CORK COUNTY Council is considering selling its refuse collection service catering for some 40,000 customers in the wake of an EU directive requiring local authorities to charge VAT on the service, The Irish Timeshas learned.
Cork county manager Martin Riordan refused to be drawn on the issue when questioned by Labour councillor John Mulvihill at this week’s council meeting, but he later briefed party leaders on the situation facing the council following the EU directive.
Mr Riordan told The Irish Timesthe council was exploring options for the service, including a restructure, introduction of a price rise from next year and exiting the refuse collection market. No decision had yet been taken.
Mr Riordan said the council had decided in its budget not to raise prices for customers this year, which meant the council had to carry the cost of the VAT directive itself – €700,000 for a six-month period and €1.5 million for a full year, he said.
The VAT directive comes on top of a council bid to effect savings of €1.6 million in 2010 through work practice changes including reducing overtime and manning levels, but it had not been possible to get union agreement on such measures, he said.
The result was the council will have to find an extra €2.3 million to fund the service this year, with the VAT cost of €700,000 for July-December making it no longer possible to run the service as currently constituted.
Mr Riordan confirmed about 25 per cent, or 10,000, of the 40,000 refuse customers enjoy waivers of varying degrees, and this is costing the council a further €1.9 million in lost revenue, which it has to meet from its own coffers.
Informed sources say the service, which has a turnover of about €12 million a year, is likely to prove an attractive target for private refuse collectors given the 40,000 customers – of whom 90 per cent are domestic, living on well-established routes.
Cork County Council employs over 60 people directly in its waste collection service, with a further 25 staff employed in support services such as billing.
It operates a pay by weight system for refuse collection.
Socialist Party representative for Cork North Central, Cllr Mick Barry, a member of Cork City Council, strongly criticised any move by the council to sell the service, saying it would lead to higher charges for consumers and an end to waivers.