Veolia’s Payment and Performance – An Analysis

After meeting with Mr Richard Bradbury (Head of Environment Services) and trawling through the payments and performance section of Veolia’s contract, we now have a better idea of how much Veolia are paid, along with the deductions they suffer for poor performance.

The first point that we must make is that our previous figure of £338M paid for an 8 year contract is actually incorrect and was based on a slightly misleading statement on Veolia’s website:

‘The eight year contract with a possible eight year extension is worth an estimated £338 million’

This estimation was seemingly based on the assumption that the eight year extension would be granted coming out at ~£338M for 16 years.

Mr Bradbury has explained that the payment (before deductions) is £152M for 8 years, or around £19M per year. The street cleaning costs come out at £5.8M/year for the whole Borough.

This is still a significant amount of money and it remains an open question whether we in Camden receive a street cleansing service worth £5.8M/year, or roughly £16,0000 per day. Although most areas are kept relatively clean most of the time, there are still plenty of problem areas that are almost always littered.

The issue is perhaps that, whilst the contract specifies street cleansing services which on paper could be said to be worth £16,000/day, it is certainly not the case that Veolia strictly adhere to the terms of their contract.

This leads us to the next important point. What happens when Veolia don’t stick to the terms of their contract?

Before delving into this, let us first examine Camden’s own responsibilities, which shed light on how and why the contract is written.

The A/B Cycle

First of all, the Veolia contract is designed to ensure that Veolia fulfil Camden’s legal obligation to keep the streets at a level set out in the Environmental Protection Act and its Code of Practice. Being law, this has to be the cornerstone of any examination of the performance of Camden or Veolia.

Central to the Act are the four grades of cleanliness: A, B, C, and D. These are more fully explained in this part of the website. In short though, these grades can be explained thus:

A – Absolutely spotless

B – Littered but at an acceptable and barely noticeable level.

C – Noticeably littered and at an unacceptable level.

D – Highly littered and totally unacceptable.  

The law is very clear about what grade our streets should be at, and for how long.

The difference between Grade A and B is contentious and often claimed to be unworkable. The law is quite clear that even a single piece of litter on a road means that the road cannot be at Grade A. So even a single bottle cap on an otherwise completely spotless street means that the street is at a Grade B.

In other words, Grade A is taken to mean absolutely clear of any kind of litter, however insignificant.

The Act acknowledges that litter builds up and that it is impossible to stop this from happening. Thus it is not illegal for litter to build up on a street or a square. But only small amounts of litter are permitted to build up before it becomes illegal. This is the point of Grade B. Grade B is determined as ‘acceptable’, but still littered. Grade C, and certainly Grade D, are unacceptable at any time, except in some sort of extraordinary circumstance – for example, in a strike of Veolia employees.

The Act then specifies that after any street cleansing activity, the area must be restored to Grade A. This is a roundabout way of saying that written into law is the requirement that street cleaners must remove all litter from an area after visiting there. Given that a Grade B area only has minor amounts of litter, this is not an unduly difficult thing to achieve.

Thus, we should be seeing a cycle of roads being cleaned to Grade A, dropping to B, and then restored to Grade A – what we call an A/B cycle. Seldom, the Grade might drop to a Grade C or even D – but afterwards, it must be restored to a Grade A.

How an A/B Cycle should look in theory. The valleys show when a street cleaner visits a road – after leaving the road, the cleanliness is restored to 100% (Grade A).

The above graph shows how the A/B Cycle should work in theory, the line showing the cleanliness of the area. The scale on the right shows the ‘cleanliness’ of an area, so that 100% corresponds to a Grade A. Litter builds up in small amounts and then a street cleaner visits and restores the street to a ‘Grade A’ – with no litter left whatsoever. After the sweeper leaves, there is inevitably an accumulation of litter – but the aim is to restore the area to Grade A before it reaches Grade C.

Occasionally, of course, a road might reach Grade C – for example if someone fly tips a piano on the street. The local authority then has to act quickly to remove the piano and restore the street to a Grade A.

The way in which a road becomes littered is difficult to predict, as shown by the randomness of the dips in the graph. It is up to the local authority to work out how often a street needs to be swept to avoid it dropping into the danger zone. However, every time a street cleaner visits, under any circumstance, the area should be restored to Grade A – with no litter remaining.

