Self-catering commercial waste collection commentary, urgent correction.

Posted on October 20, 2023

I am embarrassed to say that less than 3 hours after circulating yesterday’s update note I have already been proved wrong about what was supposed to be a rare slightly lighter moment in an otherwise gloomy war-torn update.

As the comment was one of the few points made that relate directly to a tourism and to a pragmatic destination management issue and the item covered related to a matter of fact rather than an assessment of the prevailing situation, I do now need to correct and expand on my comments on, of all things, “bin tax” as the Times has recently unhelpfully chosen to call it. I have amended the original online version of the update to reflect this, however, it has already been published more widely and therefore assuming anyone takes a blind bit of notice of what I report, unintended harm may have been done.

The Controlled Waste (England and Wales) Regulations 2012 (see specifically Schedule 1, paragraph 2’s Classification table line 11 & 12 plus also lines 14,16, 18 & 19).

This regulation applies to any and all waste generated by commercial activity all types of property, regardless of whether that property is subject to business rates (BR) or Council tax (CT).  I was wrong to say that owners of holiday home, short-term lets, or to quote the regulation definition: “domestic property used in the course of a business for the provision of self-catering accommodation”, can choose pay CT and therefore continue to use the domestic waste stream to dispose of waste generated by their business activities. 

Many CT paying short-term let accommodation provider do apparently still use the domestic service and many Councils either accept this state of affairs or at least don’t yet do anything about it. Arguably either because a lack of local scale to justify action, a lack of resource and ability to easily identify “offenders” (the invisibility issues of much of the recent boom in provision) or simply because they haven’t yet got round to addressing, what for many, is a relatively new and still growing problem. 

What was usefully illustrated by the Times article is that in recent years a growing number of authorities, especially those in popular destination towns and tourist areas, have or are now reviewing their approach the application of the 2012 commercial waste regulation.  Some doing so for all the burgeoning post pandemic residential property, home-based commercial activities and not simply for holiday homes, holiday lets, short-term lets, “Airbnb” or, whatever shorthand terminology is used to identify this type of business.

My confusion between the letter of the law and its application in respect of tourism accommodation came about largely because all of the more prominent examples of Councils “clamping down” I was readily aware of until 24 hours ago, have involved a far more targeted approach, directed towards those who have chosen to register for BR but have not then taken the necessary steps to take out a commercial waste contract.

Having had my error pointed last night and having then done the additional research that I should perhaps have done earlier, I have found that there are indeed a number of examples where it appears Councils are applying the regulation to both CT and BR paying self-catering providers as the regulation clearly says they can do. Whether the regulation or some other associated regulation or Acts says they should or must, is a matter I not yet qualified to comment on. I doubt it is or should be mandatory but I simply don’t know for certain.  Other may be able to advise me and then I can advise you all at a later date?

While there may be more of a potential problem around easily identifying those properties paying CT rather than BR and generating commercial waste, once CT or BR payers are identified as undertaking businesses in a property there are absolutely no grey area.  Accommodation provision indisputably generates a volume of commercial waste. It is an offence for anyone, including owner or guest, to carry or dispose of commercial waste without appropriate licences and/or an offence for them to dispose of that commercial waste into anything other than the commercial waste stream. It is also an offence not to have a commercial waste contract in place where commercial waste is being generated and an offence if you or the contractor on your behalf, do not then maintain accurate records of every disposal made.  Its also an offence not to retain those records for previous 24 months, presumably to prove both the existence of a contract and critically its proper usage. There is also no de mimimis stipulated for either the period involved or number of guests being accommodated; 1 paying guest on 1 day is therefore as much a commercial activity, as any number of guests accommodated across any or all days of the year.

It is breaches of one or more of the above that owners appear to have been fined for. Anecdotally it is suggested that it is the knowledge that a particular Local Councils are applying the letter of the law and fining offender that generally then encourages others to rapidly comply and take out and then use a Council or private commercial waste contract.  In the defence of Council’s actions, I have yet to see any evidence of Council’s pursuing property owners without giving due warning via letters, stickers on domestic bins, public notices etc. and typically doing so anything up to 2 years in advance of them first taking any legal action,and then only against those who have ignored further targeted due warning. Other may know differently; please do tell if there are example of no or unreasonably limited warning.

