IT Recycling

Tuesday 5th March 2013 Westminster Hall

16:30

[Mr Aidan Burley (Cannock Chase) (Con)]

Thank you, Mr Weir, for calling me to speak. It is an absolute pleasure to serve under your chairmanship this afternoon. I also thank the Minister for turning up. Our last encounter in an Adjournment debate was on the rather more controversial issue of trade union reform. I can assure him that although this afternoon’s debate may be slightly less spicy, the topic that we are discussing will nevertheless be just as important.

I was prompted to apply for this debate after recently attending the opening of a new IT recycling facility in my constituency by a company called PRM Green Technologies. As a declaration of interest, I am delighted to say that several of the company’s directors have travelled down from Cannock to Westminster to be here for this debate this afternoon. I am very happy to see Richard Manning, Paul Mallet and Tim Hawkins sitting in the Gallery. If I get any of the IT detail wrong, no doubt they will intervene on me from a sedentary position.

[Mr Mike Weir (in the Chair)]

No, they will not.

[Mr Burley]

Well, perhaps not.

What I learned from my recent visit to PRM Green Technologies was very interesting. Here was a local firm exhibiting strong and sustained growth, and providing much-needed jobs for local people; in fact, it recruited especially from the disadvantaged and long-term unemployed. Yet it appears to be deliberately operating at a competitive disadvantage, because it has long been the IT recycling industry’s standard to charge end users and organisations, including public bodies such as schools and hospitals, to dispose of all their old, unwanted and end-of-life IT equipment. However, PRM offers that service for free while remaining a profitable business.

Whenever an organisation has finished using its IT equipment—whether that equipment is computers, laptops or other hardware—and wants to get rid of it securely, which is an important issue that I will come on to in a minute, the accepted practice is to pay a firm to collect the equipment and take it away. There are sensible reasons for doing so, because a company is paying not only for its items of IT equipment to be collected as people might pay to have household waste collected but for a service whereby the data left on them will be wiped and they will be securely recycled. That is especially important if there is sensitive material on the equipment, as might be the case if the computer had been used in a hospital to store medical files, by the police for criminal records or by a school or care home to store data on vulnerable children. The last thing that we want is British police computer data ending up for sale on second-hand computers in Iraq, as has happened recently.

However, PRM Green Technologies in Cannock offers all those services—the collection, the secure recycling and the data wiping—for free, and does so at a national level. Its business model does not charge the service user a single penny to recycle their redundant and end-of-life or damaged IT equipment. As I learned on my visit, the company already has more than 4,000 customers, who enjoy a service that is completely—100%—free of charge.

Why is all this important, and why have I secured the debate? Well, I have a simple question this afternoon: if this service is available for free, to nationally agreed standards of data cleansing, why would any organisation—public or private—pay for the same service? If we think about it, this process has the potential to be incredibly important for the public sector as a whole, which, as we know, is already struggling to deal with budget reductions in this age of austerity. If a school spends money on paying to have its old IT equipment recycled, that money cannot be spent on teachers, sports facilities or a new playground. If an NHS trust spends money on paying to have its old IT equipment recycled, that money cannot be spent on doctors, nurses or medicine, and if a council spends money on paying to have its old IT equipment recycled, that money cannot be spent on libraries, leisure facilities or resurfacing roads, which are services that we know all our constituents rely on and prioritise.

Let me give just one example. Many of PRM’s customers are education providers, such as schools, colleges and universities. The company calculates that it alone has saved the education sector in excess of £5 million, which is the same amount of money that could have employed a total of 237 teachers. Just imagine what that could mean if the system were rolled out nationally? If a small company from Cannock, with 28 employees, can effectively pay the salaries of 237 teachers, how many more teachers could be provided nationally if school budgets were better managed? This one firm also has 17 local authorities on its books, as well as three NHS health care trusts. Again, think of how many council staff or medical professionals could be employed if all the other local authorities or health care trusts in the UK did not waste their budgets on paying to have their old IT equipment recycled.

I have a number of questions for the Minister. First, what can the Government do to make public bodies aware that there are companies—not just PRM in my constituency but other companies—that will absorb all the costs of recycling all of their old IT equipment? Secondly, what can we do to ensure that public bodies do not waste their budgets on IT recycling and instead spend every penny on the front line? Thirdly, will he start the process with his own Department and write to me to say whether the Cabinet Office spends any of its departmental budget on disposing of its old computers? Finally, will his Department write to the other Whitehall Departments to ask similar questions of them?

