The shift in the business population reduces the size of the commercial waste market in the UK
Demographic changes in the UK have occurred not just in the general population, but also in the business population. These changes make interesting reading in terms of the future prospects for waste and resource management.
Latest figures published by the Department for Business Innovation & Skills in October 2013 estimated that there were 4.9 million private sector businesses in the UK at the start of 2013, employing 24.3 million people. While this represented an increase of 100,000 businesses over the previous year and a 41 per cent increase since 2000, the underlying picture has also shifted. The number of businesses without employees (i.e. sole traders) has increased by 56 per cent since 2000, reaching 3.7 million in 2013 – 75 per cent of the total. Concurrently, the number of employing businesses has fallen – by 26,000 from the start of 2012 – as has the number of large private sector businesses with 250 or more employees. What might these figures mean for the recycling and resource management sector?
Sole traders are more likely to operate from home, and use local authority residential kerbside collection services and local “bring” sites for both their residential and business-related waste. The prospect of these businesses setting up a separate service for their business waste seems remote, in effect reducing the size of the commercial market by around three million businesses. But while overall waste volumes would increase relative to the average home, their recyclates should also be captured in the residential waste stream. Overall, because business waste is generally cleaner, local authorities should be able to increase their recycling rates by a greater margin relative to the average home.
The shift in the business population points to a far more competitive environment in which waste and resource management companies will have to operate, with players chasing a diminishing number of employing businesses – those which are more likely to require the services of a dedicated waste management company. This is already evident in the extremely keen prices currently on offer to commercial customers.
The shift also has implications for forecasting future waste treatment capacity requirements. If commercial waste from 3.7 million businesses is indistinguishable from, and is formally collected as household waste, then the balance between the UK’s commercial and local authority / household waste treatment capacity needs must be revised to account for this shift.
Defra’s decision to ‘step back’ from active intervention in the waste management market in England does seem to be premature.