Here Argus reader Peter Bartram writes on how Brighton and Hove's rubbish collection service could work in the future.

After a year's disruption, Brighton and Hove's bin men are calling regularly again.

The council is running the service itself and starting a "best value" review of how to manage it in future.

Its contract with Sita and its brush with Serviceteam have left it bruised. It mustn't make the same mistakes the third time around.

The council says it will look at different models for managing waste collection and street cleaning. One option that ought to be considered is to let the bin men run the service themselves.

The biggest problem with that is how they could finance a company to compete with commercial waste contractors in a competitive bid for the business.

Venture capitalists would probably be wary of the risk of funding a company specifically to take on one contract.

Especially with Brighton and Hove's history.

Even if investors provided cash, they would want to take such a high proportion of the shares, the bin men themselves would be left with too small a stake to provide a real incentive.

But there might be a way round the problem that could give the city a waste collection and street cleaning service that would rank among the best in the country. And at an acceptable price.

The bin men would raise the finance to launch their company by issuing shares to themselves. The purpose of the share issue would be to provide capital to bid for the contract - so there would be a risk if they didn't win.

But that risk would be limited. Given the amount of knowledge about the operation they already have, they could probably make a convincing bid for about £50,000.

Each of the 300 bin men would need to contribute about £166 to raise that. Their union, the GMB, might even want to underwrite some of the risk.

If they won the contract, they would then need to raise a larger amount of money to finance set-up costs, working capital and to hire management. They could do that by issuing fixed interest bonds secured against the revenue from the contract.

They would need to show they could definitely raise this money when they bid for the contract. So they would have to invite legally binding applications for the bonds on a contingent basis. The bonds would only be issued if the contract was won and would pay a competitive rate of interest.

There are private sector precedents for securing borrowing against reliable revenue streams rather than assets. The approach is usually cheaper for tax payers than Private Finance Initiative-type projects. The investors' risk is limited to a total default on the contract and normal movements in the bond market.

There is no reason why commercial investors shouldn't want to get involved if the interest rate is pitched attractively.

But it would be good to have a city-wide bond offer so Brighton and Hove people could finance their own refuse service - and make money out of it.

Any contract with a third-party, whether the existing bin men or outside suppliers, would have to be underpinned by a tough service level agreement to protect the interests of customers.

To make it bite, wherever possible penalties should be payable to end-customers - the residents - rather than the council. For example, a householder should receive £5 compensation if a bin is not emptied on the right day, subject to terms and conditions.

The contractor would pay a fine into a community fund if a rubbish black spot wasn't cleaned up on time. The fund could be spent on more clean-up operations such as litter bins or graffiti scrubbing.

Setting up the city's waste collection like this puts more of the right incentives in place to provide a first-class service than running it as an in-house operation or through a normal commercial contractor.

The council retains an experienced team of workers running waste collection and street cleaning. The existing bin men know the territory and the problems collecting rubbish in narrow streets and from multi-occupancies.

Council-tax payers get a service at a fair price because the contract will have been let as part of a competitive tender.

Residents will act as more attentive watchdogs than council officials on the service-level agreement because they benefit directly from compensation payments. That should ensure there is no corner-cutting in running the contract.

There are fewer labour relations disputes because the bin men own their own company. There is less friction over annual wage settlements as the workers can see what their own firm can afford to pay.

The bin men also get the incentive to provide the best possible service. If they run the operation smarter they should be able to pay themselves a dividend from their company's profits at the end of the year. Besides, they will want to win the contract next time around.

There is no reason why they shouldn't generate extra revenue by offering special waste collection or recycling services to residents and businesses.

Modern companies create value by building up their know-how. Perhaps when they've got the city rubbish collection and street cleaning running smoothly, the bin men could even sell their expertise to towns with similar problems.

Of course, the bin men would have to want to do it this way. But their spokesmen have been telling us during the past year's disputes than they could run the service better.

Binmen millionaires? Probably not - but why not? After an unhappy experience and a false start, the solution to Brighton and Hove's waste collection problems could lie closer to home than we think.