The A/B Cycle is theoretically at the heart of any street cleansing operation.

Veolia and the A/B Cycle

Thankfully the requirement to adhere to the A/B Cycle is written into the Veolia contract:

54.2.1 on completion of any cleansing operations, achieve Grade A standard as defined by the Environmental Protection Act 1990; and

54.2.2 ensure that all areas covered by the Contract are maintained to Grade B or above as defined by the Environmental Protection Act 1990. When the standard falls below Grade B, the Contractor shall restore cleanliness to Grade A within appropriate timescales as set out in the Code of Practice on Litter and Refuse (“the Code”), and subsequent relevant legislation and guidance.

The subsequent timescales mentioned can be taken in our area to be twenty-four hours at most. So if a street or square becomes noticeably littered, it should be restored to being spotless by the next day.

However, we know from looking out of our windows and walking around the streets and squares that the A/B Cycle is not commonly fulfilled. So if Veolia breach their contract, then what deductions are made from their payment?

A resident or a Camden officer can make a report of an area below Grade B in a number of ways, the most efficient of which is via the Clean Camden app. This report is given directly to Veolia, although Camden still have access to those records.

The B/C Cycle

The surprising thing is that no deduction is made for such a report. Despite a valid report of a road found at Grade C or D being a breach of contract, and also a breach of law on Camden’s behalf, Veolia are not fined for this.

Instead, they are given a time limit to restore the reported area to acceptable standards. If they do not succeed in this, they are then deducted an amount roughly equal to £25. The time limit is at most 12 hours.

The wording is vague, but if the same issue is reported again after the time limit has passed, then Veolia can face an extra deduction of about £70 if the area is not restored within at most six hours.

So if an area is found to be below Grade B, and it is not restored within 24 hours, Veolia can face a fine of around £100 per incident.

On the face of it, this seems to be a fairly good system. It uses the profit incentive to spur Veolia into working efficiently and quickly to restore streets to a good standard within a reasonable time scale.

But this system is flawed and leaves plenty of loopholes for Veolia to exploit, perhaps explaining why we often see such littered streets.

Firstly, there is no deduction for allowing a street to drop below standard.

Thus, Veolia can (and do) allow streets to become littered, knowing that there will be no deduction for allowing this to happen. They only have to react when the issue is reported. There is no real reason why a report will follow soon after a breach – it could be a week or more. In theory, one of Camden’s monitoring officers would pretty quickly find the breach and report it through the correct channels, putting into motion the £100 deduction process. But if a monitoring officer is away, or forgets to visit a road for a few days, it allows Veolia to save money by not cleaning that road until someone notices the problem.

Even at that point, when a resident perhaps starts to kick up a fuss, it by no means sets in motion the 24-hour response service. The resident would have to report the matter through the correct channels – and in all honesty, most residents have no idea about this dynamic or how to report issues properly, adding a further delay to the process. Even councillors generally don’t understand.

In essence, this leads to an odd game of cat-and-mouse whereby Veolia can neglect to clean certain roads for a while, whilst waiting for someone to notice. When someone notices and reports the issue, then of course Veolia have to act quickly to clean up the place. But in that interim where Veolia are waiting for a report, they are saving on their resources by not clearing up that area.

Stated more succinctly, there are no consequences for allowing litter to build up. Only for not cleaning it up quickly after someone has reported it.

Thus there is an inconsistency between the terms of the contract itself and the deductions for breach of contract. Essentially, if Veolia stuck to the terms of their contract we would have no reason to complain. But Veolia rather than adhering to the contract, simply avoid deductions, and that is what causes the issues that we see.

To avoid immediate deductions, in theory Veolia need only to clean up an area once a report is made that it is at Grade C or below. Bear in mind that written into law and also the contract is the assumption that Grade C or D are unprecedented rather than commonplace. After visiting the area, if they restore it to a Grade B rather than Grade A, they will face no deductions.

Thus, rather than stick to the A/B cycle set out in the contract, they can stick largely to a B/C Cycle, of allowing areas to drop to Grade C and restoring it to Grade B, and repeating. And this is exactly what we see in most parts of the Borough.

