The price of salt
For the past few days local councils across the country have been gritting their roads with rock salt to help traffic cope with the snow. But a BBC investigation using FOI shows that these councils are paying widely varying amounts for the salt they use - and this raises important questions about value for money in public procurement.
Earlier in the year we sent local authorities freedom of information requests for details of their most recent contract for road salt, including the price paid. The table below gives data we received from councils about pricing and their supplier.
The rock salt market in the UK is largely dominated by just two companies, Salt Union, with a mine in Cheshire, and Cleveland Potash, which mines in Teesside. Some councils are supplied by a third firm, Irish Salt Mining and Exploration, based near Carrickfergus in Northern Ireland. A few others get stocks from Peacock Salt, an importer and trader which does not mine salt itself.
Several caveats are necessary: the contracts vary in size; they have been agreed at different times and they last for different periods; the price may vary during the course of the contract, eg purchases in summer may be cheaper than in winter (this is why some councils give a range); and there is the important factor of transport costs.
The information we obtained only covers some councils for a variety of reasons. About 50 local authorities refused to disclose the data on grounds of commercial confidentiality (although a few others who did this initially relented when we appealed). Some reported that they had consulted their supplier who had requested secrecy.
Some councils do not buy salt directly but instead employ outside contractors to provide a winter maintenance service for their roads which includes gritting. Others told us simply that the price varied, while some failed to respond altogether.
Nevertheless it is clear even from this partial and possibly unrepresentative sample that there is great variation in what different councils are paying. The rock salt market should be a good basis for exploring value for money in public procurement, since it is a comparatively simple product purchased from few suppliers by many councils and used in essentially the same way.
David Sparks from the Local Government Association, which represents councils, commented:
"It is utterly understandable that the prices councils pay for salt should vary. Prices will go up and down throughout the year. Where land is cheap, councils may decide that it is best to buy salt when prices are low and stockpile it. In other areas, the cost of land for stockpiling salt might be too expensive or the council might decide it is better to do other things with the land. In those circumstances, councils will make other arrangements to ensure they have access to enough salt. Councils know their area and the likely weather conditions and decide how much salt to hold accordingly."
The salt suppliers emphasise the role played by haulage costs. A spokesman for Salt Union told me:
""The price of salt is affected by several variables of which the cost of delivery is the most significant. It is a high bulk commodity and the cost of shipping inevitably increases depending upon distance from our mine in Cheshire. Also salt for gritting is not a single product and some of our customers opt to pay more for variations that offer specific benefits. The other factor that influences price is, of course, the volume ordered and the length and specifications of individual contracts."
Howard Clark, the sales manager at Cleveland Potash, said:
"Transport is the main element in the differences in our pricing. We don't talk about our prices. We consider that to be private to our customers."
I also asked some of the councils paying a high rate per tonne for their explanations. Mark McCartney, highways depot manager at Wigan, said:
"Wigan has a different contract to many neighbouring councils and, unlike a number of other authorities, does not anticipate an above inflation increase. The terms of the contract we have enabled us to receive a very efficient turnaround of supplies indeed at busy times. Last winter this enabled Wigan Council to have a full stock of grit and indeed let other councils use it to replenish their own stocks."
Staffordshire responded: "We have gone through a tendering process and this contract came out as the most reasonably priced". Oxford explained that it only bought a small quantity compared to other councils and that its last purchase had been cheaper than the data supplied for the FOI reply. Torbay failed to respond to a request for comment.
Another striking discrepancy revealed by this survey was the wide difference in the level of openness adopted by responding councils, ranging from those which promptly provided all the material requested without any apparent reluctance to others which adamantly insisted that it was firmly against the public interest to release equivalent information.
One council which refused to provide the price data as commercially sensitive was Somerset. It did tell us how many tonnes it had bought, adding "using market prices you should be able to estimate ball-park costs, and if you have full disclosure from other authorities you should be better placed than us to make such estimates."