I ask those questions now because if so many organisations, bodies and individuals can already see the benefit of using PRM—not only once, but time and again—why are more sections of society, industry and Government not waking up to the fact that, even in these austere times, there are companies run by individuals such as those sitting in the Gallery today that will charge nothing for IT recycling? If they did wake up to that fact, they could—indeed, would—make a difference to their organisation’s ability to serve the public.

Having said that, we need to go slightly further. We must ask ourselves what challenges, real or perceived, prevent Departments or larger parts of the civil service from availing themselves of such a service provision for no cost whatever, and therefore from providing far greater value for money for the taxpayer?

After talking to PRM when I visited its facility, I learned that the biggest issue regarding Government assets would appear to be security. The feedback that PRM receives is that the possibility of events such as data being lost, assets going untracked and personnel entering sites without the correct checks being in place presents great concerns.

People might ask, “Are companies that perform this service for free actually capable of providing the level of data security required, and yet still maintaining zero costs?” To do so, all of a company’s staff would need to be vetted to BS7858 standards. Its premises would need to protected by several layers of physical security, including two external rings of steel, 24-hour security guards, CCTV monitoring 24 hours a day, monitored alarm systems, internal access control and interior steel cages that are protected 24 hours a day. All that security is needed to ensure that the data remain secure once they have been collected from an organisation and before they are deleted and wiped. A company would need to destroy data assets using Government-approved software and devices, as well as special shredding techniques. Its vehicles would need to be fully liveried, satellite-tracked and have CCTV on board, to further protect the assets that the company carries on behalf of its service users. Surely a company cannot do all of that without charging its customers. Well, companies can and do. PRM does all that, and other companies around the country do it too. Quite simply, there is no catch. And if PRM and other companies can do that, concerns about data security need not be valid and need not be a reason to continue with existing paid-for IT collection contracts.

How does PRM manage to offer such a service? It does so because it extracts every little bit of residual value from every kilogram of every item that it collects and processes, and because it has chosen to model its business in this way it ensures that it extracts maximum value from IT equipment, therefore guaranteeing minimum waste and landfill. If a company has to absorb its own collection costs, not least the petrol and the vans, let alone the infrastructure that I have described, it makes sure that it extracts every bit of residual value from every kilogram of every item of IT equipment it collects, because it has to.

However, here is the depressing bit. Although companies such as PRM Green Technologies can offer that service, increasingly Departments and the NHS are unable to respond to its unique offer. In initial contacts, PRM often talks directly to the responsible IT department or the finance department, but often it finds that current contracts blanket-cover all aspects of a service, otherwise known as the dreaded outsourcing, or facilities management. By way of a total tangent, these are the same sort of all-inclusive outsourced contracts that led to the TV chef, James Martin, discovering that Welsh hospitals could not buy Welsh lamb to serve to their patients, because their outsourced contractor bought all its lamb from New Zealand, even though lambs were literally grazing on fields outside the hospital and local farmers could charge almost 50% less than the New Zealand imports. I digress, and that is a debate for another time, but the point is valid. Even if a Department wanted to be involved, it is often tied into a cost-making exercise.

Senior people in a Department or buyers in councils are often surprised that this free service even exists. What should be most shocking of all to the Minister is that often, their tendering model cannot cope with assessing tenders that have a negative or zero value in the calculation. Perhaps the Minister will think about that for a second: because councils cannot conceive of not paying for the service, the computer says no. That being so, we must examine the charges that are incurred across every part of Government and question the structure of contracts. Those charges appear to be part of much larger and more complex contracts of service provision, which we need to investigate to render them more transparent for the public good.

What can be done to ensure better procurement of goods and services throughout the public sector, allowing schools, hospitals, police forces and councils to avail themselves of a free IT recycling service? Perhaps we as a society need to rethink our negative attitudes to people who offer something for nothing. In this instance, that should not apply, because as I have already explained there is always residual value in IT equipment, which all providers need to ensure that their commercial model is viable. In short, even companies that are paid to collect unwanted computer equipment still need to be able to sell them on or break them down for parts to be a viable, profitable business. The difference is that some companies, such as PRM, have the social conscience not to skim extra cream off the top.

All that the organisations need to know, whether police forces, councils, hospitals, or businesses, is one thing: where are their assets going to end up? It makes more business sense for IT recycling providers to ensure that they can extract maximum value from assets without charge to the service user. If they get paid only for what they can repair, refurbish and resell, or recycle in full, it cannot be in their interest to dump or dispose of these items incorrectly, as they will not get a penny for any item dealt with in such a manner. With asset-tracking and reporting systems in place, the customer can be further reassured of their good intentions.