What we often see in Bloomsbury

The problem with this is the common phrase that litter breeds litter. If an area is already littered, people see less of a problem with littering themselves. This is exactly why it is written into law that areas need to be cleaned to Grade A standard. If an area is never truly clean, there is never sufficient motivation for people to not litter the area themselves. So allowing an area to remain littered by not properly cleaning it causes a runaway effect of an area becoming very quickly littered, rather than relatively slowly, as in the A/B Cycle.

Eventually it reaches a stage whereby a road, if left consistently at Grade B/C, will become a ‘dumping ground’ and fly tipping along with littering will become so persistent that it is impossible to keep on top of it. Then the street rapidly descends into filth. This is a dynamic that occurs time and time again in Bloomsbury.

Now the situation is somewhat more complicated than this but goes most of the way to explaining things.

Firstly, there are further deductions if an annual independent survey finds that Camden’s streets are largely at an unacceptable standard. These deductions are actually quite hefty. ‘Keep Britain Tidy’ (a charity whose purpose is to keep Britain tidy, but who were recently publicly criticised by Jeremy Paxman as being ‘useless’) conduct an annual survey of the state of Camden’s streets, using a methodology which is apparently highly respected and churns out a percentage. This percentage is meant to represent the proportion of Camden’s roads which are below Grade B. This percentage last year was 3.8%.

It is worth stating that no methodology, however well respected, will churn out a truthful figure that represents how littered Camden is, or even how many roads are below Grade B – it is simply an impossible task. The methodology will assess only a random sample of roads at a random time and judge all of Camden all year on that basis. We can only hope that Camden are not notified in advance of which roads these will be and when the assessment will occur.

The precision indicated by the decimal point also adds further to the slight absurdity of this figure. We are given no indication of uncertainties which any real scientific measurement will carry, but one could pretty confidently expect an uncertainty of at least 1%.

We can also criticise the measure itself – as it takes no account of how often or if at all the streets of Camden are restored to Grade A. So yet again we see that in the payment schedule, no regard is paid towards the A/B Cycle.

That being said, if the percentage were to exceed 6% (which is the allowed level in the Veolia contract) then for every percent above 6%, Veolia would be deducted £20,000.

It seems a lot, but to put things into perspective, if Veolia chose to just not clean the streets at all, then Keep Britain Tidy would most likely find that all of Camden’s streets and squares were below Grade B, taking into account fines for litter, detritus, graffiti, and flyposting, then Veolia would still be paid at least £2,237,500/year for their street cleansing services!

Examining these numbers in this way goes some way to exposing the inherent absurdity in some aspects of the payment schedule.

The further loophole which has also been exploited is that once the 24 hour time limit has been exceeded, there is no further incentive to react quickly to clean a street or square up. This explains why sometimes we see streets or squares reach a totally unacceptable level of filth but Veolia do not react for days to repeated reports of the breach. Once they have exceeded their time limit of 24 hours, there are no further deductions that can be faced for continued inaction. This explains how, as in the above graph, areas can descend into Grade D for days with no action by Veolia.

It is however a little naïve to simply describe ‘Veolia’ as keeping the streets clean. In reality, Veolia is comprised of numerous employees all simply trying to do their job. In the end, it is no executive who cleans the streets for us. It is the street cleaners themselves – and such a job is unfortunately and unreasonably commonly regarded as being a very lowly profession.

So whilst we can in theory assert that Veolia are purposely following a B/C Cycle to maximise profits, it is a little more subtle than that. It is likely that by following a B/C Cycle Veolia are making little to no money whatsoever.

The way the slip from an A/B Cycle to a B/C Cycle occurs in reality is simply as a result of circumstance. A street cleaner is responsible for sweeping the streets to a Grade A. But it is likely that the cleaner has no notion of a Grade A whatsoever, even less of his responsibility to clean a street to that standard. Surveys have suggested that the majority of street cleaners are untrained, and it certainly seems that way in Bloomsbury.

Thus, unless a sweeper takes exceptional pride in his work (which we can accept as unlikely) he will be looking to do the bare minimum possible to earn his wage. We see this as evidently being the case. Most sweepers that we see are slovenly in their work, and it is a common joke in Bloomsbury to remark upon how they walk past vast swathes of litter with no cause, or pass overflowing bins without emptying them, or smoke a cigarette and chuck the butt on the floor. It is natural for such unmotivated people to gradually attempt to reduce their workload by one day missing a road or two. In this manner, a street will drop to Grade C.

