Select Committee on Environment, Transport and Regional Affairs Memoranda


MEMORANDUM BY THE ENVIRONMENTAL TRUST SCHEME REGULATORY BODY (ENTRUST) (DSW 82)

INTRODUCTION

  1.  The Landfill Tax Credit Scheme (LFTCS) was introduced as part of the Landfill Tax Regulations on 1 October 1996. It applies to the whole of the UK. Provisions for the Scheme are covered in the Landfill Tax Regulations 1996 and, as amended, 1999. ENTRUST is the not-for-profit Regulatory Body appointed by HM Customs and Excise with the responsibility to regulate and administer the Scheme. The Credit Scheme enables funds to be used for a range of specified activities, including community improvements valuable for social benefits and sustainable development in the widest sense. Due to its private sector origin and distribution by Landfill Operators (LOs), Credit Scheme funds can be matched from public sources, some Environmental Bodies (EBs) achieving multiplying factors of six or more. Several illustrative projects are described for information.

  2.  ENTRUST's duties are principally the enrolment of organisations as EBs and the monitoring of their operational compliance with the requirements of the Regulations. The duties of the Regulator include:

    —  enrolment of Environmental Bodies;

    —  scrutiny of projects for compliance with the "approved objects";

    —  audit and monitoring of EBs' expenditure on the "approved objects";

    —  revocation of non-compliant EBs (six have been compulsorily revoked);

    —  promotion of the Credit Scheme;

    —  making recommendations to HM Customs and Excise for beneficial changes to the Scheme; and

    —  interpreting the Regulations.

  Further explanations and examples of the full range of LFTCS projects are given in attachments. It should be noted that the objectives of the Landfill Tax and the Landfill Tax Credit Scheme are different.

  3.  ENTRUST does not:

    —  receive LO contributions;

    —  allocate LO contributions;

    —  direct funds to projects;

    —  have discretion to alter the Regulations;

    —  make judgments about the quality of projects;

    —  make judgments about project value-for-money; and

    —  make judgments about EB efficiency.

  Similarly, the LFTCS is not the "ENTRUST Scheme", nor are LO/EB funds "ENTRUST funds".

  4.  The Sub-committee's Press Notice No 50 itemises seven bullet points for special attention and this submission addresses the following aspects:

    —  more efficient use of resources to reduce materials entering the waste stream;

    —  measures supporting increases in recycling, including product and market development;

    —  reduction of waste sent to landfill; and

    —  actions to educate the public about sustainable waste management.

  The submission provides information on the entire range of Credit Scheme activities, but concentrating on sustainable waste management data, including statistics on numbers and subjects of projects, expenditure totals and examples of projects implemented. The scope of the Sub-Committee's inquiry extends much more widely than the LFTCS alone and the data gathered by ENTRUST may provide useful insight into many relevant aspects. About one-third of the 1,050 funded EBs, and more than 20 per cent of the projects involve SWM in some way.

  5.  The objects covered by the LFTCS are:
Areclamation of derelict or contaminated land, whose use is prevented by a previous activity;
Breduction of pollution of land, whose use is prevented by a previous activity, or its effects;
Cthe encouragement of the use of more sustainable waste management activities;
CCthe encouragement of the development of markets for and/or products from recovered materials;
Dthe provision or maintenance of public parks or other public amenities;
Ethe restoration or repair of buildings for religious worship or those of historical or architectural importance;
Fthe provision of administrative, financial or other services to other EBs.

Table 1

EB-NOTIFIED EXPENDITURE BY YEAR
Object1998 (£M) 1999 (£M)2000 to date (£M)1 Totals (£M)
A2.63.8 2.38.8
B0.20.1 0.40.7
C12.3 (31%)17.5 (36%) 11.8 (25%)39.3 (29%)
D21.9 (56%)23.7 (48%) 27.6 (58%)75.6 (56%)
E2.13.6 4.910.6
F0.10.1 0.30.5
TOTALS39.248.8 47.3135.5

  Note: 1 Year 2000 data based on 45 per cent of returns; remainder are due by end of year.

