Secretive waste firm bailout labelled a scandal...

[dutchman]

Conservative Councillor Peter Male hit out at a decision to bail out a struggling waste firm owned by the council and the decision to keep the figures from the public



A £7.5m bailout loan for a waste collection firm a council bought to make a profit has led to accusations of "desperate measures" involving public money.

Tom White Waste (TWW) was purchased by Coventry City Council in 2020 for £14.9m as part of a strategy of investing in commercial businesses.

A council report, meant to be kept from the public but leaked to the BBC, shows the waste company's mortgage lender has called in its debt due to ailing financial performance, and the Labour-controlled council stepping in to avoid the business going into administration.

A spokesperson for the council said commercial investment had helped to keep front-line services running.

But speaking during a council meeting on Tuesday, Peter Male, Conservative shadow cabinet member for finance, said the bailout was "a desperate measure to avert the loss of significant millions of public money", and suggested attempts to keep the financial details of the bailout secret were "a scandal".

The private council report showed the waste management company, which employs 150 people, was generating £1.5m cash a year as of 2022/23 compared to £2m when the company was first bought. That was despite the company experiencing growth in the top line revenue, from the £14.5m on acquisition to £20m today.

The report blamed the financial performance on lower profit margins on new contracts as old contracts expired. But it said performance had recently improved after the company's managing director was replaced in September 2024.

The deal will see the council take on the company's assets and lease them back to the business at £600,000 a year for 25 years – ultimately generating a profit for taxpayers if the business becomes as profitable as the council forecasts.

During Tuesday's meeting, Labour councillor Pervez Akhtar said: "In simple terms, the council is buying an income-producing asset at market value. The rent paid by TWW will cover the borrowing costs and produce a surplus."

The latest bailout follows a £22.7m loan taken on by the council to allow Tom White Waste to upgrade recycling facilities in 2022. The local authority said at the time that move would ultimately help to cut costs.

[rebbonk]

...generating a profit for taxpayers if the business becomes as profitable as the council forecasts.

The council hasn't exactly got a good record here, has it?

Maybe the council should do what it's supposed to do and not get involved in speculative commerce, which it is ill-equipped to do.