There is something strange about journalists who have never purchased a tonne of salt being told they have a better knowledge of market prices than councils which buy large quantities of the stuff. It raises the question of whether councils could and should do more to exchange information with each other to achieve better value for money, when operating in a market with very few suppliers who are therefore well-informed about what many customers are paying.
UPDATE, 22 December, 08:45: Torbay council have now told me:
"Torbay has a mild climate and so Torbay Council only needs to purchase small quantities of road salt compared with other councils. Small amounts generally cost more per tonne. Torbay Council also buys more expensive rock salt which has a special additive called Safecote. This spreads more easily, is better at sticking to the road and doesn't cause as much corrosion to vehicles."
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Even by the standard of this blog this is dire: you're comparing councils like Doncaster (a small town in S. Yorks) to Argyll & Bute which covers half the west highlands & islands. Of course they're going to be buying vastly different amounts of salt and its fairly obvious that a buyer making regular huge purchases of a commodity should be able to get a better price than someone making smaller and irregular purchases.
Can we have a freedom of information request asking two things: how much of our licence fee is spent requesting and compiling such nonsensical blogs and how much has our council tax been billed responding to them?
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Wouldn't mind but councils dont even provide grit bins anymore so that residents can at least help.My road is like one big skating rink cars are either skidding or cant even get over the road humps.This road is a main artery between 2 main roadsconnecting them up, both lead to junction 11 of the M.4 motorway.We also have a primary school just on one end of our road.Time over time this happens it never used to so why now?the weather is no more severe.What ever happened to buses and ambulances haveing snow chains they used to more cut tight fisted cut backs ,well the councils will lose out when people with broken limbs make a compensation claim.
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I can understand suppliers not wanting to talk about prices but councils refusing to reveal how they spend 'our' money starts to look like collusion. This kind of competition seems likely to benefit the supplier rather than the customer. Could you imagine going in to a supermarket where nothing is marked with a price because a different rate is negotiated with each customer?
I agree with Peter_Sym (#1) however that the table doesn't tell me a lot and was, quite homestly, a waste of public money to compile.
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There is more similarity between Argyl&Bute and Doncaster than you think. Doncaster is not just a little town in Yorkshire. It's a metropolitan district and covers 568 sq km and is ranked 81st in size with other areas. Argyl&Bute is bigger (ranked 2nd with 6909 sq km) but also less populated by far. It only has 90,500 whilst Doncaster 291,600.
Having said that, it is true that all the councils have different needs for salt so there will be some difference in price. The south less so than the north. More populated ones requiring more than less populated. Larger requiring more than small councils. All leading to varying prices. I think there shouldn't be any surprise that there is a difference in price. What does need looking at is the distance factor. Is it the case that transport cost is a major factor. From the price that north eastern councils get from Cleveland Potash compared to the price Torbay pays it seems that this is the case.
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It beggars belief that even those crass town hall dunderheads employed in local government have not ganged together into a national buying consortium, or at least into regional constortiums to negotiate standardised salt prices.
O.K. the cost of transporting it will vary, but the base price of a tonne of salt should be the same and would probably be lower if they used their buying power by ganging together.
Hell, many of them do it for stationery products and copier paper and the like, why not for rock salt?
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#4 I was born in East Dumbartonshire and my wifes family are from Doncaster (its why I chose those two specifically). One is a huge rural area with a sparse population and prone to bad winter weather (the road across Rannoch Moor where I used to camp has orange barriers to close it when it snows) with long A class roads used by relatively few cars whereas the other is a metropolitan, low lying area with many urban roads. What the total salt useage for each is I can but guess but my point was that this blog is comparing completely different types of council as if they were in some way comparable.
Its also worth pointing out that about 15 years ago the roads dept in Doncaster was subject to a fairly big corruption scandal (I've learnt the hard way that printing the truth on these sites seems to be considered 'libel' by the BBC so if you're interested you'll have to google) so it wouldn't suprise me if there was some 'funny business' going on with their salt procurement and spreading. There's been some potholes in my in laws street not filled for 6 years. Its not an impressive local authority yet it does find cash for 2 majors!
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Your fellow scribes at "more or less" would have a field day with such a lazy set of data!