There is no inherent greater security in a firm that charges to pick up IT equipment, and then recycles it and sells it on, than in a firm that picks it up for free before recycling it and selling it on. In fact, the reverse may be true. If a company is making a margin on picking up the goods, they arguably have less incentive to securely recycle them and squeeze out every penny of margin, as they already have some cash in the bank simply from collecting the items.

Perhaps the greatest problem presents itself when the very people tasked with ensuring that assets are disposed of correctly are poorly equipped, through no fault of their own, to make an informed decision about how to deal with that problem. For example, the head teacher of a primary school, who deals with the school’s entire IT assets and support, may receive little direction on how to approach the challenges of safe and correct disposal of IT equipment while ensuring value for money for their school. To that head teacher, paying for such a service might seem a sensible, industry-accepted practice, not least because they might never have heard of alternatives that could mean that they could pay for a new classroom extension, playground, or even computer room.

I do not know how to change those perceptions, but I know that the Minister, wearing his other hat, has responsibility for communicating the not entirely straightforward concept of the big society. In responding, perhaps he will draw on his communications experience, and the power, leverage and tentacles of his Department, in saying how we can change people’s perceptions. Once the benefits are fully realised, many further positives can flow, with public money being better directed to the front line rather than wasted in unnecessary ways.

Even though the waste electrical and electronic equipment directive, the European Community directive that requires all our electrical items to be registered and recycled safely, has placed the onus of the cost of recycling on the producers and importers of these items, that has not filtered down to many of the organisations previously mentioned. Despite computer companies having to adopt membership of approved compliance schemes and having to pay to offset the large tonnages of equipment that they place on the market every year, there are still just as many companies in existence that charge for the service that they provide.

Every electrical item has some degree of residual value, and with modern recycling techniques there is no reason why that value should not be returned in some measure. If a service provider, such as PRM, is prepared to speculate that the residual value in any goods collected will be greater than the overall costs of collecting and processing them, surely that must be to everybody’s advantage.

There is a moral case for public sector organisations to spend as many pennies as possible on their front line, rather than paying for redundant IT equipment to be taken away, and a financial case for spending more money on teachers, nurses, doctors and policemen, and less on IT waste recycling.

How do we make the decision makers in these organisations more accessible to the providers of these free services? How do we make them more aware of the alternative, cheaper options that exist? Should we compel them, by law if necessary, to use free providers, rather than pay for the equivalent service? What can we do about the outsourced contracts that I mentioned, which tie big organisations such as NHS trusts into schemes they cannot opt out of even when they see a better alternative? What can the Government do to help the public sector help itself in respect of bearing the costs of recycling old IT equipment?

Those are the questions for the Minister, who has a huge opportunity to make massive savings across the public sector at no cost to jobs by ensuring that no one spends a single penny to recycle their redundant and end-of-life or damaged IT equipment, and that people instead use firms such as PRM Green Technologies, which is a great example of a private sector firm acting in the best interests of the public sector, taxpayers and society as a whole.

16:49

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

Mr Weir, I am delighted that I did turn up, not least to serve again under your chairmanship, and to listen to a crackingly good speech by my hon. Friend the Member for Cannock Chase (Mr Burley). He is right. This debate is a lot calmer than the previous one he initiated on trade union reform, although not so well attended. However less spicy, he is entirely right. We are debating the fundamental question of how committed the Government are to getting best value for the taxpayer, because every £1 we save by driving greater efficiency in the procurement of goods and services is £1 we do not have to cut from something else and £1 we can invest in the front-line services that our constituents care about. That matters enormously.

I congratulate my hon. Friend both on securing this debate and on the way he made his case. As an excellent local MP, he is a great champion of local businesses. I extend my welcome to the directors of PRM Green Technologies, which seems to offer an excellent service, as is substantiated by its 4,000 clients and counting. The company is clearly working, and it is an example of a good British business that is coming up with new solutions and offering real value at a time when we need to challenge the system, which spends so many billions of pounds of our money, to be more efficient and effective.

As a Cabinet Office Minister, I felt genuine shock when I saw the attitude that we inherited to public money. We embarked on a process of doing straightforward, simple things to make Government procurement more efficient, and it is genuinely shocking that we are already delivering billions of pounds a year in savings to the taxpayer. That should not be possible, but it is, due to the previous Government’s attitude to public money.

