Further Memorandum from the Environmental
Services Association
Response of the Environmental Services Association
to the Strategy Unit Report and the Pre-Budget Statement
BACKGROUND
The Environmental Services Association (ESA)
welcomes the opportunity to provide further evidence to the Environmental
Audit Committee's inquiry into Winning the War on Waste. ESA is
the sectoral trade association for the UK's waste and secondary
resource management industry, which contributes more than £5
billion annually to the UK economy. To return more of the materials
and energy in waste to the productive economy, as required by
Waste Strategy 2000 and EU law, our Members are in principle willing
to invest an additional £1 billion per year in infrastructure.
ESA'S RESPONSE
TO THE
STRATEGY UNIT
REPORT
ESA has welcomed the Secretary of State's leadership
in convening the first National Waste Summit and commended without
qualification her chairmanship of the Waste Study Advisory Board,
which brought together a wide range of partners in a constructive
spirit. The Secretary of State, in her first year in office at
DEFRA, has done all that could reasonably have been expected.
The Strategy Unit has re-stated many of the
challenges which ESA and others have for some years identified
as being faced by the UK. The report recognises, as ESA has already
itself indicated, that on current trends the United Kingdom will
fail to deliver compliance with EU legislation, such as the Landfill
Directive, and suggests practical measures to reduce the barriers
to investing in waste management in the United Kingdom.
However, ESA believes the report has fallen
short of identifying the precise delivery mechanisms the UK will
need to use. The report can only be considered a success if it
promptly galvinises the Government into taking the necessary significant
and imminent decisions to achieve the UK's compliance with EU
laws. The success or otherwise of the Strategy Unit's report will
be judged not by what it says, but the action that it precipitates
in the coming months.
ESA believes that there are several key recommendations
contained in the report on which the Government should make rapid
progress in order to meet national and international obligations.
KEY RECOMMENDATIONS
FOR ACTION
1. Focused responsibility for waste management
policy within government
The fact that a Strategy Unit project was required
illustrates the current lack of focus for waste management issues
within Government. Responsibility is spread between two main departments-DEFRA
and DTI-but other Departments which impact on waste policy include
ODPM, DoH, and HMT. Furthermore, in a context where it is the
UK as a whole which is responsible for compliance with EU law
and where it is essential to avoid regulatory arbitrage within
the UK, devolution represents a further aspect of the policy matrix.
A champion for sustainable waste management
fully appraised of the facts and with the necessary powers to
effect change is a priority if the UK is to move forward. Subject
to appropriate parameters, we therefore welcome the Strategy Unit's
view that the Secretary of State for Environment Food and Rural
Affairs should be the Ministerial Champion for waste management
strategy.
ESA also welcomes the report's recommendation
that the respective roles of DEFRA and the Environment Agency
should be clarified. The Government must, more effectively than
hitherto, provide strategic leadership on policy development and
negotiations. ESA welcomes strengthening of the waste management
function within DEFRA and also the establishment of a delivery
unit (Recommendation 26). One department focused on delivering
the UK's environmental objectives, including those for waste management
(Recommendation 27), should concentrate necessary expertise and
speed up decision making. A more effective focus within the Government
should also help the Environment Agency to concentrate on its
core role of regulation.
2. Paying for waste management
The report rightly recognises that the UK is
not paying enough for waste management. It also recognises that
the polluter pays principle can be applied to householders. However,
the report still reflects the confusion of debate over the distinction
between direct and variable charging, something which was made
clear in the Ernst and Young discussion document commissioned
by ESTET and published in July 2002[9].
In a context where the Government has some way
to go in allocating adequate resources for management of the municipal
waste stream, we are not persuaded that it is helpful for the
Strategy Unit to raise the prospect of discounts in Council Tax
(Recommendation 1).
ESA has for some time advocated piloting of
direct charging in the current Parliament. The Government must
grasp the opportunity to bring in the legislative changes required
to allow flexibility in the way local authorities fund the collection
and management of municipal waste.
3. Reform of the planning system
ESA has for some years argued that the current
planning system is not delivering for waste management preventing
the delivery of national objectives at a local level. It is a
continuing source of frustration when, having competed for and
won a contract with a local authority, the same local authority
will not grant planning permission for the facilities required
to deliver the contract.
We look forward to an early review of PPG10
(Recommendation 32) as obtaining planning permission for facilities
remains a major barrier to delivering sustainable waste management.
4. Health
Delays and uncertainty affect the development
of all types of waste management facility. Often delays are due
to public debate, frequently based on inadequate information sometimes
mischievously propagated, about potential health issues. Waste
management is, of course, in very large part a mechanism to protect
public health. Without a highly regulated waste management industry
there would undoubtedly be serious and widespread public health
problems.
ESA's Members operate to high standards, regulated
by the Environment Agency. However, in a context where there has
been imprecise media coverage of inconclusive data, ESA does recognise
that an independent review of sufficient calibre might help to
provide authoritative communication of current knowledge of the
potential health impacts of waste management and help define those
areas where gaps exist in scientific knowledge (Recommendation
15). Such a review should not be used as to contrive further prevarication
and delay, and it should start very soon.
5. Recycling
ESA agrees with the report's conclusions that
there is a need to increase rates of recycling. ESA's Members
want to extract more of the value from waste. We would, for example,
go further than Recommendation 6—which advocates that space
be allowed for recycling facilities in new developments with more
than 50 houses—and encourage high levels of use of recycled/reused
building materials in appropriate new developments themselves
as a condition of planning consent. We would also welcome, when
ODPM launches its major initiative in January 2003, proper consideration
of the integration of CHP in the construction of new residential
and industrial districts.
