Bristol City Council could abandon its waste and home-building companies and bring the services back in-house, a report reveals. Papers to next week’s cabinet expose “very serious concerns” with the future of Bristol Waste, which is already having to make cuts to services, including closing the city’s tips two days a week, to balance its books from April amid longer-term doubts that it can even continue operating.
The documents show council bosses have agreed with expert advice to reassess whether or not to continue with the “commercial model” of having arms-length companies at all. It is understood concerns over political interference in Bristol Waste’s decisions, which are supposed to be independent of the council and mayor, have also played a part in the decision to hold a review.
The Local Democracy Reporting Service has learned that the firm recently suggested reducing black bin collections to once every three weeks, which would have saved about £1million a year, but this was vetoed by Marvin Rees's Labour administration because it would have been hugely unpopular and come at a political price. Like many local authorities, Bristol City Council has been the owner – or sole shareholder – of several companies since 2015, each under a parent company called Bristol Holding which also belongs to the organisation.
The idea is that by competing in the open market, they are free from the shackles of local government rules and can earn more money by “commercialising” and expanding services and then investing profits back into the city. But the downside is that they are far riskier and can end disastrously – as happened with the failed Bristol Energy venture that cost taxpayers up to £43.8million – because there are fewer protections than for services provided directly by the council.
However, abandoning them altogether would be a huge step and a major U-turn. While the authority’s housing business Goram Homes is in a relatively strong position despite a recent “very pessimistic” business plan and delays to projects, its waste firm is in considerable trouble and has less flexibility to trade commercially because of complex company status rules.
A report going to cabinet on Tuesday, March 7, said Fiona Ross, the independent shareholder advisor, had recommended the rethink to the shareholder group – the body set up by the mayor to advise the council on high-level strategic matters concerning the firms it owns. The group, which includes deputy mayor for finance Cllr Craig Cheney, top City Hall officers and Bristol Holding bosses, agreed that a “strategic review of the commercial model should be planned to ensure stability into the future”.
Ms Ross’s advice said: “After this challenging business planning round where significant adjustments had to be made to plans to allow for the current economic circumstances, it is clear that managing its relationships with its commercial businesses is a significant drain on scarce Bristol City Council resources, in terms of time and funding. It is my view that the time has come for Bristol City Council to conduct a review into the longer-term future of the commercial companies.
“It may be that there is a better way of delivering the council's objectives or it may be that the company model is still a preferred option. If the latter is the case, an acceptance of the inherent challenges and costs of running companies must be more widely accepted.”
Bristol Waste produced a five-year business plan in December but the council rejected this and demanded changes, which resulted in delays and a plan covering only the next 12 months. The company’s interim managing director Jason Eldridge stepped down on January 12, which councillors were not told about and only discovered via a public notice on Companies House weeks later.
The reason given by Bristol Waste for the resignation was ill-health. A report to next week’s cabinet summarising the shareholder group’s discussions of the company’s business plan on February 6 said: “Although the 2023/24 budget balances, there are very serious concerns regarding the viability of the business in future years.
“As a result, the shareholder group requested at the meeting that the company submit a one-year business plan for approval, allowing time for further work to take place between Bristol Waste Company and Bristol City Council to align service and company budgets and collectively address the gaps which emerge from 2024/25 onwards. A number of substantive risks and some uncertainty still remain within the 2023/24 plan, which remain extremely challenging given the essential transformational changes the company needs to make.
“Group members stressed the imperative for Bristol Waste Company to work closely with the strategic client [the council] to find solutions and mitigations to counteract the cost of living, inflationary pressures and other issues which are putting pressure on operating budgets. This may include reviewing the service levels delivered to the council.
“It was highlighted that this process needs to take place in parallel with Bristol City Council’s own budget setting process, of considering how further savings and income growth will be achieved to ensure the sustainability of both the services and company. The shareholder group also agreed with independent shareholder advisor recommendation that a strategic review of the commercial model should be planned to ensure stability into the future.”
Bristol Waste’s plan includes opening the city’s three recycling centres only five days a week instead of seven, cutting street-cleansing rounds by half, reducing the work of fly-tip and graffiti removal teams, increasing the cost of garden waste subscriptions and introducing new fees for DIY waste and replacement bins and recycling containers. It says the council has told the firm it must “live within its means”.
Overview & scrutiny management board members will discuss the plan on Friday, March 3, ahead of cabinet approval on Tuesday, March 7.
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