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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1256-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE ENVIRONMENT, FOOD AND RURAL AFFAIRS COMMITTEE
WASTE POLICY AND THE LANDFILL DIRECTIVE
Wednesday 10 November 2004 MR STEVE LEE, MR CHRIS MURPHY and MR ROGER HEWITT Evidence heard in Public Questions 1 - 71
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Environment, Food and Rural Affairs Committee on Wednesday 10 November 2004 Members present Mr Michael Jack, in the Chair Mr Colin Breed Mr David Drew Patrick Hall Mr David Leper Mr Austin Mitchell Diana Organ Joan Ruddock Alan Simpson David Taylor Paddy Tipping Mr Bill Wiggin ________________ Memorandum submitted by the Chartered Institute of Wastes Management
Examination of Witnesses Witnesses: Mr Steve Lee, Chief Executive, Mr Chris Murphy, Deputy Chief Executive, and Mr Roger Hewitt, honorary Treasurer, Chartered Institute of Wastes Management, examined. Q1 Chairman: Good afternoon, ladies and gentlemen. Welcome to this first evidence session in the Committee's inquiry into waste policy and the Landfill Directive. We have one witness this afternoon: the Chartered Institute of Waste Management. Welcome and thank you for your written evidence. We welcome to the Committee Mr Steve Lee, the Chartered Institute's Chief Executive. Mr Lee, you were Environment Agency, were you not? Mr Lee: I have been a man of many colours! Q2 Chairman: I was just checking. I did not want to put my foot in it in any way. I thought it must be the same person. You are very welcome, because you have been kind enough on previous occasions to come and give us evidence. You are accompanied by Chris Murphy, the Deputy Chief Executive, and Roger Hewitt, honorary Treasurer. I notice the two Chief Executives have put the Treasurer in between, which must say something about resources. I have to say, gentlemen, that I still find this a confusing and difficult area to wrap my mind around, if for nothing else than that the acronyms and nomenclature are quite difficult if you are not a day‑by‑day practitioner in the schemes. Looking at the Landfill Directive, I was struck by a point in paragraph 1.2 in your evidence when you said, "Government should also take this opportunity and that of the forthcoming Waste Strategy Review to check whether all the strategic inputs and responsibilities to support their work are in place", which gave me the impression that the whole of the implementation of the Landfill Directive was still in a malleable state where you perhaps felt that not all the thinking that should have been done had yet been done to make certain that its implementation was going to go as successfully as possible. In answering that question could you tell the Committee a little bit more about what this Waste Strategy Review is about, what will it cover and who to your knowledge is supposed to be involved in it? Mr Lee: I will take that one, if that is all right, Mr Chairman. Thank you for that question. It is a very important and timely question. At the moment we have Waste Strategy 2000 that was written to guide the waste strategy for England and Wales. Subsequently Wales has got its own waste strategy, and, coming up to 2005, it is time for the five-year review of all the policies, instruments, tools and ideas that were originally built into that strategy. The strategy review is to be led by Defra and most of their work will be done towards the end of this year and through the first half of 2005. For me the most important question is what are the bounds to this review of the strategy? How far do you intend to go? Do Defra intend only to concentrate on municipal wastes? Do you intend to stretch out all of the policy to cover industrial and commercial waste as well? The bounds to the strategy review are absolutely fundamental for me, and that is something that we will want to learn from Defra in the next two to three months. Q3 Chairman: So they have a role to sort of that out. The Committee has received quite a lot of evidence from various groups on the implementation of the Landfill directive, and let me just entertain you with one or two of the quotes that have been put to us. The Environmental Services Association referred to the country as being "unprepared" for the implementation of the Directive, and Biffa Waste Service's comment was that the Government had failed to provide adequate information and guidance to waste producers. You, on the other hand, took a different view. You said that the changes were "well heralded", but you also recommended that the Government should give greater attention to communication of waste initiatives. Why the difference? Why does the trade think it is a bit of a dog's breakfast and you think it is all right? Mr Hewitt: I do not think there is that much of a difference of view really, Chairman. It may simply be a different emphasis on words. Q4 Chairman: But they are rather important in this context. Mr Hewitt: Yes, they are. There is no doubt that even today a very large part of the waste producing community in this country do not understand what the end of co-disposal and the Landfill Directive meant to it. The amount of information given to them was sparse and their understanding of what they needed to do was even sparser. It was a pity that the forum that the Government established was not established at least two years before it was put together, because a great deal more work could have been done by the industry. All the members of the forum came from the Chartered Institution, the ESA. All the interested parties together could have done so much more to have provided the Government with the information it needed to have made better plans. The fact is 16 July was seen by many people to herald a major change. I am not only the Treasurer of the Institution, I am also a major operator of hazardous waste treatment plants, and I can tell you that the only change that I noticed between 16 and 17 July was that I handled less hazardous waste for treatment on 17 July than I did on 16 July. That should not have been the case, I should have been seeing more, but I did not, I saw less, and it less has remained from that day to this. Q5 Chairman: When we did our last report into this we got the usual ministerial reassurances ‑ as they say, "Everything will be all right on the night" ‑ and I was in the House last week, or the week before last, for Defra questions and I seem to recall questions of waste mountains, of hazardous waste being discussed and the Minister looked with distain on those who raised any question. Everything, according to him, was absolutely fantastic. How is it that, in spite of the run in we had to this, the information does not seem to have got through to the practitioners? Give us a flavour about what the current situation is? Mr Hewitt: I think the information has got through to the practitioners. If you mean the people within the waste sector who operate waste management facilities, the message has got through to them. The question that I would ask - and I am not asking this of you, I would ask the Government ‑ is if you anticipated a crisis arising post 16 July and that is what you put in place the hazardous waste forum for, then what happened to the crisis post 16 July? If two million tons of waste was going to be displaced from landfill by co‑disposal, and we have to remember what co‑disposal and the Landfill Directive is all about. It is designed, as is the Government's waste strategy, to move waste away from being disposed to landfill to other means. Also, there is a little phrase contained within the Directive which says, "All waste must be pre‑treated prior to disposal." We could spend many hours talking about what you mean by "pre‑treatment", but I think most of us have a very good grasp of what that means. If this two million tons of waste was being displaced from landfill by the Directive, plus another million tons is likely to occur because of the imposition of the European Waste Catalogue - that is three million tons of waste - in theory, if not in practice, that would all need to be pre‑treated prior to disposal. Therefore, I should have seen trucks queuing up outside my plant; I should have seen the amount of drums I treat every day going up. Why is it that since that time I have seen 30 per cent less drums than I did the day before? The reason is that most of that waste is going to landfill. It is going where it went to and where it is not supposed to be going to, and the question mark about it is