CREDIT SCHEME SUSTAINABLE WASTE MANAGEMENT PROJECTS

  6.  Table 1 shows the expenditure declared by EBs in each of the Scheme objects, "c" and "cc" being combined. From the inception of the LFTCS under the 1996 Regulations before amendment, ENTRUST has always recognised the legitimacy of recycling and the development of new markets for recycled materials within the definition of sustainable waste management. Specifically included under object "c" and "cc" in the 1996 and 1999 Regulations were projects dealing with:

    —  waste minimisation (c);

    —  minimisation of pollution and harm from waste (c);

    —  re-use of waste (c);

    —  recycling of waste (c);

    —  waste recovery activities (c);

    —  cleaning of pollutants from contaminated land (c);

    —  development of products and markets for recovered material (cc).

  ENTRUST also included projects in the following areas as eligible under object "c":

    —  waste collection;

    —  waste sorting;

    —  waste exchanges;

    —  composting;

    —  incineration/waste to energy;

    —  recycled material specification development and education;

    —  landfill technology and safety development.

  7.  There have been 866 funded object "c/cc" projects, comprising about one-third of funds employed, and the subject matter breaks down as shown in Table 2. It is important to note that these figures reflect the historical spend, not the current commitment of funds to particular objects. Moreover, it cannot necessarily be assumed that the allocation of new funding will follow these proportions.

Table 2

BREAK-DOWN OF SPEND ON OBJECT C/CC TOPICS
TopicProject Nos Funding (£M)
Waste Management General31 1.3
Waste Minimisation/Avoidance81 3.8
Recycling23312.1
Composting1012.8
Energy from waste/Incineration8 0.4
Business support331.1
Staffing180.5
Landfill Technology13 1.0
Studies140.1
R&D (not covered elsewhere)106 5.6
Education22410.4
Miscellaneous40.2
TOTAL86639.3

  8.  It is striking that the two main spending areas each comprise more than a quarter of the total. A relatively high proportion of the non-education work could be classed as research, development or demonstration, although some of the recycling projects, in particular, have significant elements of education within them. An example of this would include the education of the public to use different ways of collecting recyclables. Typical examples of other areas are given in Table 3.

  9.  ENTRUST engages in discussions of policy relating to regulatory issues. There is regular exchange of views, at all levels, with officials of HM Customs and Excise. When requested, advice based on our experience as the regulator is also provided to others. Thus, ENTRUST has assisted in discussions between DETR/DTI and the ESA in the formulation of "indicative guidelines" for the funding of the Credit Scheme.

  10.  ENTRUST is required, under its Terms of Approval, to promote the Scheme, and considers it to be essential to maximise the effectiveness of the Scheme. Although efficiency, the quality (or exclusivity) of research or value for money are not aspects falling within the regulatory ambit, ENTRUST is keen to minimise any waste of resources such as duplication in objects "c/cc". In the light of the information and knowledge gathered, we have supplied information to several sustainable waste management R&D conferences and symposia and, ourselves, initiated a conference of EBs and other interested parties who had either submitted duplicated proposals or were known to be considering doing so. The result from this conference was that several EBs volunteered to cease their activities in this area, while all agreed to collaborate in two Steering Groups examining:

    —  means to avoid the creation of a centralised waste management database by utilising advanced information technology;

    —  how to improve co-ordination of sustainable waste management research, development, education and information dissemination so that project duplication would be minimised and the efficiency of the Credit Scheme could be optimised.

  As of this submission two meetings of each Group have been held.

Table 3

TYPICAL EXAMPLES OF PROJECTS BY TOPIC AREA
TopicProject type Project nos
Waste MinimisationAnti-litter campaigns
Support and education of businesses
Waste minimisation clubs
Schools' educational programmes 81
Waste watches
Best practice programmes
Recycling and associated ActivitiesAs Table 2 233
CompostingAs Table 2 101
Research and DevelopmentWaste databases and statistics
(not accounted elsewhere)Waste analyses and measurements
Pre-treatment field trials
Universities 106
Modelling
Technical options development
Specific R&D contracts
EducationSchool curriculum teachers' packs
CD-ROMs and videos
Newsletters, magazines, periodicals
Exhibitions, workshops 224
Best practice guidance
General waste management information

