Government has set two types of target for local
authorities to encourage them to divert municipal waste away from
landfill. The first of these are targets for recycling and composting
of household waste, which apply in 2003-04 and 2005-06. The second
type is the number of landfill allowances allocated to each local
authority under the Landfill Allowance Trading Scheme, starting
in April 2005. There are a number of options available to local
authorities to help them recycle and compost more household waste
and to divert increasing quantities of biodegradable municipal
waste away from landfill to meet these obligations.
Most local authorities will make use of a mix
of these options that best meet their local conditions/requirements.
Central Government's role in this is to provide the financial
and other support needed by local authorities. Financial support
is provided through Revenue Support Grant, the Private Finance
Initiative, the Waste Minimisation and Recycling Fund and its
successor the Waste Performance and Efficiency Grant, as well
as through a number of smaller-scale grant schemes. Direct support,
advice and guidance, and assistance in building capacity is available
through the Waste Implementation Programme and the Waste and Resources
Action Programme. This support enables local authorities to draw
up suitable local waste strategies and to meet the goals in those
strategies.
— Waste reduction (eg real nappy initiatives).
— Re-use (eg helping charities to re-use
clothing, footwear and furniture).
— Recycling (eg through segregated kerbside,
bring bank or civic amenity site facilities).
— Composting of green and kitchen waste
(eg through home composting, segregated kerbside or civic amenity
site facilities).
— Energy recovery (eg energy from waste
facilities).
— Stabilisation (removing or reducing the
biodegradable content of waste which is subsequently landfilled)
(eg mechanical, biological and technical (MBT) treatment facilities
to stabilise residual waste).
Our best current estimates are that England will
meet its national target to recycle or compost 30% of household
waste in 2010, and that we will meet our obligations under the
Landfill Directive to divert biodegradable municipal waste from
landfill. Factors that will affect the mix of facilities and technologies
used to recover energy from or stabilise municipal waste which
is not recycled or composted include the outcome of the current
Environment Agency consultation on the outputs from the MBT process,
the waste industry's ability to deliver the facilities demanded
and the extent to which local communities will support energy
recovery facilities.
Defra's current estimates of future municipal waste
management are based on modelling work which is subject to further
change to incorporate developments in our assumptions.
My Minister's confidence in the ability of local
authorities to make progress springs from the distance they have
already travelled in a relatively short time, the seriousness
with which local authorities take these obligations and the support
that has been and will be put in place to help local authorities
achieve the targets. This confidence is underpinned by the policy
levers we have put in place to drive local authority behaviour—the
new landfill tax escalator and the Landfill Allowance Trading
Scheme, both due for introduction in April 2005.
COLLECTION OF
LANDFILL TAX
My apologies to the Committee, but I understand that
HM Customs and Excise (HMCE), who collect the tax on behalf of
the Treasury, do not hold data which breaks down the proportion
of landfill tax paid by specific sectors. HMCE have developed
a model to estimate tax receipts from landfill of municipal waste
based on local authorities' expected response to the policy levers
in place. HM Treasury took these estimates into account in making
decisions on the increase to the Environmental, Protective and
Cultural Services block in Spending Review 2004.
RETURN OF
LANDFILL TAX
TO LOCAL
AUTHORITIES—EPCS
Formula grant (Revenue Support Grant, National Non-Domestic
Rates and Police Grant) provides general funding for local authority
services. It is an un-hypothecated grant and spending decisions
are, as the Committee accepts, a matter for individual authorities.
Formula grant is distributed through Formula Spending Shares.
The Office of the Deputy Prime Minister (ODPM) is responsible
for the formulae underpinning each Formula Spending Share (FSS)
blocks, of which EPCS is one. The EPCS block covers a wide range
of local authority services including waste management, and the
formula used to allocate the block between individual local authorities
is predominantly population driven.
In this year's Spending Review (SR2004) the
Government announced an increase in EPCS FSS block of £888
million by 2007-08 over 2004-05. This increase includes the return
of revenues from the increased landfill tax, fulfilling the Chancellor's
commitment to keep landfill tax increases revenue-neutral to local
authorities. As part of the Spending Review 2004 process, Defra
undertook a modelling exercise to estimate likely total spend
by local authorities on waste management over the Spending Review
period. This analysis was shared with the Local Government Association,
who were broadly supportive. HM Treasury took account of the outputs
of the modelling exercise in taking decisions on the Spending
Review settlement.
In addition, you raised two issues in relation
to funding alternative technologies and the role of PFI. The need
for investment in new technologies is well understood. Confidence
in those technologies is a vital component. That is one reason
why two WIP funding programmes have been launched to encourage
the take up of new technologies in the treatment of biodegradable
municipal waste. The Technology Research & Innovation Fund
(TRIF) will allocate around £2 million to address the current
lack of funding for R&D projects into new technologies. The
Demonstrator Programme will provide some £30 million to help
to establish new waste treatment technologies that require pilot
plants to demonstrate their viability. The programme is intended
to instil confidence and help overcome the perceived risks of
implementing new technologies in England and to provide accurate
and impartial technical, environmental and economic data.
On PFI, an extra £275 million worth of
waste PFI credits were included in the 2004 Spending Review. We
see PFI as one of the best ways to support value-for-money investment
in waste services. Current healthy levels of demand for PFI projects
suggest that many local authorities and funding institutions are
content with the PFI approach. Indeed, projects totalling £1
billion are presently signed or in procurement and a further eight
projects handling over three million tonnes of municipal waste
are in progress.
17 December 2004