The debate draws out the system’s attitude to risk and how good people are at buying things. Too often, and we are trying to break down this frustration, procurement seems to be too much about process and not enough about what we are buying and how we can get best value. There is too much risk aversion and too much emphasis on box-ticking. People are not asking, “What are we really buying? Do we really need to spend this money? Isn’t there a smarter way of doing this?” If there was ever a time to break down that culture, it is now, because of the pressure to be more efficient in how we use taxpayers’ money. That matters, because every £1 we save is £1 we can put to more productive use for the benefit of the people we serve.

The debate is also about the need to create the conditions to open up the system to smaller, more entrepreneurial, more creative and more dynamic organisations. There are such companies across the spectrum, in both the for-profit sector and the not-for-profit sector. There is a similar complaint about the difficulty of getting into a system that is geared to buy from the big, the safe and the very expensive, which we must try to break down.

I have several assurances to offer my hon. Friend. The first may sound a bit motherhood and apple pie, but I assure him that the Government support recycling IT equipment for both financial and sustainability benefits. I would expand on that if I had more time, but it is a point of principle that is worth asserting. Recycling IT equipment matters to us.

We are aware of the value of surplus and redundant IT equipment. Through proper recycling, the Government may not only dispose of redundant equipment at no cost but profit from the sale and reuse of the scarce and valuable resources that it contains. We are voracious in trying to get better value for the taxpayer, and we are working to ensure that as much of that value as possible is extracted and returned to Government.

I refer my hon. Friend to the “Greening Government: ICT Strategy,” which was published in October 2011—I am sure he keeps a copy by his bed—which sets out how Government information and communications technology, including its end-of-life reuse and recycling, will be made green. The strategy includes the adoption of a clear waste hierarchy in which surplus equipment is reused or refurbished to avoid the unnecessary procurement of new equipment, thus saving money and reducing waste. The strategy also includes the donation of surplus equipment to benefit big society initiatives—I am grateful to him for mentioning the big society—and the recycling and reuse of ICT equipment components and materials. The strategy clearly articulates the value of recycling redundant ICT equipment, and metrics are being introduced to ensure that it is done effectively across all Departments.

My hon. Friend asked what we were doing to ensure that public bodies did not waste their budgets on IT recycling but instead spent them on the front line. The Government Procurement Service offers public bodies a method for recycling ICT assets under the supported factories and businesses framework agreement, RM722. The agreement ensures that equipment is recycled responsibly and maximises the cash return from the extraction of valuable components and materials, which has seen limited but growing take-up since launch. In the financial year 2011-12, and in the current financial year to date, the agreement has been used by at least 33 bodies, including schools, councils, agencies and Departments, so it has made a decent start.

[Mr Burley]

I am grateful to the Minister for his bedtime reading recommendation.

IT recycling is an opportunity that will only get bigger as more IT equipment is bought and new ways of working progress into all parts of the public sector. He may be aware that some councils now have a policy that, when an employee leaves and a new employee takes on their role, the old employee’s laptop is not given to the new employee. The policy is that the old machine must be destroyed and that the new employee, even if they are doing the same job, must have a completely new laptop or desktop. The problem, therefore, is only going to get bigger, and the opportunity for saving the cost of recycling will be ever greater.

[Mr Hurd]

If we are ever to break down that culture, now is the time, because there is no organisation in the public sector, or arguably in the private sector, that is not thinking about how it can be more efficient and reduce unnecessary costs.

There is an awareness of the importance of IT recycling, and there is a public strategy to which we can be held accountable—the “Greening Government: ICT Strategy.” The GPS offers a support mechanism to public bodies that is beginning to be taken up.

The Cabinet Office is keen to show a lead—I will write to my hon. Friend on this—but our ICT services are provided by the Treasury under the public sector flex framework agreement as part of a fully managed shared ICT service. I am using this debate to poke at the issue and at the leadership we might be able to show.

If there was ever a time when we have an opportunity to change the culture and to instil much more efficiency and creativity, it is now, because of the financial pressures upon us. We also have a friend in the process, which is the Government’s commitment to much greater transparency on how public money is spent. Down to the last £500, the public and companies such as PRM will know and will be much freer to challenge the spending of local authorities. As we see leadership, and as we see more public sector organisations showing initiative in doing things better, there will be more information available about those that are not doing so. We in this place, and people outside, will therefore be much freer to challenge inefficiency and say, “You can do this more intelligently. Look, they have done it over there.” We have not had such information, and we are only just beginning to get proper information about the cost of IT recycling across Government. That is our inheritance, because previous Administrations did not care enough about the cost of IT recycling, and they did not care about efficiency. We are genuinely committed to changing all that.

Question put and agreed to.

16:59

Sitting adjourned.