Then a monitoring officer or a resident makes a report of this drop to Grade C. The sweeper’s manager will then presumably pass on the report to the negligent sweeper and he will reluctantly begin sweeping the road that he missed. But perhaps now he will seek to neglect another road, or immediately cease to visit the reported road. In the end, the individuals who understand the cleansing needs of our streets the most are the sweepers themselves, and unless sufficient motivation and education is provided to them, they will always be doing as little as they can to get by – in other words, they know best the corners that they can cut. From their point of view, Grade B is acceptable, and they will never take the care to remove the one fag end that makes a road a Grade B rather than Grade A.

So we see that at all levels, the system pushes Veolia to operate in a B/C Cycle rather than an A/B Cycle. It is frustrating to see this, as there really is no inherent reason why we should be trapped in a B/C Cycle. It is simply lack of motivation to push the sweepers that extra mile to get things clean.

There are however a number of other factors that propagate this attitude. Poor pre-existing environmental quality (excessive advertisement, poor pavement surfacing, street clutter) can propagate an attitude of ‘what’s the point’. Thus motivating cleaners and residents to live in an A/B Cycle is just as much about the architecture of the street environment as it is anything else. If nobody can see the point in living in A/B rather than B/C, then why make the extra effort to live in A/B?

Such a thing is seen commonly all around the country, and explains why littering is correlated with ‘ugly’ areas. This is why Save Bloomsbury takes the rather unorthodox line of combining both littering issues and planning issues – an improvement in the quality of the street environment should provide motivation both for cleaners to clean properly and for the public to litter less.

The 85% Rule

On the point of the public’s role in littering, we should examine Camden’s and Veolia’s role in emptying and providing bins in Bloomsbury.

Naturally, it is easier to comply with legislation if bins are provided and the public use those bins, rather than dropping litter on the floor. In theory, if everyone used those bins, there would be no need for street cleaners at all, and the A/B cycle wouldn’t even exist. Instead, we would always be at Grade A.

Written into the Veolia contract is the requirement that no bin is ever full – so that the public always have a place to dispose of their waste. The most contentious point in the contract is perhaps this, the 85% Rule:

55.1.2 ensure that no bin is ever more than 85% full or overflowing

It is quite evident to any resident of Bloomsbury or Camden that this clause is constantly breached. If we watch carefully, we will note that street cleaners (whose responsibility it is to empty bins as well) are indeed aware of the 85% rule. They are often seen emptying bins that are not yet full. But we also see all the time bins overflowing. This is quite often the cause of litter in a square for example, and the cause of great frustration for those trying not to litter. Nobody wants to carry litter past full bins, leading to accumulations within bins, around bins, and in other ‘hidden’ places that act as overflow bins – behind electrical boxes, in odd crannies, etc.

So what happens when Veolia, through poor management, allow a bin to become more than 85% full?

The contract is again vague in its wording, but it seems that Veolia are deducted about £35 for such an occurrence.

This seems to be a reasonable amount, but it again is flawed in that it relies on the issue being reported. Residents of Bloomsbury cannot be expected to report an overflowing bin every time they see one – thus we resort to the game of cat-and-mouse between monitoring officers and Veolia again.

There is then the extra problem that there is no further deduction for not emptying the bin in a timely manner. So once the bin is reported as being full, they are deducted £35, and there is no incentive to then empty the bin! This means that Veolia can (and do) choose to not empty full bins once they have been reported. This can be quite a cost-effective method. The on-street black and green recycling bins, which only have a small hole for waste, are often allowed to be stuffed full and then left full. Veolia are still paid a fixed sum per bin – essentially to pay for the emptying of the bin – but the bin is left unusable. A bin on Judd Street was left in this manner for many months until repeated reports were made on Clean Camden and the monitoring officer was notified. It was then finally emptied.

There are similar dynamics in the removal of fly-tipped waste or fly-posting. If fly tipped waste is not removed within 24 hours, a fixed sum of about £25 is deducted. But thereafter, nothing more is deducted, meaning that there is no incentive to remove the item quickly once the 24 hour deadline is missed. Again, we often see items removed very quickly after reports, or inexplicably left for days. This goes some way to explaining why this happens.