how much of it is being properly pre‑treated before it goes there? Q6 Chairman: That, I presume, raises the question that when vehicles with this material present there are not people of sufficient qualification to say, "No, you cannot bring that here." Is it as practical a problem as that? Mr Hewitt: I think that depends much upon the regime. If a landfill operator is responsibly relying upon the information he has been provided with as to the mechanism of treatment for that material before it gets to his gates and he is relying upon it reasonably so, then he will perhaps accept that the material has been treated, but much of it cannot have been. If you look at the amount of treatment capacity in the country, one of the issues that the forum was established to approach was that paucity of treatment facilities and how they were going to encourage people like myself to invest more money in more facilities. The answer to that was: "If I see the waste, I will in invest in the facilities. If I do not, I will not because what I have got already will be over invested", and that is the case I have. The reality is that this waste now goes to landfill, much of it in an untreated condition, and the basis upon which it goes there must be questionable. If that was the means of avoiding a crisis, then it has been avoided, but in reality the problem is still there. I go back to the two tenets that we are looking at: one is that all waste should be pre‑treated ‑ and, as I said, we could debate the mechanism, and I am open to that debate ‑ the second one is that the whole purpose of the Landfill Directive and the co‑disposal ban in itself was to move waste away from landfill, not to it. It seems to me we have achieved exactly the reverse. If that is avoiding a crisis successfully, I have to congratulate the people who thought that that is what they were going to do. Q7 Mr Mitchell: You said we know what pre‑treatment is. I do not. Is it expensive? Mr Hewitt: It varies greatly. Some wastes which are very hazardous require a great deal of pre‑treatment and a lot of thought about before it happens. Other material ‑ and I do it every day - can be treated from a hazardous condition to a non‑hazardous condition so it can go to non-hazardous landfill without any problems, but I think the point that needs to be stressed here is this. The real argument was about two things: the shortage of hazardous waste landfill, because there would not be enough sites permitted, and the shortage of treatment facilities. If you add those two things together, you have, in theory, a mountain. If that mountain was going to be going anywhere, it would have to be pre‑treated before it went there. It would have to go through plants like mine to get to non-hazardous landfill sites. That cannot be the case: because I could easily take another 200 tons a day for treatment for that to happen, but it is not arriving. It must be going to sites without adequate pre‑treatment. It may be that the originators of that waste can satisfy the receiving site that the material is acceptable - the test will be "Is it acceptable?" - and, I suppose, the end part of that is this. Unfortunately the Waste Acceptance Criteria does not come into being for non-hazardous sites until 2007 at the earliest. For hazardous sites it is now. So those non-hazardous sites can go on taking that kind of waste way into the future. If it is pre‑treated properly, there is no question. If it is not, there is a big issue there. Q8 Paddy Tipping: You mentioned a few moments ago about the Hazardous Waste Forum and your evidence describes the Hazardous Waste Forum as a partial success. Could you take me through what the success was, what the failure has been? I got the impression it was set up far too late and may be that the voice of the private sector was not being listened to earlier? Mr Hewitt: I think the sadness about it was that it was set up too late. I think there were a lot of people on that forum with a great deal experience, both from within this country and outside. I have operated waste management in the United States, Europe, all over the world, so there is a great deal of experience to be taken, not just from me, but from others. I think the bony fingers of caution were raised that, if we did not plan properly, there would be issues of misdescription, misrouting, hazard and possibly environmental damage that would be to nobody's credit at the end of the day. A great deal of good work was done ‑ the document I am looking at here was a report on treatment capacity available - but I do not think it was used properly. It was not considered adequately and it was not used properly, and you began to feel that what we were sitting here doing was arriving at an answer that was already pre‑thought out, that we were trying to give everybody a comfort feeling that this crisis was going to be averted; but, if you did the arithmetic, the analysis and you spent any time in the business, it was obvious to anybody that if you had six million tons of hazardous waste prior to 16 July you have got at least that posted. There is an argument that a lot of producers over‑classified waste because the economics prior to the ban meant that you could send hazardous and non-hazardous to the same place at virtually the same price, so they over classified; but even if you factored that out, and a lot of other percentages too, you still arrive at today being unable to account for at least 750,000 tons, probably well over a million tons, of hazardous waste. We cannot account for it. Where is it? Q9 Paddy Tipping: Let us stick with the process for the minute. I think you used the phrase "the bony fingers of caution". Whose fingers are they? Who is being cautious? Is it the ESA ‑ Steve Lee knows all about that ‑ or is it Defra itself? Who has put the mockers on this? Mr Hewitt: The ESA did. The Environmental Services Association was very voluble in its views. Their members made clear their reservations and their concerns, we did at the CIWM and so did many other members. The consultants employed to produce information said the same things. Q10 Paddy Tipping: Who was saying, "There is a problem"? Who was not taking you seriously? That is what I am getting at? Mr Hewitt: I think that the Agency were concerned but came into the piece with everybody else too late to do it, and, I have to say, since 16 July and discussions with them and debate about the issues, I think they have understood there is a problem here and have set about a responsible programme of measurement, audit, tracking in order to get to grips with it. My criticism, I think, sits with Defra in that they were the originators of the forum, and I think they should have listened much more carefully to the words that were being spoken, to the concerns that were being levied and the facts that were being put before them that, if this was not handled properly, we had enough experience. In August 2002 the ban on corrosive and liquid waste to landfill came to pass. I saw that mountain of waste outside my sites for two months. It disappeared. Where did it go? It went back to landfill, but it should not be going back to landfill; that material was not being treated and it was not magicked away anywhere. We already had enough examples of what could go wrong if you did not have the policing and the control mechanisms there. That was not taken sufficient notice of. Time and time again we raised those and other points. Q11 Paddy Tipping: What you are telling me is that people in the industry knew of the problems and often knew the solutions, and I think you said very clearly that Defra did not take any notice. What is the lesson to be learned on this? Most of our environment legislation is now driven from the EU. If you were to look back over this episode, how would you use the knowledge, the learning that we have had about future EU legislation? How can we implement it in the UK more effectively and more efficiently? Mr Hewitt: I think we need to get the interested parties together much earlier. Where there are issues in investment for future technologies ‑ that is people like myself being encouraged to make that investment ‑ we need to be very certain that the economic parameters will be available. We do not want a situation where the Environment Agency is used as some sort of fifth power within the economic balance of the way that waste management works. I think that is where the Environment Agency has been put by the way this whole process has not worked. So, getting people together much earlier, I think