15 December 2008Financial Exposure of Scottish LA's

Report Summary

The current global financial crisis has had a major impact on the income that Local Authorities in Scotland are receiving for their recyclate. The principal materials affected are, paper, card, cans and plastics. Glass and organics markets have been relatively unaffected, as the domestic demand has remained consistent.

From a survey of Scottish local authorities (21 of 32 returned data) carried out in early December, it is estimated that the net impact of the fall in materials is £3.9 million if annualised. This is based on the change in prices being offered by the market from August 2008 to November 2008.

Furthermore, if prices were to continue to fall to a point where councils received no income for these principal materials the total annualised financial impact on Scottish local authorities would be £7.7 million as illustrated on Figure 1 below. The majority of this impact would come from the News and Pams market, although with 16 councils reporting fixed price contracts this has helped reduced local authority exposure to the fall in prices.

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