The disposal of waste via the domestic waste stream, isn’t of course “free”.  The waste collected doesn’t simply evaporate. The process of disposal costs Councils significant sums starting with staff, equipment and transportation costs, through things like recycling charges and ending with landfill tax for that which remains.   Generating more revenue to dispose of the same waste they were already disposing of in error, or reducing the waste at source and the costs to the Council by contracting its disposal to private commercial waste services paid for by the business generating it, clearly makes good financial sense to increasingly cash strapped Councils. 

Some tourism interests will of course legitimately argue against the application of additional business costs, or caution against penalising tourism businesses that support local economies.  However, wherever your sympathies lie, ultimately it comes down to the difficult to avoid and hard to answer question of: “why should certain provider, not be expected to bear the same business cost, as all other accommodation providers and all other legitimate commercial businesses operating within the same administrative areas?”.  

Recent developments and new business models have seen the creation and expansion of many new self-catering businesses, Sadly, that rapid expansion has outpaced officialdom’s ability to apply all existing and necessary regulation.  Unless we say no accommodation, business should pay for commercial waste disposal (a nice idea but economically impractical) its patently unfair that some have no choice but to pay because they are known about and already do pay while other don’t have to pay, simply because they often new to the game, harder to spot and, for whatever reason, the rule that say they should pay, are not being universally applied by those that could or should be applying them. 

Rather than seeing this as an attack on business and a threat to the visitor economies of certain popular destinations, personally at least, I tend towards viewing this as Councils belatedly catching back up with recent rapidly developing trends and, in doing so, arguably reinstating a level and fair playing field for all local businesses and for the local communities in which those businesses generally prosper. 

I would welcome the view of colleagues and, in particular, those who have the unenviable task of managing destinations and delivering a cohesive destination product, brand and message to and for consumers, businesses and local residents.

What news if any on the tourism front?

Posted on October 19, 2023 Updated on October 20, 2023

(This update has been amended to reflect that fact that self-catering properties are legally subject to commercial waste regulation regardless of whether they pay Council Tax or Business Rates)

Despite some pretty major events at home and abroad it has been a poor few weeks for specific “tourism news” with other much bigger national and, more recently, international events have taking centre stage.

In the last fortnight I have spent some time trawling through the outputs of various Party Conferences.  With the exception of the odd high-level nod towards the social benefit of leisure and tourism and the occasional fringe or lobbying event, tourism and its economic benefits didn’t really feature. The first thing of course is to say is there is nothing odd in this.  Tourism hardly ever features as a main item in party conferences and in the runup to a 2024, or at the latest a January 2025 General Election, it would be highly unusual had it been included as a substantive item this year.

The focus, not unreasonably, tends to be on the big-ticket items, those most dear to voter’s hearts like: personal tax and tax policy, public expenditure, interest rates, the economy and specifics within this like the future of the NHS, the environment and plans for public and private transport; most of which are of indirect relevance to tourism but not “tourism issues” per say.  Historic past conference season successes like the inclusion of a commitment by all three Westminster Parties to maintain the now sadly defunct Coastal Communities Fund are very rare events indeed. 

The real opportunities lie with influencing Party manifestos, usually equally focus towards a few, higher value issues and, especially in influencing the views and attitudes of serving and of potential new Westminster candidate MPs. I.E., those who may or may not be in the new Parliament and or in Government within the next 15 months.  This is something that every destination might wish to consider doing with their own local candidates?

Influencing the current Government’s thinking on issues dear to the wider tourism industry and to sectors within it, on things like: radical changes to the business rates system, reduction of VAT on tourism services, VAT refunds for international tourism (including by default for EU residents) or calls for more regulation in certain circumstances, doesn’t necessarily fit well with the established thinking of some or all factions within the current majority Party.  On that basis it fair to suggest that there is little if any prospect of significant change around tourism related tax or on new regulation in what’s left of the current term, however convincing our asks of the current Westminster Government may be. 

There is more prospect of influencing other Party’s policy direction with logical and well evidenced arguments.  However, the realities of the current economic conditions and, in particular, the much higher cost of servicing the national debt recently highlighted by the Chancellor, makes unfunded, upfront promises or in particular promises on “fringe issues”, like I am afraid to say is tourism, rather less likely than we might have hoped for.  Labour the most likely candidate to move from opposition to party of government are quite sensibly majoring on financial stability and safeguarding the fragile economic recovery, rather than attempting to please everyone with unfunded promises.  That does mean that trying to influence any or all Parties or their individual candidates before the election is a wasted effort.  Quite the contrary, it just means it’s a work in progress that will probably not bear fruit immediately but still could at some point later in the first or second term in office of any next new Government whatever party it happens to be based around.