SCHEME ACHIEVEMENTS

  11.  The Scheme has, to date, made available more than £285 million in contributions from LOs. Expenditure so far (with only 45 per cent of returns received for calendar year 2000) is about half this at £135 million, of which almost one third is under object "c" and "cc" and just over half is under object "d". There is, inevitably, a lag between contributions and expenditure, even where a project is relatively short-lived. For longer and more complex projects, there may be delays for several reasons, eg:

    —  EBs may be awaiting matching funds from other sources, such as central government or the EU;

    —  EBs may be awaiting other resources to become available, such as planning permissions, staff, sites, laboratories or equipment delivery;

    —  EBs could be phasing the project to minimise the cost;

    —  specifically regarding object "c/cc" projects, it is important to recognise that, by their nature, R&D projects take time to be defined and implemented.

  12.  Over the next two to four years, the trend indicates that the Scheme's expenditure rate will approach equilibrium with the contributions rate. Moreover, at this stage in the development of the Scheme, historic spend is not necessarily a reliable forecast of the future balance between objects "c" and "d".

  13.  Table 2 shows the major areas of spend—waste minimisation, recycling and materials recovery, composting, R&D and education/information provision. The R&D category contains projects of a diversified nature (covering two or more areas) that cannot be attributed solely to one of the other principal categories.

  14.  The evaluation of these object "c" and "cc" projects is not a simple task. However, it is clear that the Scheme has launched a substantial number and value of R&D and educational programmes, in advance of the Waste Strategy. The existing momentum of the Scheme will facilitate rapid reaction to aspects of the Strategy that may be selected for future funding by contributors (LOs and Contributing Third Parties (CTPs)).

  15.  As an illustration of the benefits accruing generally from the Scheme, Table 4 shows a break-down of the expenditure under object "d"—the provision of public parks, amenities and other community facilities, etc. These and other projects provide social benefits and assist sustainable development in a wider sense than sustainable waste management, such as the expenditure on cycle-and foot-paths facilitating reduction in vehicle use.

Table 4

OBJECT "D" PROJECT ANALYSIS
ClassificationNo Count %Total Spend (£M) Spend %
Nature reserves/habitats/SSSIs378 16.812.416.5
Parks/amenities general248 11.012.716.8
Business support10.04 0.010.02
Project staffing/recruitment35 1.62.02.6
Planting763.4 2.02.7
Surveys/feasibility studies22 0.90.68.4
Greens/Gardens/Grasslands316 14.06.78.9
Village halls/centres etc273 12.17.29.5
Playgrounds/fields237 10.58.811.7
Canals241.1 2.23.0
Foot/cycle/bridle paths254 11.311.014.6
Woodlands/forest148 6.65.57.3
Lakes, rivers, ponds etc83 3.71.52.0
Education/information33 1.50.70.9
Restoration361.6 0.81.0
Repair/maintenance57 2.50.60.8
Miscellaneous331.4 0.70.9
TOTALS2,254100.0 75.6100.0

CONCLUSIONS

  16.  The Sub-committee's Press Notice No 50 itemises seven bullet points for special attention. The ENTRUST statistics summarised in this evidence show that, in addition to other relevant areas, voluntary contributions have funded R&D in the following specified fields:

    —  the more efficient use of resources to achieve wastes reduction;

    —  the development of markets for recycled materials (including compost);

    —  incineration and energy from waste, as a disposal/recovery option;

    —  opportunities for "green" procurement; and

    —  a wide variety of actions to educate the public (of all ages) about the importance of sustainable waste management.

  17.  ENTRUST has demonstrated that it is prepared to take action, as necessary, to protect the integrity of the Scheme by revoking non-compliant bodies. So far the enrolments of six bodies have been forcibly revoked, including two where seven people were arrested by Hertfordshire Police in September 1999, following information supplied by ENTRUST through HM Customs and Excise.

  18.  ENTRUST believes that the first four years of the Scheme have fully justified the foresight and vision of the original concept. The success is attributable to the enthusiastic response of environmental organisations, LOs and CTPs. The Scheme is now approaching maturity in the sense that the numbers and value of projects, justified by the magnitude of the contributions, have been implemented.

