City council considering ‘major investment’ in waste firm amid recycling woes
UNDISCLOSED SUM WOULD HELP COMPANY WORK TOWARDS ‘LANDFILL ZERO’
COVENTRY City Council is set to make its second significant loan in a month despite facing pressure on budgets due to the cost-of- living crisis. Members of the Cabinet will consider a “major investment” in company Tom White Waste at a meeting next on Tuesday (October 11).
The council-owned business is facing “significant cost pressure” and is only just breaking even because its old recycling plant keeps failing. Tom White currently sends 46% of commercial waste to landfill at a cost of £1.8m per year.
Council officers recommend granting a shareholder loan to the company so it can pay for a new Material Recycling Facility (MRF) with the aim of being ‘landfill zero’ in future. They say the new plant will recover ten times more waste for recycling (70%) than the current facility.
Coventry City Council will “financially benefit” from the scheme as rates for borrowing money to grant the loan will be lower than the interest rates they charge to Tom White Waste, officers say. A third party loan has been considered but the council would bear the risk of this without any benefit from interest payments, the report adds.
The exact amount to be loaned has not been disclosed and will be considered by cabinet in a private report. The council’s public report, however, states the decision will have cost implications of more than £1 million per year and it is described as a “major investment.”
The Local Democracy Reporting Service (LDRS) has asked the council what the full value of the loan will be. News of the impending loan comes days after up to £1 million was agreed to be loaned from the council’s Treasury Management fund to the City of Culture Trust.
Coventry City Council is currently forecast to be over budget by £9.5 million at the end of the financial year - mostly due to overspend in children’s services and the cost of the bin strikes. Last month finance manager Paul Jennings noted that “this is a high figure by historical standards and represents a serious cause for concern for the council.”
Once the report on the Tom White Waste loan is considered by the council’s cabinet it will go to full council.
If the plan is supported, the new facility will be operational by 2023, the council says. Cllr Richard Brown, Cabinet Member for Strategic Finance and Resources, said giving the loan will have economic and environmental benefits.
He said: “The reason for the loan is to deliver much enhanced environmental performance while also achieving greater business resilience for Tom White. It provides greater market surety and more cost-effective disposal routes.”