Funding
As part of establishing the preferred options, a cost-benefit analysis will be required. The cost-benefit analysis will identify any areas where additional funding is required, what likely set-up costs could be, and potential income streams and revenue that could be achieved in the future to offset these costs.
The potential for securing funds from nonlocal authority budgets should be explored in addition to identifying both capital and revenue funding from within local authority budgets. Within waste management budgets, some small savings in revenue costs may be identified through reduction of waste to disposal, however greater savings may be found looking across the whole authority, identifying where savings might be made in some social services budgets, for example through provision of refurbished goods to households in need at a reduced cost.
Capital costs may include significant site infrastructure costs, including additional buildings, hard-standing, fencing, signage, lighting and other related services and civils. Land purchase or leasing might also be necessary.
Your authority may have economic development teams with expertise in bringing in external funding for new projects. Reuse projects which are more ambitious may require multiple tiers of financial support over time.
Larger investment may also be possible through longer-term contracts with the private sector, so that capital costs can be depreciated and paid for over a number of years. The initial investment can then be covered in monthly contract payments, for example over a term of 10 years or more, depending on the scale of the project and preferred longevity of the contract. The best length of contract could be determined by the optimum depreciation term of the most costly assets.
Read about how initial investment of 1.6million euros has allowed the ReTuna reuse mall in Sweden to flourish on our case studies page.
Councils will need to consider both the initial capital outlay and the on-going running costs of the new service. Many of the costs of handling reusable items are already included in local authority revenue budgets, albeit the items might be managed as residual waste. Councils will need to compare the current costs of managing reusable and recyclable items with the new revenue costs when the items are segregated and managed separately. There are likely to be reductions in some budget line costs with increases in others. Potential income will also need to be explored, and as previously mentioned, the savings to associated service budgets, such as social services and housing.
For both capital and revenue budgets councils will need to go through their internal processes to identify existing budgets and fund potential new on-going budget requirements.