listening, not just sitting there and taking notes but listening to what is being said, and being prepared to work together constructively. We are not all right all the time, we can all be wrong, but working together constructively in order to deal with the issues when they occur, but having a policy and intending to tell people that that is going to work so that other people in the waste industry ‑ the brokers, the transporters, the transfer stations ‑ the other people involved who understand that this policy, this directive, must be obeyed and the parameters of how it is going to be obeyed are laid out and put there early. The delay in the promulgation of the hazardous waste regulations is a big mistake. The fact that the Waste Acceptance Criteria was not brought in last July is a big mistake. We should bring these things in early, we should plan to bring them in early and we should make them effective and work. Q12 Paddy Tipping: So early decisions will help long‑term private sector investment? Mr Hewitt: Yes, and working together. Q13 Paddy Tipping: You are saying that there is not enough clarity and so you cannot do that? Mr Hewitt: Correct. Q14 Chairman: Before I bring in David Drew, what were the reasons given for the delay and did you think they were valid? Mr Hewitt: I do not think enough reasons were given for the delay. The delay appeared to me to be nothing more than a wasted passage of time. I am sorry to sound so accusatory about it, but there were views about resources and staff and legal people and drafting resources, and so on, but anybody used to doing things to critical paths and building projects and making them work knows that you commit resources to overcome things when you know there is a necessity for something to happen. If you have convinced yourself that that necessity perhaps can be avoided or the crisis around it is not going to arise, you can take a laid‑back view, but, in my view, not enough emphasis was placed upon the need to get these things in place. It was almost as if it was going to be all right on the night. It has not been all right on the night, and unless they are put in place one cannot have an effective regulatory structure. We cannot ask the Environment Agency to regulate if the structure to regulate against is not there. Q15 Mr Drew: It is that very point that I want to take up. Obviously in the previous inquiries that we have undertaken the criticism of the industry has often been that the civil servants that they have been operating with have not had sufficient grasp of the detail or knowledge of the industry to be able to engage in a sufficient level of rigorous debate so that we can get appropriate solutions. Is there any evidence that this is improving, and, if it is not improving, what message should we be taking to Defra to try to get it to improve? Mr Hewitt: I have been in this business over 30 years and I can look at Defra, DOE, through all of its developments over that period of time. It would be fair to say that the resources that the Government department has in the shape of Defra now are far less than they were 25 years ago. The way that the industry worked with the then DOE, or whatever it might have been called at the time, I think was different. I think it was more rapid and I think it was more productive. I think they are short of resources. Defra is inadequately resourced for the job it needs to do. Maybe there is an issue of management for those resources, I cannot say ‑ I am not responsible for that ‑ but I believe they are short of the necessary people, and it has been that way since the establishment of the Agency. 1996, I think, was the big moment in time when the Defra resources, or DOE as it was then, shrank, and they have never been replaced. I think it would be a fair comment to say from their side that they do not have sufficient resources, and they should have. Q16 Mr Drew: Can I parallel my earlier question with one to do with the Environment Agency? Have they got a better calibre of people, have they got more understanding of what is happening in the field, or are they too remote to really be able to do this job effectively, which is basically to be able to leap from the front to take people with them? Mr Hewitt: My personal view is the Agency needs more resources; it needs more policemen. I think it has been a mistake. For example, the landfill tax has disappeared back into the Chancellor's pocket. I would like to see a big chunk of that given to the Agency to fund the resources it needs to police waste management in particular, and hazardous waste would be one of those items. Initially when we started the discussions, particularly in the forum, the Agency were somewhat behind in understanding the size of the problem and actually appreciating the kind of malpractice that has gone on in this particular sector. It has caught up with that. It has taken the issue on and it is developing the policies. I suspect had they more resources to have done that with, particularly in the field in policing, then they would be a lot more successful more quickly than they possibly can be. I think there is another aspect to Agency regulation, and that is that they should be encouraged to be less tick‑boxing and more measuring. There is a big difference between those two things. I think effective regulation is about measuring and less tick‑boxing. I think that is the way these kinds of organisations tend to grow over a period of time, and I guess they will see the need to change that but I think it is needed in this instance. Q17 Mr Mitchell: You gave us quite a high estimate of three‑quarters of a million tons of hazardous waste disappearing. One of the highest ones we have had. It is a nightmare vision actually? Mr Hewitt: I am sorry. Q18 Mr Mitchell: I said it is a nightmare vision: three‑quarters of a million tons being driven around the country in lorries which has disappeared. I wonder how much has gone into fly-tipping. The evidence of increased fly-tipping is all around. Certainly whenever I venture into the country, which is rare, you see quite a lot of dumped stuff. The Clean Streets organisation in Grimsby tells us there is more fly-tipping, and it must be going on on a scale because it has even reached the Archers! Even they have had fly-tipping. How much of this has gone into fly-tipping prosecutions? Mr Hewitt: I do not believe that we are seeing a very high level of fly-tipping of hazardous waste. That we have not seen. I know it was anticipated or worried about, but we have not actually seen that. I do not think that is where this waste is going. It is not being fly-tipped in ditches or in pieces of waste ground. There may be a little of that, but it is not huge. I would be interested to hear Steve's view in a moment on that, but I do not think it is huge. I think this waste is going into landfill sites, and it is going misrouted, misdescribed and not pre-treated. Q19 Mr Mitchell: And mixed in with non-hazardous waste? Mr Hewitt: Oh, yes. Q20 Mr Mitchell: It would be nice to hear from somebody apart from the Treasurer, who seems to do all the talking for the organisation? Mr Lee: Fly-tipping is one of my favourite topics. I think the Environment Agency will tell you, and you will no doubt ask them when they are here in a few weeks time, hazardous waste fly-tipping does not seem to have risen dramatically after July 2004. It has always been there. It is a low, but still important, level with no real change across the banning co‑disposal. Tons of hazardous waste is missing, and there are some good reasons why hazardous waste might not be out there in the market at the minute. Some of the stuff that was consigned as special waste was, frankly, never special in the first place. It was done on a precautionary basis. It was cheap, it was a good way of tracking where your waste went to; it was never special. Some of it has been designed out of people's processes already. They do not want the added administration costs of having to manage hazardous waste in the future, so they have changed from solvent‑based paint to water paint. Great stuff! Some were subject to a clear out. There is no doubt about that. The regulators report to us a dramatic increase in the amount of special waste that was consigned before the end of co‑disposal and, not surprisingly, there was a quiet period immediately afterwards. Some people are holding their breath. Some people are stock‑piling special waste, hoping that some solution will come out of the woodwork. There are all sorts of reasons why the downturn in