bin collection services for, some of which included talks of rates of pay and others for reducing services.

He also said: “The issue isn’t about profitability, if it was, Serco would absorb that. This is a service performance issue. There will be reduced profitability for our contract, it is not profitable for us.”

Lee Gardner, the council’s legal advisor, said the authority would be liable to pay Serco compensation if it were to terminate the contract without following the due process of warnings over a period of time for failing specific collection targets.

Coun Jason Atkin said the authority was “stuck between a rock and a hard place, the residents need their bins emptying”.

Coun Peter O’Brien repeated his call for a full investigation into the current eight-year contract with Serco, saying the act of giving the firm more money on a regular basis was a “sticking plaster approach”.

Councillors said a company the size of Serco should have been aware of the impact of Brexit, several years after the referendum and that online shopping was to cause a boom in household cardboard recycling.

Coun O’Brien insisted the authority should not be “propping up” Serco again and that the council should say “it is your problem, you sort it out, don’t come crying to us”.

Coun Sue Hobson, deputy leader of the council, said the authority needed to learn from mistakes around lack of communication given to residents over the current situation and needed to act now to help quash issues with the service.

Cllr Colin Swindell said there have been problems with collections for “several months” and there had been issues with Serco under its previous contract.

He said it was “unreasonable” for the firm to be asking for more money, when it has “failed” to pay staff a decent wage” and “failed to retain staff due to working conditions” and “failed to prepare for Brexit”.

Cllr Swindell said some residents have lost faith in the council over the ongoing bin collection issues, particularly those who have paid for garden waste pickups, only for them to be suspended with no refund. He said the council should not provide a “taxpayer-funded bailout”.

Cllr Andrew Shirley said it was “easy to stare Serco out” and not give it extra money, but that would leave residents with bin collection disruptions well into the winter.

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