Lambeth council is set to sign the controversial outsourcing firm Serco to be its new waste contractor.
The firm is heavily involved in the failing private-sector-run government Covid test and trace scheme.
In October last year Labour shadow minister Rachel Reeves said it was “grim beyond belief” that Serco would exceed profit expectations through its involvement in the scheme.
The company had forecast it would make over £160m in 2020 – much more than expected. Reeves called on the government to “sack Serco”.
In 2018 Serco won the “Scrooge Employer” award from the trade union Unite over penny-pinching on the pay of outsourced London NHS staff.
In 2019 it paid £23m as part of a settlement with the Serious Fraud Office over electronic tagging contracts.
However, Lambeth council expressed confidence that its new deal with Serco would involve “continued close relationships with our trade union colleagues” and said it had secured commitments on workers’ pay and conditions.
Lambeth council cabinet members are being recommended to appoint Serco after “a highly competitive and robust procurement process,” a statement said.
The contract would begin on 1 October this year.
The council said the contract would offer “real service improvements, job security for hard-working staff, innovations in use of technology and significant steps forward in climate action”.
New features would include an expanded recycling and reuse service – with the collection of electrical waste, batteries and textiles – as well as food waste collections at another 3,000 homes
The council said the new deal would save £2m a year – which would be “freed up for the council to spend on vital services such as adult social care and children and young people’s services”.
The new contract would see the an immediate halt to the spraying of glyphosate on Lambeth streets.
The council said there would be a “unified service both on streets and on our housing estates with increased staffing resources focused on delivering a better service for all of our residents”.
It said the new contract would offer “dozens of new job opportunities for Lambeth residents, with a commitment to focus on residents identified as being furthest away from the job market – for example our young people and care leavers”.
There would be “security for our staff and good rates of pay, at London Living Wage or above, as well as a strong training offer and a commitment to a reduction in the use of agency staff,” the council said.
A community partnership board would offer “challenge, feedback and ideas” for service improvements. It would be made up of representatives of Lambeth residents and voluntary and community sector organisations, and other local stakeholders.
Serco currently manages waste services for the London boroughs of Hammersmith & Fulham and Richmond-Upon-Thames.
Cllr Claire Holland, deputy leader of the council and cabinet member for sustainable transport, environment and clean air, said: “Our waste services are a vital part of our universal service offer, carrying out 350,000 collections a week and are one of the services most valued by Lambeth residents.
“Our hard-working waste collection and cleansing staff have been heroic throughout the pandemic, going out to work on the streets every day, keeping the service going and ensuring our residents continue to be provided with a good service.
“I am really pleased that as part of these new arrangements and through our continued close relationships with our trade union colleagues, we have secured commitments to workers’ pay and conditions, including commitments towards building a more local workforce and one that will be encouraged to develop and progress in their careers.
“While performance, value for money and recycling rates under the existing contract have increased in recent years, despite a decade of government cuts to council budgets, we are even more ambitious for what the service can deliver in the future.
“The winning bidder responded positively and in depth to some of our residents’ key aspirations in delivering on a circular economy in Lambeth.
“Through the new contract, we will be joining waste services on estates together with the main service to provide a high quality and consistent service across the borough.
“This is something that tenants and leaseholders have asked for – and the council has listened.
“The new contract will improve services and provide more jobs and more resources to increase recycling, while saving millions of pounds for council taxpayers.
“The new contract also prioritises cleaning of our town centres more regularly and with greater resource as well as moving to a fully decarbonised fleet by 2030.”
Holland thanked the outgoing provider for its hard work and commitment to helping make Lambeth a better, cleaner borough over the years.
She said the council is bringing part of the service back in-house, meeting its Labour party members’ manifesto commitment to look to bring services under council control where possible.
This includes placing the fleet of vehicles under council control so that it can deliver on net zero carbon and air quality commitments by electrifying the fleet as soon as possible.
Elements of the community outreach programme will also return in-house.
The report for the council cabinet was published today (1 February).