This quarter saw a total of £4.4bn worth of contracts awarded by local government contracting authorities. This continues to reflect the trend of a restricted procurement budget for local governments as total contract award values remain at roughly half the value we saw in 2021 Q4 (£7.9bn).

The top supplier of this quarter – by the total value of contracts awarded to them – was Biffa Waste Services Ltd, driven by a contract awarded by Leicestershire County Council for the treatment of residual waste. As the highest value contract awarded by this council to date, the contract is set to be worth between £150m to £650m dependent on the total tonnage treated. The contract has a minimum duration of eight years with the option for an extension of up to 25 years, delivering all ‘black bag’ waste to the Newhurst Waste-to-Energy facility. This new site, developed by Covanta, aims to reduce waste sent to landfill whilst increasing renewable energy production by generating clean energy through the combustion of residual waste.

The company has a history of supplying waste management services to local government, however, this contract has the potential to be their largest to date.

This contract also made Leicestershire County Council the largest contracting authority by total contract award value this quarter, having also awarded a further 33 contracts worth £18m combined.

Waste Management

Sectoral analysis of this quarter shows another shift in the proportion of contract award value across sectors. The construction sector has shrunk to £1.5bn, yet still retains the largest market share at 35%. This is again followed by health and social services which has grown to £1bn. Biffa Waste Service’s contract influenced a large shift towards the environmental services sector, increasing this sector’s market share to 16%. Aside from this contract, the quarter has seen local government authorities awarding an increased number of contracts focused on recycling and waste management. Further examples of this include contracts awarded by Lancashire County Council, Horsham District Council and North Lincolnshire Council, as well as a further seven related contracts worth over £1m.

The increase in contracts awarded to the environmental services sector may also reflect a positive trend for SMEs as – excluding Biffa Waste Management – eight of the top 10 suppliers within this sector from this quarter were SMEs, a notably large proportion compared to other sectors examined.

Regional Analysis

Examining only contracting authorities within England, this quarter has seen a shift away from the prior pattern of strong local-to-local procurement at a regional level. We can again see the outlier caused by the £650m residual waste disposal contract awarded by Leicestershire County Council in the East Midlands from South East-based Biffa Waste Services, but other regions appear to be awarding contracts largely outside of their region as well, such as the South and North West. The East of England appears to be procuring the most locally, followed by London.

Hot Topic: Social Services

Another notable trend from this quarter has been an increase in the value of contracts awarded to VCSEs. Four of the top 10 suppliers were charities, with a focus on social care, more notably drug and alcohol rehabilitation services. The largest health and social care contract of the quarter was awarded by Leeds City Council to Humankind, a charity that has provided services to authorities across the country. This £176m contract was for the provision of an integrated community drug and alcohol service. This was one of three large contracts focused on drug and alcohol rehabilitation services, the others were awarded by Rotherham Metropolitan Borough Council and the City of Bradford Metropolitan Borough Council. These services look to provide support for rehabilitation as well as introducing educational programmes to encourage the prevention of drug and alcohol abuse. The contracts continue to show the rising trend of local government authorities procuring social care services, also tackling issues such as sexual health and foster care.

This article was written by Tussell for LocalGov