Supplementary memorandum submitted by
the Environmental Services Association
Thank you for inviting us to offer supplementary
evidence on two matters.
Annex 1 to this letter details some current
problems with the planning and permitting systems as you requested.
Annex 2 is based on documentation provided by Peter Jones and
seeks to provide the financial information requested by Mr Jack.
We hope this is what is sought: as and when
further information might be helpful we are of course more than
happy to help as best we can.
28 March 2003
Annex 1
SOME CURRENT PROBLEMS WITH THE PLANNING AND
PERMITTING SYSTEMS
Achieving compliance with the Landfill Directive
and other EU legislation will probably require at least 2,000
new facilities to manage waste diverted from landfill and pre-treated
before management in landfill. Notwithstanding the aspiration
of the Strategy Unit to reduce the trend rate of growth of waste
arisings, this waste will require treatment and/or processing.
As Mr Jones mentioned in oral evidence, the UK is moving from
a system which manages most of its waste within landfill (in a
process taking about 30 years to achieve an environmentally stable
state) towards a system of industrial processes (which will treat
waste in 30 days or even 30 hours).
Based on current performance ESA is not confident
that the planning and permitting processes could cope with the
development of waste management facilities on the scale required
by EU law.
1. PERMITTING
The Environmental Protection Act 1990 specifies
that the Environment Agency should aim to process applications
for new waste management licences within four months. Current
performance falls well short of this. In December 2002, the National
Audit Office recorded that in 2001-02 only 22% of licences were
issued by the Agency within the target period and that about one
in seven had been outstanding for more than a year. As the industry
tries to help the UK to achieve compliance with EU law by submitting
applications of increasing technical complexity, there is increasing
concern in the industry that the Agency's performance may deteriorate
rather than improve.
Ways in which the efficiency and effectiveness of
the permitting process could be improved include:—
(a) A consistent approach to dealing with
waste management technologies
The authorities provide no national strategic
framework for waste management technologies. As a result, wide-ranging
discussion and debate on the operating performance of waste management
technologies can often dominate both the planning and permitting
processes in individual applications.
Greater certainty and efficiency would be provided
if the Agency adopted a common approach to licensing of specific
waste management technologies meeting specified operating standards.
We understand that this happens in the Netherlands where, every
four years, the Ministry of Environmental Affairs issues a national
waste management plan setting out minimum standards for specified
technologies. Applicants must demonstrate that they have management
systems in place to operate the technology to these defined standards
rather than demonstrate the operational performance of the technology
through tools such as life-cycle analysis. The Plan is revised
every four years to take account of technological developments
and progressively to ratchet up standards.
Many of the technologies likely to manage the
UK's waste over the next decade have been operational elsewhere
for some years: for example, mechanical biological treatment (Italy),
fluidised-bed incineration (Japan) and bail-mill recycling (Germany).
Reliable data on the performance of these technologies already
exists and the Agency should initiate standard procedures to act
upon this information having accessed it, ideally through IMPEL
within the EU.
(b) Regulatory guidance
From the Government:
DEFRA has not provided the Environment Agency
with the clear information or policies required to implement the
Landfill Regulations. For example:
in 2001, ESA was told by DEFRA that a Circular
would be issued to resolve ambiguities such as the definition
of pre-treatment. While the Agency has given some guidance, DEFRA
appears to demur and we therefore still await that Circular;
in oral evidence to the Committee's Inquiry into
hazardous waste on 2 July 2002 ESA noted that its Members were
awaiting for definitions of "corrosive" waste and "liquid
waste". Despite the Landfill Directive prohibiting the landfilling
of corrosive and hazardous liquid wastes from 16 July 2002, the
Government has not yet issued guidance on these definitions. As
stated in our recent oral evidence we confirm that we offered
to provide DEFRA with the resource to fund the necessary legal
analysis, an offer that was not accepted; and
despite agreement of the Waste Acceptance Criteria
(WAC) by the EU in December 2002, DEFRA has indicated that proposals
for the implementation of WAC in the UK will not be issued for
consultation until June 2003. Delays in the implementation of
WAC will further constrain investment in hazardous waste treatment
technologies and risks causing severe environmental damage, which
could be expensive to remediate,
From the Environment Agency:
In the absence of binding and clear guidance
from DEFRA, the industry is subjected to informal guidance from
the Agency of uncertain legal status. Over the last year operators'
proposals have been subject to decisions made on the basis of
draft guidance, and even on the basis of guidance which has not
been disclosed to the industry. Operators can be compelled to
apply for permits even without knowing the basis on which those
applications will be judged.
On some occasions there is not even a clear
understanding of what constitutes an application being duly made
in the eyes of the Agency. Inconsistency within the Agency over
the interpretation of duly made PPC applications is causing considerable
uncertainty and this is currently of considerable practical significance.