the market could be anticipated and explained away. Our concern is does that explain away all of the difference that we are seeing in the hazardous waste market? There is a concern that people are misdescribing waste, or illegally treating it, or illegally mixing it with non-hazardous waste, and that is where we need confirmation back from the regulator. We need them to tell us whether the missing tons are there for good reasons or illegal reasons, and you will want to explore that with them. Q21 Joan Ruddock: I was going to ask a number of questions which Steve Lee has just about answered already, I think, in what he has been saying. Just on the issue of the Environment Agency, clearly Mr Hewitt said that they should have more resources and thought that they could do more, and all the rest of it, but what are they currently doing? You say that they were late in the game, but what are they currently doing? Have there been prosecutions? Are you aware of real actions by the Environment Agency in respect of that which has disappeared going, presumably, into landfill hazardous waste? Mr Lee: I think I can confirm that if they had found something that was of great concern to them and they were considering prosecution or other enforcement actions, they would not tell me. In a classic way they would have to keep that to themselves. What I am satisfied that they are doing is they are trying‑‑‑ Q22 Joan Ruddock: Through your membership I imagine you hear of inspections happening? Mr Lee: Yes, there is an increased level of activity by the Agency. We know they are prioritising where they put their effort. They are trying to think what are the most important waste types they should try and track; what are the most important sites or types of operator that they should be concentrating on? I know that they have done a lot of targeted inspections of those sorts of people. The big question is, out of that targeted activity, are they finding things that they are deeply unhappy about? Are they considering prosecution action? Again, that is something that you will have to ask of the Agency. I do warn you that if they are finding something that they want to consider for prosecution, they may well be not inclined to tell you either, and they have to do that for good reasons. Q23 Joan Ruddock: You are suggesting that there is not yet evidence of them taking action. This is quite mysterious, is it not? You are saying to us you think that there is a lot of inappropriate material definitely going into landfill which is either untreated, and therefore not safe for landfill, or remaining hazardous and should not be put in landfill, but you are seeing no action being taken from the industry? Mr Hewitt: No, I think we are seeing activity by them in increased site audits, stopping of vehicles, inquiries of producers as to what material they are producing and what their pre‑treatment is before it has left their site and the classification they are giving it before it leaves their site. In treatment plants such as mine they inspect us to find out what we do, what our pre‑analysis and post‑analysis is, how we justify saying that the material is non-hazardous or hazardous when we have treated it. No, I think there is a very high level of activity now by the Agency. Q24 Joan Ruddock: But at the moment none of us know whether they are finding anything? Mr Lee: I think that is a good summary. We can see activity. What I cannot tell you is whether that has been turned into legal actions. Q25 Joan Ruddock: Do you think that activity short of legal actions would change behaviour? Mr Lee: Yes. Mr Hewitt: Steve touched upon two points which I think are important, and that is what philosophy is being used by the transfer stations and other operators in how they are handling this material? What level of treatment are they putting upon it? They are not, generally speaking, themselves rated to carry out treatment; so if they are sorting waste what do they mean by "sorting"? Sorting is a recognised means of reducing the hazard of a particular load, but you can appreciate that, if I am not applying any physical change or chemical change and I just separate those two things, I have got some material here that is still hazardous and some that is non-hazardous. What happens to this piece that is still hazardous? How is that then dealt with? The mere separation of it does not change its hazardous nature. It is also the way that it then gets described. Are they illegally mixing materials at those sites? All of those things need to be ascertained by the Agency and the message of them doing that by audit, by inspection, going back to those operators and being very clear that this is not acceptable practice ‑ whether they are going to be prosecuted or not it is not acceptable practice ‑ starts to filter through to the industry that this has got to be handled differently. Q26 Joan Ruddock: One of the things you say is that, apart from going into landfills illegally, there may be stock‑piling by manufacturers. How widespread do you think that is and how safe do you think it is? Mr Hewitt: The days of large quantities of hazardous waste being produced by big operators have gone. I can identify that by saying that six years ago probably every day one of my plants would take eight or nine loads of 80 drums each from single manufacturers. Most of those loads are made up by what we call "milk rounds" ‑ they pick up ten here, ten somewhere else, ten somewhere else ‑ and it is the SMEs that now produce a large amount of this waste. Their resources for stock piling are few. Although stock-piling will have gone on, I do not believe it has been a huge activity. We will not find a million tons has been stock‑piled somewhere. Q27 Joan Ruddock: So designing out and stock‑piling probably do not account for much of this three‑quarters of a million tons. Is that correct? Mr Hewitt: No. Minimalisation and avoidance probably was a ten, maybe 20 per cent exercise. Reclassification may be another ten to 20 per cent, but when you add up the numbers you still come back to three‑quarters of a million to a million tons is going somewhere, and it is not going where it should be going to. Q28 Mr Lepper: Can I clarify one thing about the Waste Acceptance Criteria? Mr Hewitt, you talk about 2007, not 2005? Mr Hewitt: No, that is for hazardous sites. It is a bizarre situation that hazardous sites from next year (2005) must practise the Hazardous Waste Acceptance criteria. For non-hazardous sites it does not come into effect until 2007 at the earliest. Q29 Mr Lepper: Your view, from what you said earlier, was that more coherence would have been achieved by running those things together? Mr Hewitt: If I was asked what my practical view would be: firstly, they should both have happened on the same day to make any logical sense of waste management, and, secondly, the regulations behind them should have come into effect on the same day as well. This business of these things being separated by time just creates bigger problems. It does not take them away. Q30 Mr Lepper: Let us have a look at what comes into force in July next year. It is 16 July next year, is it not, for the Waste Acceptance Criteria and the Hazardous Waste Directive? Mr Hewitt: Yes. Q31 Mr Lepper: How are we doing on planning to meet that date from what you have told us so far? Mr Hewitt: We are still waiting for clarifications related to WAC and we are still waiting for the regulations. Q32 Mr Lepper: "Clarifications" ‑ can you expand on that a little more? Mr Lee: There is a lot more work that needs to be done. We need regulations. The fact we are waiting for amendment regulations from Defra that will amend their 2002 Regulations and their 2004 Regulations gives you some idea of how complex the law, even just around the Landfill Directive is becoming. We need technical guidance from the regulators to tell us how the analytical process is to be done to sample and analyse wastes. We need guidance from the Environment Agency as to what treatment is and what is adequate treatment for waste to be able to go into landfill. All of that needs to be in place in time for the waste producing and waste management industries to react to it in time for July 2005. Taking the kindest view of it, if Defra are to consult on their amendment regulations, let us say, in November, that means we can anticipate the regulations being ready for issue in March or April 2005. Coupled with that, we need a lot more technical guidance from the regulator. That still leaves waste producers and waste managers