ESA has already commended the Government's current
responsible approach to defining recycling. The Government's Best
Value performance indicators define recycling not on an input
but on an output basis. This reflects the approach taken by the
draft European CEN standard (prEN 13965-2). Pointing to productive
re-use of recycled materials, the draft standard seeks to measure
real recycling which broadly reflects environmental benefit. This
also builds on the recently published European Regulation on waste
statistics[10],
which requires the definition of recycling to be "the reprocessing
in a production process of the waste materials for the original
purpose or for other purposes including organic recycling but
excluding energy recovery".
6. Simpler contracts
We welcome the Strategy Unit's recognition that
the Private Finance Initiative (PFI) needs to be in tune with
the sector's needs (Recommendation 23). ESA tried to address this
with the Government three years ago and believes that the Waste
PFI delivery panel should be extended to include representation
from our industry and the PFI itself needs to be made more simple
and flexible.
Contracting with local authorities is a continuing
source of frustration for both parties. Considering that some
of the biggest waste management companies have turnover of less
than £100m and that margins in waste management are historically
low, spending £1m on bidding for a single contract is a significant
barrier to entry.
ESA'S RESERVATIONS
ABOUT THE
REPORT
1. Home composting
We believe the report places too much emphasis
on home composting, and we are not convinced that such a rapid
growth in home composting is feasible, or that it will make a
significant impact on the UK's achievement of the Landfill Directive
diversion targets.
Even where there are private gardens, modern
developments tend to have smaller gardens which means composting
is closer to people. In this case, it might be safer and ultimately
much more reliable for this waste stream to be separately collected
and composted in enclosed and strictly regulated facilities. This
would also be in tune with future European legislation which will
require the separate collection of biodegradable waste from households
for centralised composting.
2. Incentives for householders
As outlined earlier, of particular concern is
the recommendation that rebates could be provided to Council Tax
payers at a time when it is recognised money should be directed
towards waste management rather than being removed from the system.
The UK currently spends around £1.5 billion per year on managing
the municipal waste stream, a figure which must be at least doubled
if we are to meet our national and international obligations on
waste and recycling. At most 3% of what is needed is therefore
provided by the Government's proposed abolition of Object C of
the Landfill Tax Credit Scheme.
ESA'S RESPONSE
TO THE
PRE-BUDGET
REPORT
Landfill tax
ESA has welcomed the announcement of the medium
to long term target for the landfill tax of £35 per tonne.
The landfill tax needs to reach at least £35 per tonne to
make other forms of management, such as recycling and composting,
viable on a scale necessary for the UK to achieve compliance with
EU law. Furthermore, ESA has welcomed the intention that, in line
with our advice, that this will be fiscally neutral for British
business. The tax should be a behavioural driver rather than a
mechanism to raise revenue.
However, the Government has failed to give a
clear signal on when the landfill tax might reach £35 per
tonne. This is despite the Government's Advisory Committee on
Business and the Environment concluding: "even at £45
per tonne, landfill tax costs would rise to at most only a few
tenths of a percent in any sector, and for many commercial sectors
it would remain at less than one tenth of a per cent . . . the
increases might be enough to make alternative waste management
options more viable." [11]
ESA's Members are ready to work with partners
and to invest billions of pounds to deliver the aspirations of
the Strategy Unit's report and put in place a world-class waste
management system. A clear indication of when the landfill tax
will reach £35 per tonne, and the increments the Chancellor
proposes to make in order to get there, will provide ESA's Members
greater certainty for investment and the sooner our Members' planned
investment can be forthcoming, therefore, we encourage the Government,
following its consultation, to announce its intentions as soon
as possible.
THE LANDFILL
TAX CREDIT
SCHEME
The proposed changes to the Landfill Tax Credit
Scheme signalled in the Chancellor's Pre-Budget Report represent
a U-turn by the Government. A year ago, the Government asked ESA's
Member to direct two thirds of funding from Scheme into Object
C projects (training, research, recycling). Even though the Government
itself described this target as challenging, our leading Members
promptly complied.
We are concerned by the instability-over such
a short period and for a relatively small sum-in the Government's
policy and hypothecation is not an entirely encouraging signal.
The Strategy Unit report refers to partnership.
Partnership might have been expected to safeguard the ESA Research
Trust, the Environmental Services and Training and Education Trust
and, indeed, the support we advocated for the National Waste Awareness
Initiative: beacons which deliver cost-effective added value.
In recent years ESART has provided a focus for
high quality research on sustainable waste management. Therefore,
it is essential that the industry is included in discussion between
DEFRA and the Environment Agency regarding future research programmes.
The ESART and ESA's Members have excellent state of the art knowledge
and inclusion of the industry in discussion is more likely to
achieve focus.
January 2003
9 Ernst & Young: Analysis of the Application of
the Producer Pays Principle to Producers of Household Waste as
a Driver Towards Sustainability. July 2002. Available at http://www.esauk.org/documents/ernstandyoung.pdf Back
10
Regulation (EC) No 2150/2002 of the European Parliament and the
Council of 25 November 2002 on waste statistics. Back
11
Resource Productivity, Waste Minimisation and the Landfill Tax-Advisory
Committee on Business and the Environment Back
| 
