Select Committee on Environment, Transport and Regional Affairs Fifth Report



  Customs and Excise have completed their assurance of ENTRUST's investigations into the allegations made by the Guardian newspaper about abuse of the landfill tax environmental bodies credit scheme. They are satisfied that ENTRUST have undertaken a thorough investigation of the specific allegations. However, the Guardian has highlighted how the operation of the scheme can be less than transparent and has identified where the landfill tax regulations, or their interpretation, may not be delivering the desired outcome. These issues are now being addressed.


  When the Financial Secretary appeared before the Environment Sub-committee on 28 November 2000 he said that Customs and Excise would write notifying the outcome of their assurance of ENTRUST's investigations. I can now advise you that, as part of the ongoing quality assurance of ENTRUST's activities, Customs have completed their examination of the records of ENTRUST's investigations into the allegations made by the Guardian newspaper about specific landfill site operators and environmental bodies (EBs). We are satisfied that in each case ENTRUST thoroughly investigated the specific allegations where these involved potential irregularities under the landfill tax regulations. ENTRUST discovered no breaches of their rules during their investigations. No evidence was discovered of either landfill site operators or local authorities controlling the EBs concerned and their projects were found to be compliant with the landfill tax regulations.

  ENTRUST did uncover some minor infringements of their "best practice" guidance for EBs eg the failure to go out to tender for work carried out. ENTRUST have discussed these with the EBs concerned and, where appropriate, changes have been made to those EBs' procedures. In one other instance, ENTRUST considered that the relationship between an EB and a contributing local authority had the potential to lead to future projects being undertaken which might benefit the contributor. Consequently the EB has been placed under ongoing close audit scrutiny by ENTRUST. We are satisfied such actions were appropriate to deal with the infringements and situations discovered.

  The Guardian newspaper's report usefully caused us to consider whether a more precise definition of public amenity is required and to what extent local authorities when acting as contributors might be considered to `benefit' from public amenity projects in their areas. As a result ENTRUST are revisiting their interpretation of the landfill tax regulations and their resulting policies. These matters are now under active consideration in a working group chaired by ENTRUST which includes officials from DETR, DTI and Customs.

John Anderson

February 2001

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