Moves to establish a new company to operate Liverpool’s waste collection and recycling services are set to take a major step forward.

In July the cabinet agreed to establish a Local Authority Trading Company (Latco) to deliver the service, as a way of cutting costs by an estimated £1m a year and achieve a 55% recycling rate by 2020.

Now the cabinet is being recommended that the council acquire the shares of the joint venture company Enterprise Liverpool Ltd (ELL) and its existing fleet as being the quickest and most economical way of establishing a Latco.

The Latco would also include the contracts for the grounds maintenance service.

Enterprise Liverpool Limited (ELL) is a joint venture between the city council and Amey plc, of which the Council currently holds a 20% share. Its contract for refuse collection was awarded in 2008 for seven years and ends in November.

The existing workforce, with the support of the Unions, put forward the proposal for a Latco arguing that it will allow the Council more flexibility in the service to improve performance and reduce costs.

The report allows the acquisition of the 80% of the shares from Amey creating a legal framework for the LATCO and purchase from Amey of the existing vehicles used to deliver the service: six trade waste vehicles and 36 bin wagons. The report also authorises the lease of the company’s base of operations to allow the service to continue without disruption.

Councillor Steve Munby, Cabinet Member for Neighbourhoods, said:

“Our overriding aim is to ensure that the city’s residents have a top quality service, a high performing refuse and recycling collection service.

“We now have the opportunity to introduce a service that the workforce and Council believe in, one that works together. The new proposed service arrangements will support us in reaching our aspirations and our recycling target.

“These legal agreements allow us to move to the new company in a quick and efficient way. We are confident that the changes we have agreed with the workforce will deliver savings of £1 million a year in running costs and help us reach our recycling target of 55% by 2020.

“The icing on the cake is that we will bring the Grounds Maintenance contract into the LATCO three years before the contract would have finished. This is costing us £3 million a year at present and I believe there is scope for considerable savings.”

The new contract, which covers 216,000 properties, comes into operation on 7th November.

The recommendation will be considered by the cabinet on 30th October.