Public bodies play a unique role in renewing our urban infrastructure to make our cities more sustainable. The transformation of the Greater Manchester waste system illustrates how local government can accomplish this through ambitious procurement projects, argue Dr Sally Gee and Dr Elvira Uyarra.
In 1999, local government faced a major problem. European legislation was approved that would impose large financial penalties if targets for reducing waste landfill were not met. These could have led to penalties across the UK of £500,000 a day. Local authorities would pick up the bill.
Greater Manchester’s taxpayers would have been liable for a hefty portion of this non-compliance cost. The Greater Manchester Waste Disposal Authority (GMWDA) is the largest waste disposal authority in England. It manages waste from nearly a million homes on behalf of nine local authorities – Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside and Trafford. It handles around 5% of the UK’s total volume of local authority collected waste, mostly from household bins.
When European legislation was introduced, over 90% of Greater Manchester’s local authority collected waste was sent to landfill and only 3% was recycled: a low figure even by national standards.
The threat of large financial penalties was seen by new leadership in the GMWDA as an opportunity. An ambitious, environmentally sustainable, strategic vision for a new urban waste system was created and by 2012 a complex, multi-technology system was operational across Greater Manchester.
This new system would minimise disposal and maximise recycling, composting and materials recovery (with residual waste being used for clean energy generation): a radical change from the simple landfill route of filling ‘holes in the ground’ with unsorted waste. Recycling rates of 44% were achieved by 2013/2014, with over 56% of waste diverted from landfill. The environmental benefits of the new waste management infrastructure increase over time, with a recycling target of 50% and landfill diversion target of 75% to be achieved by 2015/16. Penalties have been avoided.
The journey to this more sustainable waste management system was challenging. Procurement took a long time: central government approved the necessary Private Finance Initiative (PFI) credits in 2005, GMWDA ran a competition and selected a preferred bidder in 2007 and the close of contract was delayed until 2009 due to the international banking crisis. Stamina and tenacity were required to maintain the strategic vision over this timeframe and to bring together the inter-dependent elements of the new system.
Several lessons can be learnt from Greater Manchester’s experience. Most importantly, local authorities do make a vital contribution to creating more sustainable cities and it is possible to break from industry and national norms. Achieving innovation and sustainable outcomes requires a flexible and entrepreneurial approach to innovation, not a rigid and bureaucratic process.
The collection, transportation, processing and overall management of waste involves technologies, people, organisations, markets and regulations, linked together by practices and underpinned by cultural and institutional norms. It involves a waste management system of many interconnecting parts. Imposing a new system was not an option, yet it proved possible to break existing interdependencies and actively coordinate new ones.
A complete overhaul of the GMWDA, as procuring authority, was needed to ensure it was fit for purpose. It had been structured to manage the existing landfill system, so organisational renewal was necessary to break from well-established and rewarded practices. This provided an opportunity to build capacity and relationships with key external stakeholders, critical for the inevitable political – small and big ‘p’ – manoeuvring.
The Greater Manchester Municipal Waste Management Strategy was central to the tender specification and was the result of a two year consultation with a broad range of stakeholders, including the local authorities, waste collection contractors, council officers, planners, residents and environmental NGOs, as well as technological, industrial and environmental consultants.
Developing a strategy that would maximise environmental benefits and create a workable solution took time. Overcoming deeply held resistance to new options took persistence and GMWDA arranged for stakeholders to see alternative technologies at work in other countries.
Achieving agreement between what had been polarised positions was imperative and dictated what system could be implemented, as did the creation of markets for the outputs. The consultation revealed that households were willing to separate waste for recycling, but only into a few ‘streams’. A local market did not exist that could enable recycling of combinations of materials, such as paper and cardboard, so the GMWDA had to negotiate with processors to agree incentives to invest in a commercial infrastructure.
The actions of GMWDA went beyond a formal, traditional procurement process. The market was not expected to ‘come up with the goods’. Companies tend to prefer business as usual and waste management companies were used to offering centralised incineration solutions, not the multi-technology, distributed solutions that GMWDA required.
The GMWDA were entrepreneurial in their approach and broke from industry and national norms to implement a unique and environmentally sustainable waste solution. However, the project has been criticised as expensive, although it is cheaper than paying fines for waste going to landfill. The cost of the solution is £3.5bn over 25 years, partly because the only funding option available was PFI.
Manchester’s Professor Jean Shaoul and others have provided compelling evidence that private finance is more expensive than government borrowing and long term contracts to deliver public services are inefficient, creating a tax burden for generations.
Greater Manchester’s experience demonstrates the critical role that local government plays in making our cities more sustainable. It also shows that local authorities can respond flexibly and quickly, when allowed to do so. But they are constrained, not least when required to use private finance and specified procurement instruments.
It is perhaps time to reflect on what they could achieve if given more freedom.