4 FINANCING WASTE COLLECTION
60. In his report on Local Government in March 2007,
Sir Michael Lyons identified rising costs of waste management
as one of the central problems facing local authorities in the
short and longer terms. Methods of collection may vary widely
between neighbouring areas, but when it comes to financial pressures,
as Sir Michael noted, "the issues and challenges described
by my case study interviewees showed more consistency than any
other service area."[92]
Sir Michael identified the need to divert waste from landfill
to meet EU directive targets as a key driver of increased waste
management costs. The Government acknowledged the growing cost
pressures in its Waste Strategy for England 2007, noting
the needs to deal with increasing waste arisings, to fund infrastructure
required to divert waste from landfill and to pay increases in
the landfill tax (as set out in Chapter 2 above).[93]
Waste spending by local authorities in England totalled £1.65
billion in 2001-02 and rose to £2.44 billion in 2005-06.
Both the NAO and the LGA report that government modelling suggests
spending will have to reach £4.2 billion by 2013, implying
a 10 per cent annual growth in funding requirements.[94]
61. Several of those who submitted evidence talked
of a growing affordability gap, with Essex Waste Partnership predicting
that waste spending may need to increase by between 50 and 100
per cent over the next two decades.[95]
Essex's Head of Waste and Recycling, Nicola Beach, told us "we
are basically getting waste too cheaply in this country. We do
not pay enough for it, we do not realise the environmental costs
of it. We have a huge affordability gap".[96]
The Minister for Waste drew comparisons between UK and EU spending:
"We spend as a country 0.6 per cent of our GDP on waste management.
That compares with 1 per cent in Germany, 1.2 per cent in the
Netherlands. It is about £120 per household, per year now
compared with an EU average of about £200 per year, per household."[97]
62. Significant increases in waste costs for local
authorities will almost certainly feed into increased council
tax bills for householders. Council tax, contrary to popular perception,
does not in fact pay for household refuse collection: local government
is funded mainly from central government grant, with council tax
making up about a quarter of its financing. The NAO reported that
half the public admit to not knowing how much their waste collection
and disposal costs; of those who thought they did know, the most
popular figure identified was around £200 a year. In fact,
the average is around £75 a year per council tax payer.[98]
Substantial rises in council tax to pay increasing waste costs
are likely to prove politically unpopular.
63. The NAO has also identified one of the biggest
potential pressures on council tax—estimated penalties of
up to £40 million in 2010 and £205 million in 2013 if
EU landfill diversion targets are missed.[99]
The LGA estimates that the latter fine would equate to around
£220 per household.[100]
It also estimated that council tax bills could rise by around
£150 if councils fail to meet the challenges set, and the
then Minister for Local Government and Community Cohesion, Phil
Woolas MP, broadly agreed when we put that figure to him.[101]
64. Finally, several witnesses drew attention to
the specific pressures rural areas face. Chichester District Council
argued that refuse crews can service about 1,000 properties a
day in built-up areas, but only 400 to 600 in more rural areas.[102]
North Dorset District Council amplified the point: "collection
costs in rural districts tend to be above average due to the larger
distances involved in collecting and tipping waste and the dispersed
nature of the population."[103]
Sparse suggested the "rural premium" could be as much
as 90 per cent more than the cost of urban collection.[104]
65. Having identified increasing waste costs as significant,
Sir Michael Lyons made two proposals to ease the pressure. First,
he recommended that the Government allow local authorities to
form joint waste authorities where they wished, in order that
they might benefit from shared costs, efficiency savings and economies
of scale. Secondly, he recommended that the Government permit
local authorities the power to introduce local variable charges
for waste collection if they wished to do so, a practice currently
allowed in most EU countries but illegal in the UK. The Government
has, while not following Sir Michael's recommendations in full,
already acted on both points. Proposals to allow councils to adopt
financial incentives will be covered in the next chapter. The
subsequent chapter will look at moves towards the formal creation
of Joint Waste Authorities.
92 Sir Michael Lyons, Place-shaping: a shared ambition
for the future of local government, March 2007, para. 4.223 Back
93
DEFRA, Waste Strategy for England 2007, p. 80 Back
94
RC 31, National Audit Office memorandum, and RC 40, Local Government
Association memorandum, both printed in vol. II Back
95
RC 13, Essex Waste Management Partnership memorandum, printed
in vol. II Back
96
Q 197 Back
97
Q 249 Back
98
RC 31, National Audit Office memorandum, printed in vol. II Back
99
National Audit Office, Reducing the Reliance on Landfill in
England, HC 1177, June 2006 Back
100
RC 40, Local Government Association memorandum, printed in vol.
II Back
101
Q 249 Back
102
RC 3, Chichester District Council memorandum, printed in vol.
II Back
103
RC 27, North Dorset District Council memorandum, printed in vol.
II Back
104
RC 42, Sparsity Partnership for AuthoritiesDelivering Rural Services
(Sparse) memorandum, printed in vol. II Back
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