Resolving The Bin Charges Debacle

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Michael Taft

From top: Paul Murphy TD leads Protests outside South Dublin City Council offices yesterday; Michael Taft

What we need is an alternative to the current system of waste management.

Michael Taft writes:

The bin charges debacle is spiralling into chaos.

We have areas where two or three or four bin companies operate and other areas where companies are threatening to leave; escalating charges becoming an intolerable burden on many low-income households; considerable price variations between counties; off-shored private companies pursuing wage suppression to increase profits; considerable illegal dumping; charges for recycling which disincentivises a social good; and on and on.

This is not a waste management policy; it is a circus.

The Minister is set to introduce a freeze on bin charges which would at least give us some breathing space.

The following sets out an alternative outline to waste management. This is not a hard proposal; others will come up with better ideas.

However, it is clear that the current situation is not sustainable – from an environmental, economic, and social perspective.

1. A Public Service

Waste collection should be a public service. In the late 19th century great strides in public health came from water, sewerage and waste collection services; all provided as a public good.

We should return to this principle. This does not necessarily mean that waste collection would be provided directly by the local authority or some other public agency (but it could – see below).

However, rather than relying on market-forces to provide the service or set the charges, local authorities should re-assert active management and control of waste collection.

2. Service Provision

Each local authority would have the choice to either:

(a) Provide waste collection directly, or

(b) Franchise out the waste collection to a single operator in a single area.

The latter would, at least, end the competition ‘within the market’ and replace it with competition ‘for the market’. Companies could bid for areas but they would have to comply with a strict protocol covering service quality and workplace relations.

However, under this system they would not set the rate or collect charges. They would merely bid on the cost of providing the service.

As a complement, or an alternative route, a national public agency could be established which would act on an agency basis for local authorities.

This agency would advise local authorities on costs, help roll out a directly provided waste service (e.g. local authorities could be facilitated to combine to achieve economies of scale and efficencies) or manage the franchising administration.

3. Financing Service Provision

It is difficult to estimate how much households nationally spend on waste collection. Prices are higher outside Dublin – in some cases considerable so. In 2006 the Ombudsman showed average yearly charges ranging from €200 to €400 a year.

The CSO’s Household Budget Survey – from 2009/10 – shows a national average of approximately €200 per year per household.

This should be treated as a proxy as it includes sewerage and skip hire but these make up only a small expense relative to waste. In any event, the distribution of costs would be approximately the same.

graph

Unsurprisingly, the distribution of costs is highly regressive – given that waste charges are not related to income.

The lowest 10 percent income cohort pays more than five times the amount as the highest 10 percent – measured as a proportion of disposable income; and nearly three times the national average.

We could bring the entire cost be brought back into general taxation with free provision of service. There are two potential problems with this.

First, is the opportunity cost: with so many areas crying out for resources (housing, health, education, investment, social protection, a range of public services), the new expense of free waste collection would crowd out spending in other areas.

Second, is the lack of recycling incentives (though this is more contestable).
Nearly everyone is required to pay for a service – those in work and those reliant on social protection. So the issue isn’t so much charge vs. free; rather it is regressive charge vs. progressive charge.

Therefore, a fractional levy on all income, including capital income (e.g. 0.3 percent) deducted at source should be sufficient to fund a public waste collection service. Some may argue that those on social protection shouldn’t have to pay the levy – but they pay for highly regressive charges already.

A fractional levy would yield them considerable savings. All households with a combined income of approximately €80,000 would be better off – that is, most households.

What about recycling?

It is often asserted that pay-by-weight incentivises recycling. This is never quantified but currently Ireland is an EU leader in recycling.

We have the third highest recycling rate, behind Slovenia and Germany; and are well above the EU average. And that’s with only 20 percent of households paying on a pay-by-weight basis.

If pay-be-weight is brought in, it could be done on the basis of charging for ‘excessive’ waste. In other words, each household would get a ‘waste-free allowance’.

But incentivising recycling is more than just about ‘sticks’; there should be carrots as well. For instance, in the Dublin North Inner City the bring centre closes at four and is not open at the weekend – hardly helpful for households in full-time work.

When visiting other European cities, one sees small recycling banks in a number of places; in Dublin there are relatively few.