with surprisingly little time to make sure that they have looked at their wastes; they have looked at their analyses; they have looked at their protocols in time to make sure that they are ready to ensure that the right wastes go to the right sites in July 2005. As ever, time is tight. Q33 Mr Lepper: That was a charitable timescale you were putting forward there, I think. Is there any sign at the moment of that kind of timescale that you have just outlined, tight though it is, being met? Mr Lee: I have given up being optimistic about the appearance date of consultations and regulations, but my understanding is that Defra intend to start the consultation pre Christmas, maybe late November, but it is not in my gift to tell you when that will happen. Q34 Mr Lepper: But without the technical guidance that you have also referred to, presumably it is very difficult for those involved in the industry to know‑‑‑ Am I being naive in saying it is too difficult for them to know what investment they need to be putting into various processes of treatments? Mr Lee: Yes, and, of course, the technical guidance really ought to be guided by the regulations; things ought to fall in place sequentially. Q35 Mr Lepper: You said you are not being optimistic, but let us look forward. What situation are we going to be faced with on 16 July next year, do you think? Are we going to have more hazardous waste trundling around the countryside being stock‑piled in the way in which you have suggested? Mr Lee: I can guarantee you that there will be more hazardous waste simply because of the implementation of the Hazardous Waste Directive at the same time, which will bring some more materials into the definition, a lot more oily wastes, florescent light tubes, more materials like that. They will not increase the tonnage dramatically, but they will dramatically increase the number of businesses which produce hazardous wastes; so that will be an important element. The question you are asking me is whether in response to the introduction of the Waste Acceptance Criteria there will be a lot more homeless hazardous waste? Q36 Mr Lepper: That is it. Mr Lee: Of course, that is the $64,000 question. I cannot answer it for you. I dearly hope that there will not be, but that is one thing that I would want to press on the Environment Agency and Defra. They have to make that their number one priority. If there are to be homeless hazardous wastes they have to be clearly identified and we have to make sure that they are not misdescribed, illegally mixed or otherwise sneaked through the system. Q37 Mr Lepper: From what you have been telling us this afternoon, would it be true to say that you, as representatives of part of the industry, and other industry representatives have been pressing governments strongly on these issues for a considerable time? Mr Hewitt: Very strongly, yes. I have no idea what the technical guidance related to the Waste Acceptance Criteria that affects my plants will be next July. I can only assume that the practice that I now see going on will continue post next July. Q38 Mr Lepper: Is the example of what is happening in other European countries any guidance to you in the absence of anything coming from Defra? Mr Hewitt: You mean in other European countries? Q39 Mr Lepper: European countries, yes? Mr Hewitt: They, of course, took a different path some 20 years ago. If you look at France, the value of the waste management industry in France is three times what it is here. They have many more incinerators, many more treatment plants. They took the decision many years ago that they would treat waste before it was disposed of, and, of course, have far fewer landfills and they are differently orientated. It is a very different structure there to here. We are 20 years behind that. Q40 Paddy Tipping: What is the problem? Why do we not give you this guidance? Why do they not tell you what to do? You lads are in the industry. You know what is what. You know how to do it. Why can we not sort it? Mr Hewitt: It is an excellent question. Q41 Paddy Tipping: What is the answer? Mr Hewitt: I wish I knew. Q42 Paddy Tipping: What do you think it is? Mr Hewitt: What do I think is the reason they do not do it? Q43 Paddy Tipping: Yes? Mr Hewitt: It is very hard to get behind the thinking of people or organisations that do not see timescales in the same way as you do. They obviously see different timescales. They perhaps do not see the same imperatives. Maybe it is an issue of shortage of staff - it is very difficult to say - but you can be certain that our request for this action has become more vociferous at each meeting. At the next meeting of the Hazardous Waste Forum on 24 November you can be sure that I will be saying what I have said here today but in even stronger terms. Q44 Paddy Tipping: Is it to do with legal liabilities maybe? Mr Hewitt: No, I cannot see that. Mr Lee: I would not have said so. In terms of the technical guidance, it should not be underestimated how technical some of it is; how much more complicated it is going to get. Let us take an example: so‑called monolithic waste ‑ hazardous waste that comes in a sizable lump. It is going to depend on a test that might take 60 days to complete, with some really heavyweight science behind it as to how rapidly hazardous materials might be leached out of this block of hazardous waste. There is some heavyweight science behind it - it does not happen overnight - but, much more importantly for me, just because the science is tricky behind it, I do not think I have ever met one single organisation that has all of the understanding, all of the skills or all of the information that is needed to make these very complex implementations work. I think Roger is absolutely right: one of the keys to success is co‑working. The industry has a lot of expertise and information that needs to be played in; so has the regulator; so has Defra; so have the waste producers. It would have been much better if the co‑working that has been done through the Hazardous Waste Forum had been started earlier. I wish it had been started a year earlier; even better if it had been two years earlier. I have to tell you, if I ruled the world, I would have liked something like the Hazardous Waste Forum to have existed in some form maybe ten years ago to make sure that the inputs of information and the opportunity to do work between different partners could have been started at the discussion phase of the Directive rather than the late stages of its implementation. Let us recognise that that needs to be done and let us do it as early as possible. Q45 Paddy Tipping: Are we making it too difficult? It seems simple to me, disposal of waste. I do not understand some of the terms you are using, but this is an area of public policy. We ought to be able to understand this, ought we not? Mr Hewitt: I wish it was simple. I have been working in the industry now for something like 25 years and it gets more and more complex. Yes, there is a desire to make things as simple as possible. Simplicity means that compliance should be relatively straightforward; so it is something that we should all strive for. Unfortunately, over‑simplification means that people are puzzled as to how the rules operate in their particular circumstances, what the standards are for their particular waste. So, try as hard as we all might to keep things as simple as possible, I think they inevitably become technical and complex, but it is a good end. Q46 David Taylor: Leicestershire is an area where there is a great deal of road stone, gravel, clay and coal; and it has produced large number of holes over the years. We have a direct interest in the Landfill Directive in terms of reducing the amount that goes to landfill, and, particularly the area that I want to examine now, driving up the rate of recycling for biodegradable municipal waste. We were in the converse position of having the direct disadvantage of so many landfill sites and yet, as an authority, being so poorly funded that we were not able to recycle much ourselves. Why do you think there is such a range of success rates amongst English local authorities in terms of recycling? You refer to it in your evidence, and the Government produce statistics frequently on this and they cover an enormous spectrum? Mr Murphy: Another very good question. If we had the answer to that we would solve many dilemmas. It is a function of many things - investment, being willing to undertake some of the recycling activities - and it is true to say that some adjoining authorities