It has become very clear in recent weeks that the economic situation is still fragile.  By his own admission the Chancellor’s room for manoeuvre on pre-election tax cuts and freeing up of public spending in advance of a General Election has been curtailed by the frankly eyewatering cost of servicing national debt. There is very little prospect of that position improving dramatically in the next 12 to 18 months whoever sits in no 11.  Indeed, international events in the last week, make the prospect of an unexpected worsening of the underlying economic conditions a very real threat indeed.

Although we are still awaiting indisputable evidences that the same interest rate issues impacting on the Chancellor’s “disposable income” are having a similar impact on the “average family” and therefore the bulk of the domestic tourism and leisure market. (it’s obvious but try proving it to evidential standard).  This has had, we believe, a significant impact on the performance of the UK domestic tourism and leisure industry and subdued the performance of the UK’s and individual destination’s visitor economies. In many places volume appears to have held but value, the ultimate arbiter of success or failure, has been lacklustre and for some sectors/places/products poor.  On the flipside destination would do well to consider which markets or segments are logically more or less impacted by mortgager repayments and other increased household costs.  Among those the “older market”  including early retirees, seems an obvious and in general more available 365 days a year candidate.

Unsurprisingly, low or no cost activities appear to have been particularly popular this year.  These activities have their place but they don’t necessarily oil the wheels of commerce, especially if there is only limited or no appetite for secondary or incidental spending. Pressure on public finances mean that many of the low or no cost activities and, in particular, publicly facilitated events and infrastructure are under increasing threat. In addition, unrecoverable, increased maintenance costs caused by vastly increased usage of public and privately owned assets like beach, parks and gardens etc. merely add to the pressures on sustaining acceptable quality, or indeed, increasingly, on sustaining the provision full stop.

We are aware that a number of events and events programmes are under threat.  Some we also know will not now take place in 2024 due to the withdrawal of funding and/or the very recent closure of tourism departments/ management organisations, facilitating them.  The continuing loss of well-established destination management is especially concerning.  It only serves to compound and outweighs any other short-term negative factor.  Those destination involved, some of major significance, will simply not have the capacity to exploit improving conditions when they eventually appear.  The old adage, cutting your noses off to spite your face, comes to mind.

Generally poor weather in the core summer school holiday months of July and August and the growing suspicions around the potential of an oversupply of self-catering holiday lets, generated by a rapid, large-scale switch from long-term rental to short-term holiday lets in many popular holiday areas are, or could also be, prominent contributory factors in the perceived suppression of domestic performance.  Similarly, the rapid recovery of the outbound holiday market has not and will not help domestic market already facing cost of living related demand problems.  When demand is weak or contracting as it is now, it is difficult not to view increasing domestic outbound travel as a direct competition.  Why Central Government don’t appear to view it that way, remains one of the big three domestic tourism mysteries.

Recent reports from a range of travel operator and low-cost airlines confirm their return to pre-covid levels of trade, albeit at often significantly higher unit cost to the consumer. Put simply those who can still afford to travel abroad are now again doing so. This recovery is firmly evidenced by the sector’s own figures, while the logical, assumption that this recovery will have had to come at some cost to the domestic industry is yet to be evidenced.  Or at least evidenced to the standard required to convince Government that failing to adequately support domestic tourism and, in particular, some support for its promotion, is a market failure issue that needs to be addressed and is worthy of appropriately targeted public funding. That support doesn’t need to be for the marketing itself, but it is needed for the infrastructure that facilitates coordinated destination marketing, I.E. the marketing of places (destinations) rather than the marketing of individual products within them which is very much business of the business themselves.

The Government’s role in tourism isn’t simply all about supporting inbound tourism, but a balancing act between domestic, international inbound and domestic outbound tourism. The former currently being the Cinderella, despite its combined scale and it obvious impact upon almost every community and a, or the key industry in both the most successful and the most challenged Cities Towns and rural areas within the UK and England within it. Levelling up the more challenged destinations in England towards the performance of the best seem to me like a worthwhile aim that any Government should be attracted to, whether or not “levelling up” remains the catchphrase used to describe necessary economic development of which tourism is often the key driver. The other home nations already display a more nuanced approach to the balance of support for inbound and domestic tourism.