And if one is concerned with the ‘polluter pays’ principle, the household is merely the final user in a chain of waste. In Germany, supermarkets are required to have recycling banks on site, so that households can get rid of much of the packaging before leaving.

The point in all this is that levies and pay-by-weight charges would be set by public authorities which would go to pay for the price of either directly provided or franchised services.

Appropriate waivers or additional allowances could be granted to households with special needs. These wouldn’t be set by private companies but democratically accountable officials in a public market.

4. Beyond Just Picking Up Waste

There are three further potential benefits from this system.

First, the entire sector would be subject to a Sectoral Employment Order (SEO) which would regulate pay and working conditions.

Since the privatisation of the waste services, wages have been driven down by employers. A SEO would ensure that competition for the market is not based on squeezing labour but is based on service quality.

Second, if a national public agency was set up, they could take charge of managing landfills and waste chains. The agency could maximise renewable energy sources from landfill gas and waste-to-energy projects – so that we get an environmental (and commercial) return.

If the agency established an R&D unit, this could research renewable projects, best-practice in waste management, recycling initiatives, etc.

Third, all private companies that bid for franchise contracts would be required to publish their annual financial statements – just like so many other businesses are required to. This would provide commercial accountability.

This outlines one model. There are other models. If the Minister announces a charge-freeze, we have a year to work out a new model.

And there is a strong argument that any model that emerges from such discussions should be grounded in waste collection as a public service.

Michael Taft is Research Officer with Unite the Union. His column appears here every Tuesday. He is author of the political economy blog, Unite’s Notes on the Front. Follow Michael on Twitter: @notesonthefront

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35 thoughts on “Resolving The Bin Charges Debacle

  1. Rugbyfan

    any chance Paul Murphy could lead an anti TV licence fee. Whatever about paying for bins and water paying for salaries out donnybrook way is hard to swallow.

    1. Harry Molloy

      Maybe he could lead an anti-PRSI too, I don’t like the way mine is being spent.

        1. Rugbyfan

          I agree with his stance on bin charges. However I liken him to an ambulance chasing lawyer. Only going after causes that will have a high return in this case votes!

        2. Rob_G

          No – the ‘right wingers’ just occasionally tire of paying for the ‘everything for free’ brigade.

          1. Walter-Ego

            Nobody is suggesting that we get our bins emptied for free. We are suggesting that we don’t give it to cartels that only have profit on their minds.

  2. Stephen F

    ‘As a complement, or an alternative route, a national public agency could be established which would act on an agency basis for local authorities’

    How did this go with the water?

  3. Fact Checker

    This is quite a sensible piece from Michael (except the bit about the SEO).

    It is perfectly normal in most places for the municipality to put the contract for waste collection out to tender as he proposes..

    The problem with Michael’s proposal in 2) is that in Ireland a 2009 court judgement makes this very difficult. Colm Keena’s piece in this morning’s IT makes this clear: http://www.irishtimes.com/news/politics/whatever-happened-to-competition-of-bin-collectors-1.2692645

    1. Michael Taft

      Thanks for this Fact Checker. The High Court ruling – as I read it (but I’m not a lawyer) – was based on statute; competition law. It wasn’t based on a constitutional claim such as property rights. Therefore, it seems that a statutory change or new legislation would remove the ruling’s objections. I also note that many of the ‘market’ claims by the judge have been proven incorrect.

      1. Fact Checker

        Thanks Michael, I am not a lawyer either. I have not read the court judgement myself yet, just the IT piece.

        Your reading is interesting. It would of course by simple to amend the Competition Act to provide for a carve-out for waste collection if the issue is not constitutional.

        My limited knowledge is that we have got to the current situation through multiple small policy steps (often with unintended consequences) rather than by any kind of design.

        1. Michael Taft

          Fact Checker – isn’t that the case in oh so many policy areas: no long-term strategy, reactive short-term steps, perverse consequences, complete mess, more short-term steps, and on an on.

  4. DubLoony

    Am so peed off with this.
    Dublin City Council had a well established efficient sytem of waster callection, with wheelie bins that encouraged re-cycling. It cost me €90 a year.
    For unwaged – penisoners, carers, long term unemployed there was a waiver system in place.
    So if everyone had paid their fair share, those that were disadvantaged could be catered for.