In order to make the comparison fair and just off the top of my head.
Divide by the length of roads gritted.
Total tonnage bought?
Distance to supplier?
If you buy in a huge quantity in the spring , it has to be stored and looked after.Are these costs factored in?
I applaud the idea that procurement should be transparent and keep up the good work in bringing the issues to light but be careful with using the figures to prove something else.
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The 'house rules' on these blogs get more ridiculous by the day. I make a very veiled reference to 'Donnygate' a scandal that severely affected the roads dept at Doncaster council and which the BBC have a link to http://news.bbc.co.uk/1/hi/england/2882633.stm
and my comment gets pulled. These people WERE jailed. It happened. Under english law the truth is not libel.
Is there any other scandals I'm not allowed to mention? Better not say anything about Watergate in case I libel Nixon. Given the abuse and lies that get published about Brown/Blair/Bush on HYS its getting beyond a joke.
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Stockton on Tees may have one of the lowest prices for salt - but they don't believe in putting it on the roads!
24 hours after Saturday's snowfall I had to drive to Stockton from Bishop Auckland. Instead of 20 minutes it took more than an hour!
(And this was after being stuck in Wolsingham for 7 hours on Saturday waiting for gritters to do the A689)
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I totally disagree with comment #1. Sure the information is inconclusive, but at least it asks some questions about how the country is run, rather than the usual meaningless stories about celebrities and politicians and how a study of 30 people showed that eating lettuce cures cancer.
For example Birmingham pays about 25 pound a tonne, and Telford pays about 30 pound a tonne, even though they buy from the same company and despite the fact they're close to each other, so you can't really blame transport costs (if anything Telford is closer to Cheshire than Birmingham).
So lets assume for example this costs Telford an extra million pound of public money. Is this due to an unavoidable economic variation in the cost of a commodity, or is it just due to the laziness and/or incompetence of a highly paid council official? Is there any element of corruption?
The story doesn't answer this, but it's a good question. OK Birmingham is a big city and probably buys a lot more salt than Telford - that sounds reasonable, but is it? Doesn't Telford still buy enough salt to get the best price? It's not like the price of oil varies depending on whether you buy a million barrels or a hundred thousand. Are we just being fed bull by our public servants? Does it really matter if one council pays 25 pound and another pays 30 pound, this variation is pretty small compared to some things - as long as the system works why upset the apple cart? Could unemployed people do a better job?
All good questions. Especially if the same sort of issues exist in many areas of public spending, you could be talking about billions of pounds.
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Interesting to read that the "cost of delivery is most significant" factor affecting price.
Even with other factors considered then, it seems baffling that:
a) Suffolk, at least 150 miles from the source, manages to achieve such a good price.
b) York, a mere 60 miles or so from source, pays around 25% more.
Would it make more sense for the government to take advantage of an economy of scale and buy it on behalf of all councils?
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Oliver, that's a daft idea. No government would be able to organise this so that the councils would get their grit, and anyway they'd start blaming each other when the rock salt didn't arrive.
A real economy of scale would be if all these companies merged or even were bought up by the government, but there'd probably be EU regulations against that.
Another factor not mentioned in the article is that during heatwaves salt can also be used to stop roads melting. So it's very hard to calculate how much salt a council would need for the year.
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John, if these companies merged, it would be a step toward monopoly, and unlikely to improve the economy of scale benefit to the councils and therefore ultimately, to the taxpayer. Chances are, price would go up, not down as one company is the only provider of what is an inelastic good.
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Interesting stats, Martin. But the most revealing element is the comment from Somerset that, having got the data from other authorities, "you should be better placed than us to make such estimates".
The standard government response to something like this would be to set up joint procurement. Generally in a way so complex and bureacratic that it ends up making the item more expensive for most.
But how about transparency instead: Set up a web site, for salt purchase and all other products, where local authorities detail what they've paid and what the terms are. Then anybody doing procurement can look up recent deals and use those in their negotiations. Just like we all do when we are buying a new camera or insurance or pretty much anything.
Then even Somerset will know what everybody else is paying.
