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The rising cost of skip hire in the UK

The rising cost of skip hire in the UK
We explore the rising costs of skip hire in the UK and what this means for businesses and homeowners.
With rapid population growth, urbanisation and rising living standards, waste management has become a significant global issue over the years. Therefore, the need to find viable waste management solutions that can reduce the negative impact on the environment and create a more sustainable future for everyone is greater than ever. As a result, a growing number of organisations and individuals have been resorting to skip hire services to help them dispose of waste ethically and in an environmentally friendly way.
Skip hire companies have been doing the heavy lifting in the waste management industry for years and continue to make a positive difference in terms of environmental protection as most of them are committed to eco-friendly waste disposal. Unfortunately, the costs of skip hire in the UK have been rising recently due to a series of factors, and that can spell trouble for both businesses and homeowners.
Paul Bennett, Director of Reliable Skip, a national skip hire company in the UK, stated: "Since April 2022, there has been a sharp increase in the cost of hiring a skip. On average, there has been a staggering 10% rise in skip hire costs. The most significant reason for these increases is the stealth tax the Government has put on red diesel. The red diesel ban has resulted in fuel used to run large plant machinery to process waste instantly costing up to 5x more overnight."
It's therefore important to take a closer look at some of the most important factors influencing skip hire costs in the UK and what that means for skip hire companies and their clients. 

The energy crisis drives prices up across the board

The UK is currently in the middle of an energy crisis with numerous ramifications for domestic and industrial consumers. Gas and electricity prices have reached record levels in the UK in 2022, with energy bills soaring across the country and leading to a domino effect whose repercussions are still difficult to gauge.
According to the Office for National Statistics, electricity prices in the UK rose by 65.4% and gas prices by 128.9% in the 12 months to December 2022, fuelling persistent rises in inflation rates – a phenomenon that is likely to continue in the upcoming years. But while most of the focus has been on how the rising energy costs are impacting households, pensioners and those on low incomes, little has been said about how this affects businesses and organisations.
The hike in energy prices also translates into higher production and operational costs, so businesses in all industries, including the waste management sector, are significantly affected by these events. In order to keep up with the increase in energy costs, businesses are forced to grow prices for the goods/services they provide. And while prices for goods may have stabilised to some extent, service costs are still rising and keeping inflation rates high.

New red diesel rules

Another event with direct implications on skip hire costs is represented by the red diesel ban. On April 1st 2022 a new law came into effect, prohibiting many businesses, especially those operating in the commercial sector, from using and storing red diesel – also known as rebated fuel, gas oil, or tractor diesel – in vehicles, machinery and fuel tanks.
The change was deemed necessary in order to help the government reach climate change and air quality objectives, as part of the 2050 net-zero decarbonisation plan. Red diesel can only be used in very specific circumstances, as follows:
  • For vehicles and equipment used in agriculture, horticulture, fish farming and forestry
  • For passenger, freight or maintenance vehicles that run on rail tracks
  • For heating and electricity generation purposes in non-commercial spaces
  • For community amateur sports clubs and golf courses maintenance
  • For marine craft refuelling and operating in the UK
  • For machinery of travelling fairs and circuses
The rest of the businesses have a legal obligation to switch to white diesel, or they risk facing heavy fines. This has led to an increase in fuel costs by about 47p per litre for a large number of businesses and organisations. Since skip hire services don’t fall into any of the categories mentioned above, companies now have to spend more money on fuelling their vehicles. And while many believe this to be a problem for businesses only, consumers are also directly affected as the increase in fuel costs is reflected in the price of services.  

Landfill tax changes

Landfill taxes have increased over the years, keeping up with the demands and requirements imposed by the government. In 2012, the HMRC changed the rules governing landfill tax, with trommel fines, grits and screenings no longer being eligible for the lower £2.50 per tonne rate of landfill tax applied to inactive waste, and the full rate of £64.00 being charged per tonne.
By increasing landfill taxes, and making this option increasingly more expensive, the government intends to encourage councils and companies to focus more on sustainability and improve their waste management practices. The intention is commendable in theory, as reducing the amount of waste that ends up in landfill can pave the way to a greener future.
However, it’s consumers that have to pay the price for these changes as skip hire companies have no other choice but to increase costs for their services, given that it’s more expensive to dispose of waste in landfill sites. The fact that many landfill sites are closing because their capacity has been exceeded is also adding fuel to the problem. As a direct consequence, construction companies also pass skip prices onto their clients, and that means renovation and home improvement projects are getting costlier.
But despite the rising costs of skip hire in the UK, it’s still possible to find cost-effective waste disposal services. Choosing the right size skip, opting for a local skip hire company and doing a bit of research before booking a skip service can go a long way in finding a convenient and budget-friendly waste management option.

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