    But no, not good enough for Joan Collins TD.
    She led the campaign in Dublin South Central to get rid of charges. As a result, city employees have been replaced by guys on lower terms & conditions, an efficient service replaced by multiple companies. Dumping is widespread. A mess all round.

    I dodlocal clean ups in the area. Lot of dumpled rubbish is mixed – paper, cans, bottles that could be re-cycled. If your’re going to dump, how about taking it to a bring centre?
    We had a good system, protesters too thick to recognise it.
    Polluter pays – produce waste, get charged for it. Produce less waste, charges are reduced. Its not that hard to grasp.

    Grrrrrr – need me tea.

      1. jake38

        So true. The current debacle is the direct result of local authorities abandoning waste collection as a direct result of the Trots no bin charges campaign of several years ago

        1. Kieran NYC

          Same thing will happen within ten years when the water system in Dublin collapses during a bad winter.

          But hey, at least Paul Murphy got a healthy salary out of it.

  5. Owen C

    “We have the third highest recycling rate, behind Slovenia and Germany; and are well above the EU average. And that’s with only 20 percent of households paying on a pay-by-weight basis.”

    I dont pay by weight. But i do pay by use. So the main reason i recycle is so i only have to put the black bin out once every 3-4 weeks. The facts are simple – people recycle because they know its good for the environment and they know it saves them money. Anyone arguing against this basic principle is willfully ignoring how incentives structures work. There’s going to be lots of spurious comparisions between waste collection and water charges. It is a bizarrely inappropriate comparison and one which only serves the “let the rich pay for everything” agenda which will end up with less resources available for genuinely worthy projects and expenditure. Asking people to pay a fairly modest cost of waste collection, but ensuring some sort of local authority oversight on the actual level of charges, is the only sensible option.

  6. dylad

    If you have a car you can drive to a waste management plant and leave it there for a lot cheaper.

    1. Gers

      No really, currently paying about 23e a month for lifting of Black / Brown / Green bin and if I forfeit this I can use the recycling center for green and black only with entrance fee of 3e but 6e per black sack. For a month its about 5-6 Black sacks so 33-39e total – and I still have the brown bin to empty somewhere…

  7. Jimmee

    “Unsurprisingly, the distribution of costs is highly regressive – given that waste charges are not related to income.”

    Being poor sucks, we get it. You could argue that most things are regressive.

  8. some old queen

    Totally agree with Michael here. What happened was not just the privatisation of refuse collection but also the deregulation of it. It became a free for all. The work should be tendered out on a LA area basis and either managed by the LA’s or a central body. It’s not rocket science.

    A couple of months ago it was the glib ‘I agree with water charges’ and now they are parroting the ‘I agree with pay by weight’ except half of the charges would be to cover the administration costs. If they haven’t learned that lesson after Irish Water then they are doomed to repeat the mistake. People would agree to a flat fair charge like most other countries. Why complicate it any further?

  9. whut

    hiked prices will result in LOTS more fly-tipping. im supposedly middle class with what would be considered a great salary, although with all of it goin on rent, bills, 51% tax etc., im living like a newly graduated employee. water charges would send me packin to live back home, cant afford it. not even on my salary. if bins go the same way, ill be looking for creative ways to dispose of my rubbish. coz i cant afford ANY more hikes.

    1. Vote Rep #1

      Well in that case you are a massive pecker head and I hope bad things happen to you. You are dirt.

      1. MoyestWithExcitement

        See this is why you right wingers are living in a fantasy. You think you can legislate what people *should* do. If you hike prices too much, people *will* look for another way. That’s reality.

        1. D'El Boy

          Meanwhile people like you will shuffle and roll around in the dirt because you don’t have the class, breeding, civility or education to progress. That’s reality

    2. D'El Boy

      The snail does not always lose the race – but that’s the way to bet. People like you are disgusting.

  10. Liam

    works for me – better than have the trucks from different companies rolling down the street 3 mornings every week.

    1. some old queen

      Ah now, surely even you can loose 3-4-5-6 hours sleep because the free market rules?

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