Guernsey Waste records £1.4m. deficit in first year of strategy
GUERNSEY WASTE recorded an operating deficit of £1.4m in 2019 – the first full year since the introduction of the island’s new waste strategy.
States Trading Assets deputy managing director Richard Evans said the aim was to avoid sharp rises and the shortfall would be recouped in future years.
‘This is a 20-year waste strategy, which aims to recover the costs over the life of the strategy,’ he said.
‘Our pricing and charging structure therefore needs to take a similar long-term view.’
The amount that islanders had to pay last year, for all their waste and recycling services, was considerably less than was anticipated at the outset, he said.
‘Therefore our income was significantly less than we had forecast, but so too were our expenses. That was the result of the significant reduction in waste we have seen since the changes to collections and charges.
‘The objectives of the waste strategy are to reduce the amount of waste we produce, which will cost us less in the long run; deal with the material we do produce better, which includes recycling more of it; and to break even in the long run.
‘These are all long-term aims, but two out of three we have achieved in the first year, beyond our expectations.’
The final one, he said, would be achieved over the 20-year life of the strategy.
‘It would have been something of a miracle had we achieved that in the very first year, but we will over the long term, avoiding where best we can any need for any sharp increases or decreases,’ said Mr Evans.
Under the new charging system, which came into effect in January 2019, households pay Guernsey Waste an annual fixed charge of £85, plus a separate collection charge from the parish, which was on average about £77 per household last year.
When the ‘pay as you throw’ charge is included, households were expected to spend on average around £5.90 per week on waste services in 2019. The reduction in general rubbish bags was much higher than forecast. As a result, the average cost per household in 2019 is estimated to have been around £4.25 per week.
Guernsey Waste froze household charges this year.
The £1.4m deficit is before depreciation. The depreciation charge relates to the capital costs of the new facilities at Longue Hougue. As those were funded from the States Capital Reserve, the cost is not included in the expenditure to be recovered through waste charges.