  19.  ENTRUST welcomes the interest of, and support received from, Ministers and Departmental Officials, and is pleased by the growing interest shown in the Scheme and its activities by Parliament. ENTRUST is also gratified by the support for the LFTCS received from EBs and LOs throughout the country. The numbers of EBs and LOs participating in the Scheme has exceeded expectations by a wide margin and continues to do so.

  20.  Results so far indicate excellent prospects for the future. The increasing availability of funds has produced substantial increases in the flow of voluntary contributions, with enhanced benefits to the physical and social environment.

  21.  Object "c/cc" projects comprise all kinds of sustainable waste management support—R&D and demonstration-scale projects, education and information provision on a very wide range of topics. Should LOs choose to alter the balance of their contributions in response to the Strategy, the experience of the Scheme will facilitate a rapid response.

  22.  Existing trends indicate that the rate of Credit Scheme expenditure by EBs will achieve broad equilibrium with the contributions' rate, within the next few years.

  23.  LFTCS contributions provide basic funding for EBs, with which other sources (eg Lottery, EU, etc) can match. This may delay spending some of the LFTCS funds due to having to await such matching finance. However, where matching funding has been received, it has enabled the basic credit Scheme contributions to be multiplied up to six-fold as, for example, has occurred in the following projects described in the Appendix:

    —  Penwith Heritage Mining Coast (A1);

    —  Research into high-fibre composting (A12);

    —  Community Re Paint (A16);

    —  Green waste collection (A18).

September 2000

APPENDIX

ILLUSTRATIVE CREDIT SCHEME PROJECTS

Penwith Heritage Mining Coast Project (County Environmental Trust—SW Cornwall) [£35,000 (LTCS) of £500,000 project cost]—OBJECTS A, B, D and E

  A1.  This project covers land reclamation/remediation and economic regeneration in a former tin and copper mining area of outstanding beauty, historical importance and in agricultural decline. When complete the area will offer enhanced public access and attractiveness to tourists. Rehabilitation of this area requires a range of essential safety works. Old mining stopes on the cliff will be fenced, the tramway tunnel to the stamps re-opened, collapsing walling made good, arsenic contamination assessed and mine workings made safe. The Man Engine Shaft at Levant (presently unsatisfactorily capped) will be restored and the tunnel re-opened to provide a fitting commemoration to the 30 men who died in the 1919 disaster which caused the mine's closure.

  A2.  Physical outputs of the project will include improvement of 15.35 ha of derelict land, consolidation of 15 buildings, improvement of 1.3 kilometre of footpath and the creation of 19 temporary jobs along with the longer-term creation of several permanent employment posts.

  A3.  It is a major partnership project. Works funded in this stage will form a core part of a World Heritage Status bid, coupled with an Objective 1 Bid further to regenerate the area's regional distinctiveness and attractiveness to tourists. The project is supervised by Cornwall County Council's Land Reclamation Unit, working closely with the National Trust. Other partners involved in the project are; South West England Regional Development Agency; Penwith District Council (Economic Development Department); St Just Town Council; The Trevithick Trust; Cornwall Archaeological Unit; Cornwall Wildlife Trust; English Nature, English Heritage; Local Businesses and, of course, County Environmental Trust.

  A4.  Landfill Tax Credit funding was an important factor in the levering-in of other support. County Environmental Trust's £35,000 contribution has helped to win funds from other sources, to meet a total current project cost of over £500,000. Other sources of funding include the National Trust, the European Regional Development Fund, Cornwall County Council and the South West Regional Development Agency.

Schools' Recycling Scheme (The Wiltshire Wildlife Trust) [LTCS funding £56,653] OBJECT C

  A5.  The Schools' Recycling Scheme was launched in September 1997 to enable both primary and secondary schools to become actively involved in the 3R's of Waste—Reduce, Re-use and Recycle. The scheme has gone form strength to strength and now entering its third year actively engages over 70 schools in waste minimisation. The scheme encourages children and their parents and teachers to reduce, re-use and recycle at both the home and school. In total 19,500 children have now been involved in the scheme and over 400 tonnes of paper has been collected for recycling.

  A6.  The project supported by Landfill Tax Credits, acts as a partnership between Hills Waste and the Trust. Hills provide the mechanism for collecting recycled paper or textiles from schools by providing bins, organising their collection and making payments for the waste collected. The Wiltshire Wildlife Trust, through the employment of an Education Officer, provides the awareness-raising and educational support to schools on why waste minimisation is vital to the earth's future. Through a series of innovative education programmes young people are engaged in waste issues so that they can make informed decisions on using the 3R's in their daily lives.