Conclusion

We can see that many of the inexplicable problems with littering that we suffer in Bloomsbury, and all of Camden, are quite adequately explained by looking at how the profit incentive is used ineffectively to motivate Veolia to fulfil their contract. It is true that most of the streets, most of the time, are acceptable. This attests to the, on the face of it, effective use of the profit incentive in the Payments and Performance Schedule. But there are many odd loopholes which Veolia’s employees seem to be well aware of, which cause occasional unacceptable incidents which often offend the reason of residents and businesses. This leads to a good deal of animosity when residents, faced with one of these ‘freak’ incidents, develop a conception of Camden as incompetent and irrational.

The system of deductions however is not so broken that it requires a total overhaul to be effective. A widespread use of Clean Camden by residents along with a well engaged monitoring officer can lead to much better conditions. Indeed, the contract somewhat relies on the proper reporting of incidents by residents so that back roads aren’t forgotten. Engendering a spirit of community-based monitoring will for the most part put Veolia and Camden back on track.

None of this, however, will push sweepers themselves that extra mile to sweep streets to a Grade A standard, which is both required by law and not unattainable in most places. Proper action by Camden to motivate sweepers and also clean up the street environment would help to achieve this. An easy to follow procedure for reporting negligent cleaners would help to better hold them to account over shoddy work.

Next Steps

So what can we do with the knowledge that we have gained?

The first and most obvious step is to use Clean Camden to report absolutely everything. It is ironic that this website poked fun at the fact that Camden’s response to every single littering complaint was to use Clean Camden – even in the case of negligent sweepers! Now we can see that there is some sense in the madness, as a proper use of Clean Camden will put huge deductions on Veolia’s table.

We will begin an education campaign to let residents know of the power of Clean Camden. Knowing that Veolia will be fined for not responding will hopefully empower residents who have felt overlooked. This will amend issues in the short term, but also engender a community spirit of monitoring the area. Such an approach in the Kings Cross ward has had immense effects on the cleanliness of the area. Hopefully this approach can spread to all of Bloomsbury, or even Camden.

It still lies with senior employees of Veolia and Camden to take proper responsibility for the poor performance of street cleaners. Thus far, we still have had no admission that the street cleaners documented on this website were performing badly.

There are still many more important issues that do not fall within the scope of this analysis – such as preventing fly tipping incidents or providing more or larger bins. These cannot be addressed by Clean Camden and will require a separate approach.

What you can do.

13:37 22/10/2019

3 thoughts on “Veolia’s Payment and Performance – An Analysis

  1. Thank you for this very helpful and detailed analysis. You pointed out that “there are no consequences (for Veolia) for allowing litter to build up. Only for not cleaning it up quickly after someone has reported it.” This suggests quite clearly the core of the problem. Only Camden Council can create “consequences’ for Veolia for not fulfilling its contractual obligations in providing value-for-money for Camden ratepayers. More inspection by the Council of streets could do the job, or much more citizen reporting of littered streets, preferably on a daily basis.

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  2. £16,000 per day seams a lot, but there are some 170 miles of road that Camden is responsible for, so the cost is £94 per mile per day. Not a lot really and no where near enough to get to the standard A/B every day.

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    1. £94 per day is the cost that Camden and Veolia both agreed upon to fulfil the terms of the contract, and so it is certainly enough to get by. It should cost Veolia about £65/day for each street cleaner (assuming minimum wage). A street cleaner should be able to cover at least five miles to Grade A or so over a working day reducing street cleaner payments in a day to £13/mile. Where does the other £81/mile go? Granted one has to pay for running cleansing vehicles and transport etc, but that hardly amounts to £81/mile.

      You also forget that the majority of Camden’s roads further north are suburban which are swept twice a week at most – so the daily money available per mile in Bloomsbury is much higher. Even assuming that half of Camden’s roads are suburban (which is a huge underestimate) then we should be looking at upwards of £150/mile daily in Bloomsbury. Nobody can argue that that much money is spent on street cleansing here.

      The mathematics is often pretty opaque, but the main issue is that however much Veolia are paid doesn’t explain why street cleaners arbitrarily decide not to sweep a street for weeks on end. See https://savebloomsbury.co.uk/2019/08/19/appendix-2-the-chase-in-full/ for example. His work theoretically amounted to around £100 in ten minutes at the rate he was going – but nothing was swept at all. That is a good earner for Veolia.

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