 On a much lighter note, a recent Times article on “bin tax” serves to remind us that in sheer frustration a number of destinations are now using existing or new powers to deal with relatively new and emerging problems, mainly relating to the explosion of “holiday lets”.  In this case South Hams Council (in come with a growing number of others) are fining holiday home owners whose guests are found to been using the public waste stream, whilst also cracking down on holiday and second homes use of the domestic household bin service. For those paying a Council Tax and an entitlement to domestic bins it is a more difficult issue to manage. It was very badly research article that fails to understand or articulate the fundamental issues involved. Councils aren’t randomly targeting holiday makers for using public bins to dispose of domestic holiday waste.  They are clamping down on property owners who choose to break the law, avoid local taxation or breaching necessary regulation, in this example, by not ensuring that business waste is dealt with appropriately.

As a holiday or second home owner you have a choice to remain as domestic residence and pay Council tax, or you can choose to register as a business, paying business rates. In both cases you are required to pay separately for either the Council or a private provider to service any commercial waste, generated by your paying guests.  Currently if that rateable value is less than c £12,001 on a single property in anyone Council area “the business” will be eligible for 100% (sliding to 0% at £15k) discount and thus by lucky happenstance or by dint of conscious decision, the owner will pay no Council and some (many?) no business rates and thus, contribute nothing towards local service costs.  Some of those owners stand accused of registering second homes as businesses when they are not operating as such.  Hence in large part moves made in Wales and being developed in England to close the loopholes by better and more clearly define what does or doesn’t constitute a business in terms of commercial, short-term letting and then to enforce appropriate compliance with either business or Council tax regimes as appropriate to their true circumstances.  Not unreasonably these moves are upsetting owners, particularly those who already comply but find themselves subject to, or threatened with, new regulatory check and balances because of deliberate abuse by others.

It is hard to argue that a property registered at business should be allowed to dispose of its waste at no cost, through the public domestic waste stream funded by other residents, especially when all other businesses are expected to pay either the local Council or a private contractor an additional fee for that privilege.  It is may seem to be a minor pragmatic issues but is precisely this type of clear, widespread and persistent breaches of reasonable and fair behaviour that is driving the demand for more rather than less legislative and regulatory action.  Areas like statutory registration of booming numbers of short-term lets is a similar area where justifiable concerns are driving demands for appropriate checks and balances. As alluded to earlier, whether to regulate where regulation might be justified, or whether to stand clear and allow the market and voluntary industry guidance to set standards is a bit of a hot political potatoes both within and between political parties.  It is also one area where a clear differentiation in the nature and style of policy approach between parties already exist and is more likely than not to develop further in the runup to the general election.

Finally, back to the here and now and the ongoing horrific events in Israel and Gaza which are rightly front and foremost in the news.  There is no immediate resolution insight and given the level of damage already done on and to both sides, the best we can hope for is that events do not now rapidly escalate out of control and draw the wider region and, by association, the rest of the world in to a major conflict of international consequence. Even if that nightmare scenario is avoided the current conflict will now drag on for month if not years in some significant form and in doing so it will almost certainly have much wider political and economic impacts, from which the UK will not be immune. 

The new situation in the Middle East could also alarming serve to mask the dreadful truth that the Ukrainian conflict is still no nearer resolution either.  The hope for a successful summer campaign to retake territory seized by Russia has founder on conventional lines of defence in depth which has soaked up large parts of Ukraine’s finite manpower and limited military hardware. Russia shows no sign of withdrawing and has both the stubbornness and capability to fight a long, protracted war in the hope that either Western support or Ukrainian resolve will wear thin enough for Russia to retain seized territories or take control of the whole of Ukraine either by future military action, political manoeuvre or a combination of both.  While this war persists, so will the economic pressures induced and felt elsewhere, including within the UK.

What has distant conflict got to do with domestic tourism in the UK?  Nothing directly but indirectly it means it is highly unlike that all the external pressures on the UK’s economy and on the cost-of-living crisis, especial costs associated with energy, are not going to improve dramatically before or within 2024 and potential well beyond that.  On that basis the domestic industry should at best be anticipating similar pressure in 2024 on “the average household” and save hopefully for the indifferent summer weather, plan for very similarly challenging prospects for domestic tourism as those experienced during 2023. 

As ever I would be delighted to be proved entirely wrong, indeed I pray for it. And for those like me who are desperate for good news, I do truly look forward to a return to the good times when I can report on nothing but positive prospects and improving conditions.  Perhaps a new or refreshed Government, of whatever colour that might proves to be, will be the catalyst for a rapid return to a new positive phase?  Let us hope so.