are far better at recycling than others, bizarrely. Perhaps that is through funding and a political will at an early stage. We do see that there are some good hotspots of recycling activity amongst local authorities through investment, through public awareness, which is crucial, and the history of recycling and feeding that information back to the public. Coupled with composting and awareness-raising, this is not only allowing authorities to meet their recycling targets but also contributing to their biodegradable diversion from landfill, and we see that the two things are crucial. Unfortunately, whilst some authorities are at an exponential phase and recycling large amounts proportionally of their household waste, municipal waste, they are going to reach that lag phase, and that will compromise their ability to divert the amounts of biodegradable waste from landfill to meet their targets. Q47 David Taylor: Two of the leading authorities happen to be Midlands' authorities that I know moderately well, Daventry and Lichfield. I think they would be described as moderately well to do, leafy, middle‑class areas. Is there a social element to the likely success rates on recycling? The Government regularly state that they have put an extra £100 million into providing extra recycling facilities because some of the very urban areas are finding it extraordinarily hard to escape from single figure percentages in terms of recycling. Do you have any tips as to how we can avoid our tips? Mr Murphy: It certainly seems to be, to some extent, socially and economically related. I live in the adjoining authority to Daventry, again another wealthy authority, but nowhere reaching the recycling targets that has Daventry reached. There is no reason why they should not do; it is a matter of political will and investment. It can happen. The other authority on the other side of Daventry is significantly below that, but perhaps very differently structured in terms of its economic capacity. There is no simple answer to this. It is public awareness raising and public involvement, and the recent investment into the work of WRAP and the advertising campaign on the TV should help to do this. Q48 David Taylor: Education and cultural change will take a lot longer and carry us well beyond the expected dates for higher and higher targets for recycling. We are never going to catch up, are we, on that basis? Mr Murphy: There are some serious warning signals at the moment. We can reach the early figures. With the kind of investment in local authorities we are getting from Defra, to some extent political will and public involvement, we can reach the early targets. The latter targets will be very difficult to reach through that recycling and composting. Q49 Chairman: Before Mr Simpson continues our line of questioning, can I ask for a word of explanation. In your evidence you talk about the "Landfill Allowances Trading Scheme". What is it and how does it work? Mr Murphy: It is a system introduced under the Waste Emissions Trading Directive to encourage local authorities to contribute to the Landfill Directive through diverting biodegradable waste away from landfill. They have targets over a period to reduce 35 per cent of biodegradable wastes away from landfill by 2010, and then there are more stringent targets over the remaining 10 years. We have seen that the early targets are achievable through recycling, composting and waste diversion minimisation. The later targets are that much more difficult. The trading part is that disposal authorities will receive a credit if they reach that target early, and they can use that credit in England to trade. The trading will take place in Wales, but, in effect, if they reach the target, they will be able to use that to sell credits to those authorities that are not reaching their own targets. Q50 Chairman: The trading is solely between local authorities? Mr Murphy: Yes. Q51 Chairman: I presume some market place will arise for the trades. Who supervises the operation of this mechanism? Mr Murphy: It will be self‑marketing. Q52 Chairman: Somebody must be the keeper of the numbers? Mr Murphy: Yes, the system will work through waste data flow, which is a piece of data information which rests with Defra. Q53 Chairman: So Defra will have somebody there who has all the numbers coming in, and, at certain points in time, I presume somebody will say, "Here is the end of the year. Those of you who have beaten your targets, here are your credits", and the ones that have not have then got to go and buy something from the ones who have. Is that the way it works? Mr Murphy: That is right, and the market will be set as the market dictates. The only stipulation is that the market cannot reach that figure which would have been the penalty if you do not reach the target of the Landfill Directive. Q54 Chairman: It is an internally driven carrot and stick arrangement to try and encourage good diversionary practice? Mr Murphy: Yes. Q55 Alan Simpson: You are fairly upbeat about the 2010 target. I suppose if you start at the Daventry and Lichfield end of things the picture does not look so bad at all, but at the other end it looks pretty bleak. The figures for Liverpool 1.9 per cent, Sunderland 2.5 per cent, Barking and Dagenham 2.2 per cent, Bolsover 3.2 per cent, Tower Hamlets 3.4 per cent - that is a lot of ground to make up by 2010. Do you seriously feel that you have the basis of such optimism that we are going to meet those 2010 targets? Mr Murphy: Yes. It will be incrementally more difficult for the Daventrys and Lichfields to increase their targets. As I say, they are reaching that line, but to go from 1.7 to three, four, 5.7 does not take a great deal of effort. A great deal of political will, perhaps investment, public understanding and public involvement, but that is in the early part - that is the exponential part - the national publicity campaign, localised campaigns and some of this invested money from Defra, which has been distributed both regionally and also to those more affluent authorities as well as the less affluent authorities. It has been specifically related to those who under-perform as well. I think, yes, the early part, the increase from 1.7 to two, three, 4.7 is attainable. Q56 Alan Simpson: But it is the 35 per cent figure that I am looking at. I understand that the early stages are the ones where there are often the easiest gains, but that still leaves a lot of authorities with a long, long shortfall from that 35 per cent figure by 2010. I have not even got on to the 2013 one yet. I just want to know on what basis you feel optimistic that the authorities that are so far adrift at the moment could actually get there by 2010? Mr Murphy: It is a function of many things - as I say, the composting, the home composting, community composting, recycling, and perhaps achievement technologies, NBT and technologies like this - which will help bridge that gap. It is not going to be easy, but there is a willingness and there is an investment, I feel, from Defra into doing this. Q57 Alan Simpson: Taking it on then to the 2013 targets that you feel more sanguine about, what have we got to do to reach those targets that we are not doing now? What do we need in government programmes that would allow us to be serious about not only setting those targets but hitting the 50 per cent target? Mr Murphy: It is the investment in the newer technologies, the technologies which are being tested now - the pyrolysis classification, NBT plants, anaerobic digestion - which are alternatives to landfill, which will treat the other wastes prior to it being disposed of as some inert material back to landfill. So we have got the established at home, kerbside recycling and then the new technologies, and the residual will go to landfill and that gap will be filled by these new technologies. Q58 Alan Simpson: Where are we in those alternative new technologies? You just trailed a number of them past us, but where are we in practical terms? If as a Committee we were wanting to look at this on the ground, is that to be found in Project Integra, which you have mentioned, in Hampshire? Mr Murphy: No, I think I said earlier, we are behind our European partners here. These are technologies which are used overseas for waste material and they are new technologies in that they are new to waste materials. They are in place for other industrial processes, but we are talking about being new to waste. Defra has a significant programme, a waste implementation programme, and they are investing a