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Thanks to everyone for the interesting comments so far. A number of you have pointed out reasons why the data from different councils may not be directly comparable. I'm certainly aware of this, which is why I myself pointed out several caveats in the text above.
It's also why I resisted the normal journalistic temptation to list the councils in some kind of league table based on amount paid, because I didn't think that would be an entirely fair comparison.
I'm not claiming that the figures we obtained show for sure which councils are over-paying and which have driven a hard bargain. I do think they are worth discussing and raise questions - questions of the kind that have been amplified in comments 10, 11 and 14. This information is not the conclusion to a debate, but it could be the start of one.
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A good article, as the gritting of roads and pavements varies enormously across the UK. I believe that it used to be a statutory obligation for the councils to grit a minimum number of roads/pavements etc but this now has become discretionary? I have lived in Scotland and England and have seen this variation at first hand.
Haddington is a small market town 20 miles of Edinburgh and until recently (and maybe still does as I have not been there of late) took it's gritting responsibilities seriously ie main and small roads and pavements were gritted within 24 hours of a snowfall. Most other towns are content to keep only main roads clear disregarding minor roads and pavements.
The storage issue is important for some council given the land available. But equally why cannot councils share storage sites with the Highways agency? It would not be too difficult to control how much councils and HA uses and apportion costs accordingly. I do not understand the culture of inflexibility that has arisen in central and local government - after all a central plank of the current government is partnership across all sectors. Other areas for possible storage sites include various MOD installations used or unused (a fair number in the home counties too).
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Doncaster will be much more compact than Argyll & Bute with perhaps a small number of large depots which can be supplied by rail. Argyll & Bute is a much larger area which which might need deliveries to a lot of different locations including islands. I think they have some, if not all, delivered by ship.
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In Reading, a town surrounded by hills in which the districts Caversham, Tilehurst and Woodley are situated, we used to have yellow containers by the roadside which held 'Do Your Own' salt. As gritting lorries can't get to the hills and slopes very easily, us locals got out with a spade and so had our roads passable.
But these containers have all disappeared. Where have they gone ? And why ?
Have they disappeared in other areas ? Is this a Health and Safety problem ?
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Martin:
Yes, there is always more reasons for the price of salt...And, not only the ususal rationale...
=Dennis Junior=
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What a sorry and flippant use of the FOI for nothing more than journalistic whimsy. Employees in councils all over England sent scurrying around to dig out data simply because it takes your fancy, a fancy backed by the law of course. You might think your request a minor one but it may well be one of many nuisance requests - as an NHS employee I can sometimes spend much of a day extracting data following similar enquiries. Taxpayers money wasted again.
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So what's the point of this? Small councils use less salt than big ones so don't get a discount for larger quantities? Or that councils hundreds of miles from the salt mines have to pay more because - oddly enough - there's a cost associated with shifting many tonnes of salt from one place to another?
We might even conclude that small councils hundreds of miles from a salt mine might even get to pay doubly more - because they shift salt a long way but without being able to get discounts for large quantities?
We ought to have some kind of combined Einstein/Sherlock award for journalism of such staggering quality.
Can we have a list of the councils that didn't waste taxpayers' money on providing such utterly useless information?
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Now that it has been revealed that there was insufficient stockpiling by some councils, and that the government has taken control of distribution, this story seems to take a new angle - who will pay for the grit and at what price?
it would be interesting also to know how the routes are chosen to grit - my parents house in south west Scotland is not on an A, B or C road, it is not on a bus route nor near a school/fire station/ambulance/police station/... (though is up a hill) yet on new years eve the gritter passed their home at least 3 times (surely that cant be to keep the golf course open ?)- I live in the east mids and know a school up a hill that hasnt seen a gritter in 5 years - not surprisingly it has been shut much of the last week.
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Before this winter arrives lets hope the country as a whole is better prepared than last year. Working for a company that supply grit bins and rock salt we had many people buying our products because public provided salt supplies were not sufficient.
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We're already noticing people are buying their grit bins for the winter already, looks like people are preparing better for the 2010 winter
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