Outsourcer Serco Plc recently won the prestige as preferred bidder for chunky waste management against a backdrop of government spending uncertainty.
The contract, which will cover refuse and recycling collections in the West Midlands council of Sandwell, is estimated to be worth 650 million pounds to the firm over the course of 25 years, Serco announced Thursday.
Serco, which also runs London’s new cycle hire scheme and prisons, said that its Waste Improvement Plan will begin in November when the contract is formalised. The Waste Improvement Plan will see 35 per cent of Sandwell’s waste converted into renewable energy.
Government budget cuts, which are currently being hashed out in the coalition’s latest spending review due out for October, have caused many outsourcers such as Serco to raise the alarm. Many of these firms are dependent on state contracts and would suffer in the coming years should the coalition drastically cut back on local spending.
Analysts have predicted, however, that such companies will also benefit from budget cuts as Downing Street moves toward streamlining the public sector to further save money. Shares in Serco stayed flat after the announcement coming in at 543 pence per share on Thursday.
Local authorities have also expressed concerns over upcoming budget cuts as local councils strive to increase recycling and waste reduction in time for national and EU targets. Budget cuts could make it more difficult for councillors to implement recycling waste management infrastructure and pilot new schemes.
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