Serco, the controversial outsourcing company that Lambeth council has chosen to be its new rubbish collection contractor, is having to be bailed out by another local authority.
It is also facing strikes by waste collection workers in the South East London borough of Bexley where the council has decided not to renew its contract.
The company, heavily involved in the failed national track and trace scheme, will collect rubbish and provide other waste services in Lambeth for at least six years from 1 October this year.
Last week the Conservative-controlled Derbyshire Dales district council voted to give Serco up to 50% of the cost of increasing the pay rates of bin lorry drivers.
Shortages of drivers in the area have led to rubbish and recycling collections being missed for more than a month.
Serco blamed staff absences and a nationwide shortage of drivers.
Derbyshire Dales council has already given Serco £250,000 to help keep collections going during lockdown and a further £100,000-plus to hire temporary collection vehicles after delays in manufacturing a new fleet – to be paid for by the council.
And, despite the latest payment, food waste and recycling collections will still be reduced or cut.
The Matlock Mercury local paper said council taxpayers had paid £1m extra on the £3.1m contract with Serco which began a year ago.
The council is also proposing to give its officers discretion to scrap financial penalties if Serco breaches agreed key performance indicators.
Opposition Liberal Democrat councillors said two Serco bosses at the council meeting gave no satisfactory response when Cllr Paul Cruise asked: “Why should residents see a reduction in the service provided by Serco under their contract due to a short-term profitability issue?”
If more cash was the answer, why had not Serco tried that already using its own money, the councillors asked.
Lambeth council believes its deal with Serco will save £2m.
It is expanding a team to manage the contract and is confident that the team, a new governance structure, and financially linked key performance indicators will “allow it to be robustly managed”.
The council says new features in the contract will include an expanded recycling and reuse service – with the collection of electrical waste, batteries and textiles – and food waste collections at another 3,000 homes
It says the new contract will 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”.
“Continued close relationships with our trade union colleagues” and commitments on workers’ pay and conditions are also promised by the council.
A “community partnership board” will offer “challenge, feedback and ideas” for service improvements.
Council leader Claire Holland said the new contract would improve services and provide more jobs and more resources to increase recycling.
The council is bringing part of the service back in-house, including placing the fleet of vehicles under council control so that it can be electrified as soon as possible.
Serco refuse and cleansing workers in the South East London borough Bexley took part in two weeks of strike action in July over a “pathetic” 1.5% pay offer and Serco’s refusal to hand over years of back pay owed to nearly 50 staff.
They plan further action from next Monday (9 August) until 22 August.
Bexley council is to appoint a new contractor when its contract with Serco expires.
