Redbridge’s council-owned waste collection company could be scrapped only three years after it was set up.

Arm’s-length business Redbridge Civic Services (RCS) took over waste and recycling collection from the council’s in-house team in August 2019.

Redbridge hoped RCS would make a profit from waste collection by offering extra services “at competitive commercial rates” and “protect” the workforce.

However, a report by corporate director of strategy Julian Ellerby said a “fundamental view of refuse collection” is now planned with all options on the table, including bringing it back in-house, a shared-service model or fully outsourcing.

The report notes: “The current business model may have been the best approach to take but there may also be room for improvement.”

Redbridge now plans to spend £20,000 on “external commissioned expertise” to advise on the best course of action to take.

A recent update on RCS presented to a council committee known as the Shareholder Reference Group (SRG), said it hit “most” of its targets but is facing a range of “ongoing pressures” that include staff costs rising by 14%.

Other pressures include “operating costs exceeding the contract price”, 8% staff sickness, 9% reported accidents and “third party costs” related to the high insurance excess charges to the council.

Although the exact financial state of RCS has been kept private, an update last year predicted it would make a loss of £141,000 on the council’s waste budget of £5.4m.

Public accounts for RCS, filed for the year ending March 2021, show the company had a £2.4m debt in 2020/21 that dropped to £400,000 in 2021/22.

Despite RCS being wholly owned by the council, a formal contract between the two cannot be signed off due to “further negotiations and resolution of financial challenges” faced by the company.

Redbridge’s cabinet plans to reconsider the future of the waste company in June next year.

RCS is overseen through the SRG, which sits in private but publishes reports containing information that is not commercially sensitive.

SRG members include council leader Jas Athwal, cabinet members John Howard and Vanisha Solanki, alongside five senior council officers and former chief executive Lesley Seary.

According to the council’s website, the SRG has met three times since it was set up to oversee and exercise control over its business ventures in April 2019.