  A7.  The key to the success of this project is the personal contact that has developed between the Trusts Education Officer, Hills Waste and schools. This is sustained through a variety of innovative activities, which include the development of a Waste Warrior character that issues challenges to schools. A Waste Warrior newsletter is produced and a certificate scheme and competition has been developed in order to recognise achievement. A range of educational programmes have also been developed including "Put your classroom bin on a diet", Waste Warrior school assemblies and "What a load of rubbish" a visit to the Hills Material Recovery Facility.

Creation of a reed-bed as Wildlife Habitat and wastewater treatment at Slimbridge (Gloucestershire Environmental Trust/Wildfowl and Wetlands Trust/Cory) [Cost £28,500] OBJECTS C and D

  A8.  Support of £28,500 from the Gloucestershire Environmental Trust supported by Cory Environmental, enabled the Wildfowl and Wetlands Trust to create a 1,500 m2 reed-bed. The reed-bed acts as a filter cleaning effluent from the Trust visitor centre, including kitchen and toilet wastes. The material passes through a series of other beds before the reed-bed performs the final cleansing. Environmentalist Jonathon Porritt said that this method is "positively the most sustainable form of waste cleansing there is".

  A9.  In addition to its cleansing properties the reed-bed offers a valuable habitat for a variety of birds and animals, and is a valuable asset to the Trust's well-used visitor centre.

Recycling in Newport, Gwent (Wastesavers Recycling Association) [LTCS £123,861 as at 31 March 1999; year one of five] OBJECT C

  A10.  WRA is a non-for-profit community based recycling association operating a green-box kerbside collection scheme in partnership with Newport County Borough Council (NCBC). NCBC provides the 10 per cent CTP donation. The partnership has enabled a five-year pilot project to serve the 55,000 residents of Newport with kerbside collections, growing at 10,000 properties per year. Twenty thousand properties are currently being served with a further 10,000 coming on line later this year. WRA collects newspapers, magazines, mail, all types of glass, steel and aluminium cans, textiles, clothing and shoes. So far, over 2,000 tonnes of material have been recycled and saved from landfill.

  A11.  In addition to its valuable contribution to promoting good waste management practices, the partnership provides employment, training and volunteering opportunities which all assist in the implementation of this successful scheme.

Research into High Fibre Composting (Centre for Alternative Technology, Machynlleth) [LTCS so far £21,960; total project cost £85,000] OBJECTS C AND CC

  A12.  Research into high-fibre composting is in its second year at CAT, funded through the landfill tax credit scheme by Powys County Council, Hanson Environment Fund and local farmers Mr and Mrs Jukes. The intention is to develop a blueprint of an easy method for composting household waste. High-fibre composting incorporates non-recyclable waste paper and cardboard into the composting process, reducing household waste by 50 per cent and improving the compost at the same time. Combined with other activities, CAT's research shows that householders with gardens could reduce the quantity of domestic refuse by up to 90 per cent. The project involves the compost advisor working with 65 local households, with the results of the research made available to the public.

  A13.  This project offers Local Authorities a simple and reliable method for the householders, which could make a valuable contribution towards the achievement of national waste minimisation targets. This level of research and development of composting techniques could not have been achieved at CAT without the support of the Landfill Tax Credit Scheme.

Recycling in the North East (Tees Valley Wildlife Trust and County Durham Environment Trust) OBJECT C

  A14.  This three year project (started September 1998) aims to develop recycling activity as a means of researching and establishing methods that enable such activity to become viable in rural areas where, because of remoteness and low population, it was not previously deemed so. LTCS money has been used to hire capital items required for the project, including bottle and paper collection banks and two specialist collection vehicles. Contractor terms were agreed with Roseberry Recycling Ltd to deliver the project and, rather than have expensive equipment under-used, Roseberry pays Tees Valley WLT for the use of the vehicles on non-project work.