lot into the new technologies, pilot plants, investments, research, database and energy education programmes all linked to these new technologies, because we need to inform and educate not only that these technologies are out there but what they can do and how much they cost, their comparative cost, and then we need to get them in place. There is still that gap, but there is a lot of work being done on explaining the value and the input of these projects into an integrated system. Q59 Alan Simpson: Can I just push you on that because it is great that Defra is doing that investment in the research now, but you said that the actual implementation of alternative treatment technologies is to be found elsewhere. Are we at the point at which we can say, "Look, there are X, Y and Z countries who are already putting this into practice and these are the technologies that are seen to work"? We do not need to ask Defra to reinvent the wheel on this, but we need them to put the money into the investment programme. I am just worried about the lead-through time between now and 2013. If you are saying that we are just at the research stage, I do not know whether I am picking it up from your body language, but would that give us a timescale for investment in implementation that we have got to have for meeting the 2013 targets? Mr Murphy: There is an added impediment in that these facilities would have to be planned and fit into a planned system. Q60 Alan Simpson: We have not even got through to the political stage of getting approval. Mr Murphy: Well, yes, and I have to say that the planning system is probably an eight-year span, which means the process has to be started now to deliver by 2013 where the pinch point is. Mr Hewitt: We need to create investor confidence. You see, we are talking here of vast sums of money. A lot of this money is going to come from private sector investment, City investment. Now, they will want to see planning timescales that give the ability for real thresholds of return and for the higher rates of return to be achieved. They will want to see pricing structures and they will want to see contracting arrangements with authorities which enable prices to be achieved and returns to be achieved that make those investments worthwhile. We are talking here of very, very large numbers of money and that is going to need to be planned for. Within the timescales we are talking of to achieve the kind of diversion targets we are talking of, that investment is going to happen very rapidly. Some estimates were made some two or three years ago of the overall number and it is probably something like £30-40 billion of investment and it is at least at the rate of £1 billion a year now that needs to be invested. We are talking huge sums of money and for the City, for investors to be putting that cash in, they have got to be absolutely confident of seeing the returns, and I do not believe those structures are there; those financial structures are not there. Q61 Alan Simpson: We are not going to get it, are we? Let's be realistic about this. You are talking about investor confidence now for a planning process where we have not even identified how we would get over the political hurdles of the planning applications that would go in for approval even before investor confidence becomes sensible to hope for, so if that is not going to happen, we need just to have a fairly radical rethink of the other mechanisms that the Government may have to use to address and meet these targets. Presumably we are also talking about waste reduction strategies. Mr Murphy: It goes back to, I think, and Steve will want to add something to this, but it goes back really to some of the points I was making earlier about timescales, planning and working together to achieve things in hazardous waste. I have thought for a long time that we have needed a strategic waste authority to take responsibility for the overall planning of these things and the inception of them. That is the only way that these kind of large-chunk projects, these large-chunk targets are ever going to be achieved. For them to be played around with on a piecemeal basis, as they are now, I think will just ensure that we do not get there rather than we do and with some overarching strategic waste authority, headed up by somebody with a record of actually making things happen rather than saying things that people want to hear, and there is a big difference between those two things, we might stand a chance. That person and that authority get together the interested parties, the contractors, the operators, local government and the investment community around a table and are not afraid, and if there were not ladies present, I would use a stronger term, to kick the backsides to make it happen because that is what you have got to do. Achieving major projects never happens by people having lunch and being kind to each other. It happens by people sitting in rooms and talking about the real issues and finding the solutions, and that is not happening and it will only happen when there is an authority with the responsibility and the will to do it. Q62 Alan Simpson: I used to run a local authority waste disposal company with an incinerator that used to turn household waste into domestic heating for district heating systems. It was very interesting, but I doubt, if we had been seeking planning approval for a project like that now, that we would have stood a cat in hell's chance of getting that approval. Just in relation to incineration, are you effectively saying to us that we have to acknowledge that if we cannot meet the recycling targets from landfill in terms of other technologies, the use of incineration connected to district heating systems, whether you like it or not, is going to be forced on to the agenda to meet those targets? Mr Murphy: Again my colleague will say something on that, but there is a principle of economics and it is iron-clad, and that is supply, and demand determines supply. Now, you have to define a need and fulfil it. You cannot think of the fulfilment and then create the need as that will not work, and recycling is an excellent ambition and they are first-class objectives, but to believe that these targets are going to be reached by recycling is an act of naïve self-delusion. It is going to need other technologies, such as energy from waste, but the basic laws of economics cannot be changed. Nobody will buy a pile of recycled material just because it is a pile of recycled material. They will buy it because they can do something with it. The clever thing is to find the person who is going to do something with it first and then to produce the pile of material. Q63 Paddy Tipping: You mentioned £30-40 billion worth of investment ---- Mr Murphy: Over a long period of time, yes. Q64 Paddy Tipping: Just remind me, most waste disposal companies now are international companies, Alor Setar, for example. Given the complexities you have been talking to us about, the regulatory framework, the scientific work that needs to be done, the planning system, those companies are going to invest elsewhere rather than the UK, are they not? Mr Murphy: I think that is the risk we run. All organisations have investment policies in the way they look at investing money. I am obviously not familiar with those of Alor Setar, Onyx, or any of the other international companies, but I am aware of those I have practised in my own and other large international companies I have worked for and if the analysis says that I can get a return on investment quicker and more profitably and at a better cash rate in another country than I can in this one, then I would be running the risk of getting sacked by my board if I did not go and put the money there rather than here. Q65 Joan Ruddock: I have to say you are all painting a very depressing picture for us, but I think the difficulties of getting incinerators sited are as great as probably getting the other new technologies sited, so I think we are in great difficulties here. I have to say personally that I have my own anaerobic digester, GreenCo, so one can do it oneself. However, to get to more serious points, a lot of people have proposed that if we were to charge households for their waste, and there were differential charges and incentives, that this could make a difference. My own view, and I wonder if you share this, is that until there is an offer from local authorities to collect all the 'recyclets', you cannot begin to punish people if they fail to put their recyclets out. How do you see this area