Bristol Waste bosses have denied the city council’s company is in significant financial trouble despite “very serious concerns” over its future. As reported, the local authority has told the business to “live within its means” and is increasing the funding for its main waste contract by just five per cent when inflation is 10 per cent in the industry.
Cost-cutting measures proposed by the firm – approved by cabinet on Tuesday, March 7 – include slashing the street-cleansing budget by 30 per cent, closing the city’s tips two days a week, a big hike in garden waste subscription fees and new charges for recycling including DIY waste, Christmas trees and replacement kerbside bins and boxes. Council chiefs have even accepted expert advice that the whole system of the authority having arms-length companies to run some of its services should be reviewed, according to cabinet papers.
The documents say: “There are very serious concerns regarding the viability of the business in future years.” Bristol Waste originally produced a five-year business plan in December but the authority demanded changes, resulting in a plan lasting only one year from April, which was scrutinised by the cross-party overview and scrutiny management board (OSMB) on Friday, March 3.
Read more: Council could scrap its companies amid "very serious concerns" about Bristol Waste's future
Company finance director Chris Holme told the OSMB meeting: “I want to dispel the issues you might have seen in the press that this company is in significant financial problems. We are estimated to have cash reserves at the end of this financial year of £5.5million with an operating profit next year of £433,000.
“Even taking into account the capital investment we intend to put into Avonmouth, we are still anticipating a closing year balance of £5.7million for next year, so this is a resilient company. But like any other company it faces challenges moving forward.
“I don’t want people to be given the wrong impression that this is a company that has significant financial problems. Our contract uplift is five per cent for the year, we have inflationary pressures of 10 per cent, so it will be very difficult to square that circle.
“That doesn't mean the overall company is in trouble next year but if we continue to be a strong, resilient company, decisions will need to be taken early to maintain the financial position of the company from 2024/25 onwards. Our core contract is forecast to not make a profit next year but a small loss which is the same principle that the inflation uplift is significantly less than the cost of employing our staff, and the uplift does not cover the uplift required to maintain our people on the minimum wage but we will continue with that commitment.”
Mr Holme said the firm was expecting 29 to 30 per cent growth in its commercial waste turnover, which is where “significant margins in this business can be made”. He denied claims by Cllr Richard Eddy (Conservative, Bishopsworth) that cabinet endorsing the 2023/24 business plan was “very hasty and arguably irregular” when the business’s 2021/22 accounts were late and had only just been filed with Companies House in the last few days, which Mr Holme said conflated two separate issues.
The finance director said the accounts showed an operating profit last year of £450,000. “The company position is relatively strong so I have no concerns over that at all,” he said.
“But we need to manage a business in the context of the financial parameters we are operating and if we don’t agree this business plan, it causes us a significant problem because we do have to make significant efficiencies.” Bristol Waste chair Elaine Holt said: “We are very open and transparent with our financial performance.
“We share data with the shareholder group and Bristol Holding, so we are absolutely transparent in how we are performing. There is nothing to hide here.”
Cllr Martin Fodor (Green, Redland) said: “My worry is that a one-year business plan is not long enough to plan ahead. Investment plans have to be made, services have to be prepared for and the public have to be ready for the changes.”
Ms Holt said: “We have already had lots of discussions about future years beyond the next financial year. We have options and ideas and we have agreed we will start pinning those down in May and then start to go through the council’s process.
“We know that if there are going to be any changes, they need a long lead time with citizens to ensure they are implemented effectively. We would like a five-year plan, of course – that is what we are working towards over the next few months.”
She said the three household recycling centres would be open weekends and bank holidays despite reducing their opening days from seven to five a week.
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