  A15.  Materials collected are the property of Roseberry who disclose any benefits (Roseberry is not the contributor) and costs of disposal and reinvest any income in the future operation of the Scheme. The actual tonnages collected have been lower than originally anticipated, but it has recently become apparent that associated recycling initiatives are now developing because of the project.

Community Re Paint (SWAP, global Balance Trust and Green Leeds) OBJECT C

  A16.  Save Waste and Prosper co-ordinates this national programme and several EBs, including Global Balance Trust and Green Leeds, have registered Re Paint projects. There are currently 14 schemes established and the aim is to establish 90 schemes by 2004. Landfill operators have, so far, donated £250,457 to this programme. ICI Dulux provide the 10 per cent contribution and further donations totalling £112,000. The National Lottery has also awarded £65,000.

  A17.  The aim of the Community Re Paint schemes is to collect surplus paints from households, the trade, retailers and businesses and redistribute it, free of charge, for re-use by community groups, charities and voluntary organisations and those in "social need". Methods of collection vary, but examples are dedicated drop off points at DIY centres, custom made skips at civic amenity sites, drop off facilities at council or parish offices, kerbside collection, direct delivery to Re Paint centres. A programme of education and training has been established and a manual produced which enables local voluntary groups and communities to set up and run their own local schemes. The project has brought many project partners together, including Local Authorities across the country, community groups (over 350 have benefited) and many others.

Green Waste Collection, Composting and Re-use (South Ribble Environmental Trust/Lancashire Waste Services) OBJECTS C AND CC

  A18.  This three year, £1.3 million project is a large-scale field trial to assess different methods of collection, composting and re-use of green waste in Lancashire. The project is a partnership between the Local Authorities, private and the voluntary sector at a county, district and local level. Three Local Authorities will contribute 25 per cent of the project costs, the remainder comprising contributions from a Landfill Operator. It is estimated that the project will reduce green waste going to landfill in Lancashire by a minimum of 12,500 tonnes per year.

  A19.  The project sets up and trials separate, segregated green waste collections in differing geographical and socio-economic contexts (rural, semi urban and urban). This will be achieved through various types of doorstep collection methods across districts, utilising differing bin types, times and days of collection. The collections will be supported by a series of educational events involving leaflet delivery to households, school workshops, local media releases, journals and articles in trade magazines.

  A20.  The collection methods will be analysed and a schedule of reduction, contamination of the waste, weights etc, and the success of each collection method will be assessed against the amount and type of education given to each area/household. The green waste will be diverted for composting with different trial methods of composting being undertaken, with the compost being available to the local community during and at the end of the project. The results of this project will be disseminated as wide as feasibly possible. Education officers have been appointed and a programme of education is being undertaken.

Recycling and Re-use (East Anglian Business Club) OBJECTS C AND CC

  A21.  An innovative scoping study to recycle and re-use redundant oil and gas platforms, funded wholly by the LTCS, has led to Government Guidance Notes for Industry on the decommissioning of offshore installations and pipelines. Furthermore, the Financial Secretary to the Treasury, Stephen Timms, has announced that a new tax relief scheme will also be put in place further to encourage the re-use of these platforms. The Guidance notes, which will effectively outlaw dumping these platforms at sea and together with the tax incentives, are expected to favour East Anglia as the site for recycling and, thereby, secure new jobs and investment in the area.

Waste Reduction (BRE Waste and Environmental Body/Biffa/Hanson) OBJECTS C AND CC Waste Audit and Minimisation Scheme for Pegasus Social Housing

  A22.  The project's aim was to audit the levels of waste generated in the construction of housing and to propose solutions. The results showed the potential of reducing waste, the cost of waste and payment for wasted labour by at least 50 per cent. A further project, "Demonstration of waste audit and minimisation scheme—Greenwich Village" is currently underway and has used the earlier study findings to apply strict waste production targets. These will reduce the expected level of waste by 50 per cent. The first project was funded by the Biffaward, the second by the Hanson Fund.

Creating New Markets for Waste (Nustone Ltd) OBJECT C and CC National Pilot Scale Facility for the manufacture of aggregates from waste

  A23.  This project aims to provide a nationally available facility, from laboratory to pilot scale manufacture, of aggregates from various landfill waste—the aim is both to reduce waste and to conserve non-renewable mineral resources. This project is to be funded through the RMC fund.


 
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