The Environment Agency says the company is in breach of its permits at five sites in England which deal with clinical waste and a criminal investigation has been launched.
Healthcare Environment Services Ltd was hit with a series of warnings and enforcement notices giving the firm deadlines by which the waste must be incinerated by.
The Department of Health and Social Care (DHSC) is leading on the government response whilst the EA is taking enforcement action against the operator.
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The contractor, Healthcare Environmental Services, is required to remove medical waste, however in this case, waste of a significant number was not completely removed from hospitals in England and Scotland.
Healthcare Environmental Services Ltd has been found by the Environment Agency to be in breach of permits at five sites which handle clinical waste. A criminal investigation has been launched.
Healthcare Environmental Services has a transfer station for waste in Dundee and a storage, processing and incineration site at Shotts.
The Environment Agency has taken a range of action with the company to bring their sites back into compliance but they have repeatedly breached permits and continued to operate unlawfully. While it has been affirmed that the waste was stored safely and there was no risk to the public, affected NHS trusts may have to temporarily store their own waste on site as part of a contingency plan for which the government has allocated an emergency fund of £1 million.
He added: "There is absolutely no risk to the health of patients or the wider public".
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'Our priority is to prevent disruption to the NHS and other vital public services and work is under way to ensure organisations can continue to dispose of their waste safely and efficiently'.
"There have been no reports of any impact on these services from NHS Boards".
Buckinghamshire NHS Trust (BHT) confirmed today it holds a contract with HES, and contingency arrangements have been put in place in case the company can not continue to carry out the service.
HES, which made a £15.4m profit previous year, claims that the UK's "ageing incinerators and strict disposal policies" make it impossible to keep up with demand, leading to a "signifiant amount of excess waste being stored at its sites", The Independent says.
A spokesman added: "This is down to the ageing infrastructure, prolonged breakdowns and the reliance on zero waste to landfill policies, taking up the limited high-temperature incineration capacity in the market".
In a statement the company said: "Healthcare Environmental has been in discussion with the environmental regulators and has consistently highlighted these issues, whilst we have maintained service to all our clients". One site held 350 tonnes of waste, five times its 70-tonne limit. Incinerator shutdowns do occur for maintenance, but this is mostly planned and companies should have contingency plans in place.
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