In one example, an ESA Member was advised that a PPC application
had been duly made only to have the decision reversed due to a
change in Agency personnel: to date, that application has so far
lasted thirteen months.
(c) Resources
It is crucial that the Agency devotes adequate
resources to determining applications.
Over the next four years, the Agency will need
to process about 1,000 new PPC permit applications for landfills,
and about 400-600 PPC permits for other sectoral infrastructure.
This excludes the additional 2,000 items of infrastructure that
the Agency estimates to be required. Dealing with these applications
will be three newly formed Strategic Permitting Teams.
The Agency will review the success of its reorganisation
under project BRITE in the autumn of 2003: if that review shows
continuing delay in determining permits, the Agency must improve
the operation of the Strategic Permitting Teams and provide more
resources.
2. PLANNING
The waste management industry does not seek
special treatment: planning is an issue where elected political
leaders balance economic development with environmental and social
needs. However, delays and a lack of certainty throughout the
whole planning process are undermining the UK's ability to deliver
the necessary infrastructure to comply with its legal obligations
resulting from the Landfill Directive.
For example, an ESA Member was awarded a contract
to deliver an integrated waste management solution including composting,
recycling and a small-medium sized energy from waste facility.
The contract accorded with the local authority's Waste Strategy
produced two years earlier. An application for the energy from
waste facility was duly submitted in late 2000 but the application
was rejected by the same local authority, one of the three reasons
being that the applicant had not demonstrated that the proposal—and
by definition the Authority's own strategy—represented BPEO.
At the planning Inquiry, which cost the company £0.5 million,
the local authority appeared as both the principal supporter of
and the principal objector to the proposal.
It can take up to seven years from inception
to a facility becoming operational. New facilities managing municipal
waste are usually based on a secured contract with a local authority.
The developer must then identify an appropriate site, secure the
necessary finance, prepare a comprehensive detailed planning application
and, possibly, appeal against a planning refusal. In the case
of an energy from waste facility it can then take two to three
years to construct and commission the facility.
We do not expect the Planning and Compulsory
Purchase Bill to improve significantly the performance of waste
management planning. Addressing the following points would provide
more certainty:
(a) Introduce Model Policies and a Model
Plan Framework for Local Authorities
Whilst we welcomed the publication of guidance
on policies for waste management by the Office of the Deputy Prime
Minister, we believe that the Government should give a stronger
lead. The Government should provide a model Plan framework including
core standard policies which a local authority must follow unless
it can demonstrate to the Government a reasonable case for not
so doing.
(b) National Statement on Health Effects
Alleged health effects relating to a number
of technologies often dominate waste management planning applications.
In one Public Inquiry the Inspector gave "perceptions of
health risk" as a reason for rejecting a planning application.
The Strategy Unit proposed that an independent
body to be set up to bring together literature and evidence on
the health and environmental effects of different waste management
options relative to each other and to other activities. An authoritative
official statement on health must be produced promptly with a
clear indication on what constitutes an "acceptable risk".
(c) Awarding of Costs
A significant number of applications for waste
management facilities is determined by Public Inquiry. This includes
applications rejected by elected Members against the advice of
planning officers. An Inquiry causes further delay and cost and
there is concern within the industry that planning inquiries may
become much more common. Currently, if an ESA Member appeals successfully
against a refusal to grant planning permission it has to bear
its own costs unless the local authority has behaved unreasonably
and caused unnecessary expense. Instead, where an ESA Member appeals
successfully against such a decision, the local authority should
be required to pay the costs of both parties.
(d) Permitted Development Rights
Other sectors—for example water and minerals—benefit
from permitted development rights (PDRs). Granting PDRs to the
waste management industry—for instance to allow the installation
of an additional weighbridge on an existing landfill site without
the need for a new planning application—would enable ESA's
Members to devote more resources to working with partners to deliver
the infrastructure needed to comply with the Landfill Directive.
(e) Site Specific Planning
Section 54a of the Town and Country Planning
Act 1990 states: "where in making any determination under
the Planning Acts, regard is to be had to the development plan
system, the determination shall be made in accordance with the
plan unless material considerations indicate otherwise."
Waste Local Plans identifying sites were therefore
supposed to provide the waste management industry with greater
certainty. However, this does not necessarily happen in practice
and often there are significant delays as the principle of land-use
development is debated both during the development of the Plan
and at the planning application.
A properly constructed Plan should provide the
strategic framework behind the selection of appropriate sites:
the developer should not have to justify either the principle
of development in that location or the principle of proximity.
In addition, a properly constructed Plan should reflect the BPEO
as identified by the Regional Waste Strategy rather than imposing
the evidential burden on the applicant of demonstrating BPEO.
The emphasis of the planning application should be on the developer
demonstrating that the application is consistent with the Plan
and that it would not cause an unacceptable environmental impact.
