The UK waste management industry is worth approximately £5 billion a
year
8
. This includes collection and disposal of waste from households, streets,
businesses, factories, builders and demolition companies, as well as all of the
recycling (including scrap metal) carried out in the UK. The industry is
dominated by a number of multi-national corporations, the largest of which
have as much as a 10% share of the market. The requirement for huge
increases in household waste recycling will see the market grow by up to
another £500 million to £1 billion per year
9
. Other legislation requiring business
to recycle their waste will see it grow still further almost twice the quantity
of household waste is still landfilled by the commercial and industrial sector
10
.
An indicator of the scale of growth we can anticipate in the UK can be taken
from experience in Germany, which recycles over 50% of its household
waste. The German recycling industry has recently overtaken both its steel
and automotive industries in terms of its contribution to the economy
11
.
Competition and partnership
The big players in the UK waste industry are keen to take advantage of
these new growth areas. Most have experience of recycling and composting
on a large scale from their operations in other countries. However, in most
countries with high recycling rates, governments have tended to intervene
much more than has historically happened in the UK. For example, in
Germany, the price of every item of packaging has to include a charge for
the cost of recovering it for recycling.
Policy and legislative drivers have been introduced to encourage recycling in
the UK in recent years, and are beginning to have an impact on the market.
Several waste management companies invested heavily in recycling
infrastructure in the early 1990s, while the market was still undeveloped.
Erratic prices in the waste materials markets made operating in the sector
extremely difficult. So, although there is interest from the multi-nationals,
they are being more cautious than in other countries.
Another key player in household waste recycling is local government.
Councils are not only the main customers in the market; they also often
provide services themselves, through their direct services organisations
(DSOs). Before Compulsory Competitive Tendering (CCT) required councils
to outsource services to the cheapest bidder, DSOs carried out all household
waste collections in the UK. Many were able to offer a cheaper service than
the private sector competition and remained in existence; 60% of waste
contracts are still to this day delivered by DSOs
12
.
9
7
Seven out of the nine Best Value Beacon local
authority waste services involve partnerships
with social enterprises
8
Institute of Waste Management
9
Environmental Services Association
10 Waste Strategy 2000 for England and Wales
11 Robin Murray/DEMOS,
Creating wealth from waste, 1999
12 Environmental Services Association
The market
1