Joint Memorandum by the Department for
Communities and Local Government and the Department for Environment,
Food and Rural Affairs
REFUSE COLLECTION
1. Thank you for your letter of 1 November
seeking some further information and clarification of several
points within the Government's response to the Committee's report
on Refuse Collection (Fifth Report of Session 2006-07, HC 536-I).
This is a joint response from Communities and Local Government
and the Department of the Environment, Food and Rural Affairs.
2. As the Committee noted, on 29 October
the Government published a Command Paper for the Climate Change
Bill which set out its intention to provide in the Bill powers
to pilot local authority incentives for household waste minimisation
and recycling.
3. The Bill was introduced in the House
of Lords on Wednesday 14 November, and published in full on Thursday
15 November when the Minister for Waste announced the waste incentives
proposals to Parliament via a Written Statement.
4. At the Annex is a factsheet which provides
more information about waste incentives policy. The factsheet
can also be found on DEFRA's website at: http://www.defra.gov.uk/environment/waste/strategy/incentives/index.htm.[1]
5. In this letter the Committee raises the
issue of what it sees as growing financial pressures on local
authorities. The Government has been working closely with local
authorities during the Comprehensive Spending Review (CSR07) in
order to identify all the pressures over the next three years
and the ways that they can be managed. The pressures from demographic
changes in the area of waste management were one of the priority
areas identified by the Local Government Association.
6. The Government has been able to provide
increases in local government resource Departmental Expenditure
Limit (Del) of 4.2 per cent/3.5 per cent/3.4 per cent over the
CSR period, including £677 million/£853 million/£1,069
million to support PFI projects. To support waste/recycling targets
and reflect the seriousness with which Government takes this issue,
Defra's PFI allocation more than doubles—providing over
£2 billion in the CSR07 period. Local authorities will also
receive Area Based Grant which is a new non ring-fenced general
grant.
7. Specific grants will also be provided
by departments. Details on most grants will be available at the
time of the announcement of the provisional local government finance
settlement.
8. Delivering further efficiency gains is
key to ensuring that local government can meet the pressures they
face over the CSR07 period. The delivery of 3 per cent efficiency
gains each year, in line with the rest of the public sector, will
generate £4.9 billion over the CSR07 period which local authorities
can use to fund the pressures they face from 2008-09 onwards.
So the real terms increase in local government resource Del of
1 per cent a year on average is only part of the picture. The
spending review eases the financial pressures on councils, giving
them greater flexibility to respond to local priorities, to plan
ahead and to find innovative ways of achieving better value for
money.
9. The Committee's letter discusses the
level of the incentive local authorities could set in relation
to a waste incentive scheme. The Government would like to confirm
the Committee's understanding that the £30 figure for a waste
incentive was purely indicative but that similar figures are common
in schemes overseas. The Government would also like to confirm
that it intends to leave local authorities to set their own amounts
for their own schemes. However, the Committee should note firstly
that the pilot authorities must be designated by the Secretary
of State for Environment, Food and Rural Affairs before introducing
a scheme, and secondly that the Government intends to retain a
reserved power to place a cap on the level of incentive at some
point in the future, in exceptional circumstances, should this
be necessary.
10. The Committee asks how councils will
finance a non-revenue-raising incentive scheme, paying for, for
example, costs relating to administration and enforcement. The
Government is proposing non-revenue-raising incentive schemes
because the Government thinks it is important to avoid placing
additional burdens on local residents. Under the proposals which
the Government has put forward, any revenue collected by authorities
through a pilot scheme must be returned to local residents. The
implication of this is that any additional administrative and
enforcement costs relating to the scheme would need to be met
by the authority outside the scheme.
11. A recent research report commissioned
for Defra shows that the benefits of incentive schemes, resulting
from lower levels of waste for disposal, can be sufficient to
outweigh the costs of setting up and running a scheme (including
costs associated with administration and enforcement). The Impact
Assessment which Defra published on 15 November analyses the likely
costs and benefits of the Government's proposal. This modelling
suggests that local authorities will be able to finance administrative
and enforcement costs from the savings which they make through
avoided waste to landfill and treatment. However, the Government
has committed up to £1.5 million per year for three years
to support pilots, and the authorities in question will also be
free to set their own priorities, to pay for short term set up
costs for example. (Both the research report and Impact Assessment
can be found on Defra's website at: http://www.defra.gov.uk/environment/waste/strategy/incentives/index.htm.)
12. The Committee expresses concerns that
residents will perceive an incentive scheme as an additional charge
or tax. Though in effect there will be no new overall burden on
residents and many people will benefit potentially from rebates,
effective communication and consultation with local residents
will be essential to counteracting misapprehensions and delivering
effective local schemes.
13. The Committee may be aware that, in
response to issues raised by the Committee and a number of other
stakeholders during the consultation process, the Government has
taken the decision to allow local authorities to link waste incentives
with council tax, should they wish to do so, subject to the enactment
of the Climate Change Bill.
14. This means that under pure rebate schemes,
residents taking steps to reduce and recycle their waste would
simply receive rebates from council tax, with no residents paying
any extra for the waste they throw away. The Government thinks
it is unlikely that this would be seen as an additional charge
or a tax.
15. Some pilots may wish to supplement rebates
with charges for householders who throw away most. As previously,
any such scheme would need to be revenue neutral, with all revenue
collected being returned to residents through the rebates. Again,
though, local authorities would now be free to make rebates and
charges through the council tax system.
16. In fact, recent polls by Defra and IPSOS
Mori show that a majority of the public agree with schemes which
reward good recyclers and penalise those not making the effort.
17. In the Defra poll, 52 per cent of those
interviewed said they would favour a system that rewarded them
if they recycled everything they could and penalized them if they
did not.
18. The IPSOS Mori poll found that 64 per
cent of people would support their council operating a system
whereby you pay a reduced council tax rate and then get charged
directly for the amount of household rubbish you produce, so that
the more you recycle the less you would pay.
19. Finally, the Committee raises concerns
around the take-up of incentive schemes amongst local authorities.
The Government considers that the pilots will be particularly
important here, allowing the benefits that incentives can deliver
to be tested and demonstrated. This will help inform other local
authorities as well as the Government's future policy making in
this area.
20. It is of course right that the decision
to pilot an incentive scheme is left to the local authority. They
will make that decision on the basis of their own assessment of
costs and benefits. However, the Government considers that, with
the costs of landfill rising, the possibility to reduce waste
for disposal is likely to be a sufficient driver for some local
authorities to come forward with proposals for pilots.
21. The Government shares the Committee's
ambitions to minimise waste and give local authorities the tools
to collect and dispose of waste once generated. The Government
looks forward very much to working with the Committee as it takes
forward important proposals in this area.
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