In the Netherlands there is less opposition
from the general public to waste management facilities and fewer
delays than in the United Kingdom. The Netherlands is divided
into 12 provinces and each province prepares a development plan.
The Plan designates areas of land for industrial use and more
specifically for categories of industrial activity—for example,
waste processing plants belong to category 4. While it can take
up to two years for the Plan to be developed and the public is
consulted extensively, the identification of sites provides the
developer with more certainty. Whilst the developer must still
submit a building planning application to the Province, it focuses
primarily on the construction and operation (for example, fire
safety procedures) of the facility rather than on the suitability
of the land.
Annex 2
FISCAL DRIVERS AND FUNDING
At the end of ESA's oral evidence, The Rt Hon
Michael Jack MP asked for a note on value flows in the industry
with particular reference on the role of the £35 landfill
tax. This letter is designed to answer that request and is substantially
based on notes prepared by Mr Peter Jones of Biffa.
A flowchart is attached to this appendix and
shows the origin and breakdown of the current £60 per household
per year spend on collecting and managing household waste. National
data suggests that direct waste management collection and disposal
costs represent around 1.5% of District and County Council spending:
this is about half the 3% total for "Environmental Services"
(which include additional charges for amenity, parks and gardens
and street cleansing/litter activities). Different councils treat
these items in different ways.
Around 40% by value of collection activity is
in the hands of conventional private sector waste management companies
with the balance in the hands of Direct Service Organisations
(DSOs). The latter are typically stand-alone organisations, nominally
private sector but in reality dedicated solely to servicing single
council contracts. Management and operation of DSOs remain similar
to that prevailing before CCT, with DSOs often utilising infrastructure
and facilities of the district council with associated capital
and rental charges not necessarily subject to market testing.
The Pearce report addressed reflecting the full
cost of landfill including externalities but the present objective
of public policy appears to be artificially to raise the cost
of landfill (perhaps above its "true" full cost) to
make the relative price of treatments higher up the hierarchy
more attractive. ESA also sees the main purpose of a £35
per tonne landfill tax as making alternatives to landfill-such
as recycling-economically viable on an industrial scale.
Mr Jack asked about the role of a £35 landfill
tax in achieving minimisation.
At the moment, there are no drivers in place
to minimise households' generation of waste in response to price
signals such as that given by a higher landfill tax and ESA has
for some years advocated piloting of direct charging of householders
in the current Parliament.
As far as business producers of waste are concerned,
ACBE has provided data indicating that the overall impact of a
landfill tax higher than £35 per tonne on business as a whole
is slight. While the expectation must be that properly run businesses
respond to the price signal of higher waste management costs by
seeking to reduce the waste they generate, ESA has consistently
noted, in the absence of certain data about the elasticity of
demand for landfill in response to price, the complementary role
of producer responsibility in helping to secure long term systemic
reductions in trends of waste arisings.
Different companies take different views on
the relative costs of various technologies but Biffa sets out
its views at table 2 of page 95 of its publication Future Perfect
which has been forwarded to all Members of the Committee. There
is broad agreement that in very approximate terms the net effect
of differentials in capital costs, operating costs and income
streams is that more advanced technologies require net gate fees
of at least £45 per tonne compared to a large landfill where
£10 per tonne is probably acceptable.
To invest on the scale required to achieve compliance
with the Landfill Directive, the waste management sector needs
confidence in the ongoing stability of regulatory drivers of waste
streams into new infrastructure and contractual guarantees of
sufficient duration to provide waste streams for specific items
of infrastructure.
We have advised the Government that once the
landfill tax reaches £35, the rush to invest in infrastructure
could be very substantial. Many take the view that little will
happen until tax rates reach £30 per tonne at which point
ESA's Members may have the confidence, anticipating a minimum
two-year period to achieve the necessary consents, to submit planning/licence
applications for equipment to be operational by the time the tax
on landfill will reach £35. If the Government plans to achieve
the £35 level only at the end of the Parliament after next
by increasing the tax at no more than £3 per annum from 2006-07,
there would be five years of very constrained action on the part
of the waste management industry because of the lack of prospect
of a return on investment in infrastructure. The exceptions would
be provided by far sighted authorities which recognised the need
to achieve targets and accepted that the cost of managing household
waste needs to rise by £30-£50 per tonne: as ESA has
said, it is necessary to envisage a total spend on the municipal
waste stream of about £1 per person per year.
Biffa's publication "Future Perfect"
reflects a broad consensus in indicating that one typical landfill
site processing 300,000-500,000 tonnes per annum may need to be
replaced by between 5 and 10 smaller facilities involved in recycling,
composting and energy recovery. The Government does not appear
to have appreciated the dynamics of ESA's Members providing about
2,000 alternative processing facilities to recycle, compost and
recover energy from waste within 30 days in place of about 300
landfills with internal stabilisation of waste over about 30 years.
| 