developing? Do you think it is essential and if we got to that point where the offer was there, you can do all your recyclets and, therefore, if you do not, you are punished or whatever, do you think we might end up with more fly-tipping? Mr Lee: I will answer that question and start at the back and work forwards again. Yes, I share a fear, I think, with most people I talk to that as the cost of responsible waste management goes up, so the risk of uncontrolled fly-tipping goes up with it, so whatever it is that we do to try and move us all towards more sustainable materials practice, that has to be tempered by an awareness of the potential downsides and strong local authorities and strong environment agencies to prevent it and to cope with it if it arises, so fly-tipping, for me, is still one of the most potential serious downsides to all of this development. Now, in terms of the role of local authorities and householders in actually helping this waste and materials revolution to happen, it could hardly be more obvious. We depend on individuals being more responsible with their own purchasing decisions, what they do with their own materials as they waste them and we, as a professional institution, one of the reasons why we exist is to use the expertise and experience of our individual members to come together to actually describe for local authorities, for businesses and for individuals what best practice might look like. Actually we have just weighed your Committee Clerk down with three best practice documents produced by the institution, one of which is on what we believe could, and should, happen on direct or incentive-based charges for householders, the second is on what local authorities ought to be doing to put the householders in a position to be able to separate out their wastes, and the third is the issue that Mr Simpson was talking about just now, and that is mechanisms of recovering the energy value from the waste when all of the other valuable materials have already been pulled out. The truth is that recycling and minimisation are going to get us so far and we believe that with the political will, the resources and the stimulated markets to make it happen, local authorities and people can just about make the 2010 targets by recycling and minimising. We think it is pretty clear that some bigger, probably more capital-intensive solutions are necessary to get us beyond 2010 and the sad truth is, and you have put your finger on it already, have you not, that the planning system and the need to get the investment in place means that we need to start making those decisions about how we are going to reach the 2013 targets and beyond, and the decision time is about now, unless we can streamline the systems to get us there, and those systems include the planning strategy development, individual planning permission application decisions and the issuing of regulatory permits by the Environment Agency. All sorts of things need to be there if we want the mechanisms there to treat residual waste after we have minimised and recycled to the maximum. Q66 Joan Ruddock: You have raised a very interesting question which just struck me as you were speaking. If incinerators are only to burn residual waste, that changes the nature of their operation to an extent. It also brings to bear important questions of how they get sufficient tonnage because they would then need to be getting it from a much wider area. I have Selchip in my constituency and that has always been an issue, how to feed that plant, and it is one of the reasons why my local authority has such a very low level of recycling because it was thought ten years or more ago that it was doing the right thing in sending everything to Selchip. Mr Lee: I think what is at the real heart of your question there is the structure of future waste management contracts and not getting locked into practices that you wish you had not done. Q67 Joan Ruddock: But are there not technical issues as well if you only burn residual waste? Mr Lee: Yes, there are technical issues, and predicting the future volume and composition of residual waste is absolutely vital. We can see from energy from waste-based strategies around the British Isles that whilst the volume of energy from waste plants is going down, very often the calorific value of the residual waste is currently going up, so there is a very careful balance to be played here, but I think your point is absolutely crucial, and you need some very thoughtful planning. We are not looking two years ahead, but in these sorts of solutions, we are looking 20 years ahead and we need to make sure that we have got flexible technical fixes and flexible contract arrangements to go with them. Q68 Chairman: I just want to raise one minor question because in terms of the level of the local authority to introduce new collection techniques which are encouraging certainly the waste producer the initial sorting exercise, you have got a combination of capital investment by the local authority, saying, "We'll be the collection system", but the penalty is that it then has every other week disposal and the net result is that wastes build up, the householder becomes disillusioned with the new system, you get untidy waste and you get all kinds of waste going where they should not do. If you are going to invest in it and involve people right the way through the waste chain, have you not got to make certain that, if you are going to have a high level of investment in sophisticated separation equipment, that is backed up by high-frequency collections to keep a high quality of system in place? Mr Lee: There is no one perfect solution. That much is quite clear to us. In putting this best practice guidance together, we have been able to find a large number of good examples that we can point at and all of them operate on different principles. What is clear is that when householders are encouraged and helped to separate their waste, they can actually produce a surprisingly small amount of residual waste. Now, it may be more efficient and effective for the local authority to say, "If we help you to be effective in that way, we might not need to come to pick up your residual waste every week", as it might well not be worth it. On the other hand, there are local authorities who have found that that really is not accepted very well by the householders in their area and they have either elected to stay with weekly collections and some of them have even had to go back to weekly collections. There is no one ideal solution. What is clear is that local authorities need support and they need to learn from each other and they need the skills and resources to put these schemes into place because without them, we are not going to reach the 2010 targets. That much is obvious. Q69 Paddy Tipping: I was interested in the point Mr Lee made a minute ago about not getting locked into long-term contracts. Now, most local authorities are going the PFI route at the moment and the danger of that is that it does lock them into long-term contracts. What advice are you giving in terms of best practice to local authorities around this? Mr Lee: I can confirm that another piece of best practice work being done by the institution with input from all sorts of parties, including waste management operators and local authorities, is some guidance on best practice in developing contracts. It is interesting that you used the word "locked". I suspect that means that I did earlier on and being locked into a contract, there are two ways that you can look at it. Obviously in order to recoup the high capital costs of some of these investments, there has to be a long term to the contract. It does not mean to say that you necessarily want or need to be locked into what becomes an inappropriately constrictive contract. Flexibility has to be the order of the future. Q70 Paddy Tipping: You are confident that you can work flexibility into PFI contracts? Mr Lee: I am convinced it can be done. Q71 Paddy Tipping: Has it been done? Mr Lee: Well, perhaps experience might tell us whether it is being done now. Chairman: Well, upon that very neat piece of footwork, Mr Lee, we will draw our evidence-gathering session to a conclusion. Thank you for the candour of the way that you have answered our questions. I think you have set our inquiry off to an extremely good start, and you have posed some challenging issues which will guide us in our further questioning. Thank you again for your written material and for the time you have spent with us this afternoon. |