Government response
1. We criticised the Government for making a "half-hearted
tilt in the direction of charging" householders directly
for the collection of their rubbish. It has since, in the face
of highly negative media coverage, mounted a wholehearted retreat
from even the limited policy outlined last May. (Paragraph 5)
We do not agree with the Committee that this policy
is either "half-hearted" or a "retreat". In
developing the policy on waste incentive schemes since initial
proposals were published last May, the Government has sought to
take account of views expressed in both formal and informal consultation.
The Government would rightly have been criticised had it failed
to do this.
These are new powers for England and piloting is
widely regarded as a sensible approach. It allows us to trial
the schemes and gather high quality evidence before taking a decision
on whether the powers should be made more generally available.
The Government would not be running pilots if it
did not think that the policy could have an important impact on
reducing the amount of waste which goes to landfill. Evidence
from overseas strongly supports this view.
The Government firmly believes that local authorities,
working closely with their communities, are best placed to decide
what will work in their area. This is why it will be up to local
authorities—both during the piloting stage, and if the powers
are rolled out in the future—to decide whether they wish
to run a scheme; and how the scheme should operate.
2. Given the range of experience that already
exists within our EU neighbour states, we question how much additional
information can be gained by operating a mere five pilot schemes
by 2012 in England. (Paragraph 7)
The Government recognises that there is a wealth
of experience within our EU partners and further afield. Research
that has been carried out for Defra includes a comprehensive review
of literature on overseas charging schemes.
However, every country in Europe faces different
issues in relation to waste. The systems they have designed to
address them may not be directly applicable in an English context.
We need to be sure that approaches adopted in England reflect
the lessons learned from schemes which are operating successfully
overseas, but also are consistent with the financial and waste
collection arrangements which operate here, and accommodate the
differing characteristics of our local authorities.
3. We do not believe that allowing only five of
England's waste collection authorities to introduce schemes, covering
four different collection methods, in a mixture of rural and urban
settings, and across the whole country, will provide significant
additional evidence on which to judge whether all authorities
should be able to offer such schemes. (Paragraph 7)
The Government disagrees with this conclusion. We
cannot model every possible scheme in every possible context.
We expect the pilots to provide information that
will both help us with our decisions about roll-out, and help
other local authorities set up their own schemes in due course.
On this basis five pilots represents an appropriate and manageable
basis for us to explore the issues of general significance that
will emerge.
4. We remain to be convinced that incentive, or
charging, schemes, either as currently conceived or as outlined
in the Waste Strategy, would work well in England, but we agree
with the Minister for Waste that "we should not be so afraid
of being able to deliver a proper scheme". (Paragraph 8)
This is precisely the purpose of the pilots. We accept
that some stakeholders are, like the Committee, unconvinced that
there is a place for this sort of arrangement in England but,
as we indicated in December, this lack of consensus should not
be allowed to intimidate us into avoiding innovation.
5. We repeat what we said six months ago: it is
hard to see why any council will want to set up a complicated
charging scheme that earns it no money and risks widespread public
disapproval. The Government's decision to seek only five councils
appears to reflect the understandable reluctance of local authorities
to do so. (Paragraph 11)
All money collected from residents as part of an
incentive scheme must be returned to those participating in the
scheme. This is the principle of revenue neutrality. However,
Government is confident that local authorities will wish to run
pilots on the basis that waste incentive schemes will earn
them money through lower collection and disposal costs as people
reduce the amount of residual waste they throw away. Evidence
from overseas, and modelling work carried out for Defra, supports
this.
In addition, over 80% of respondents to our consultation
supported bringing in these powers
The Committee itself cites in its report opinion
polls, showing that most people approve of systems which reward
good recyclers and punish those who don't make the effort.
Our reason for proceeding on a pilot-basis initially
is to collect high quality evidence. It's not about retreating.
6. Under the Government's initial proposals, any
local authority operating a financial incentive scheme would have
carried the costs of setting up, administering and enforcing it.
For the five pilot schemes, those costs may be paid out of the
£1.5 million a year the Government is providing. As such
support is unlikely to be available to councils in the event of
any national roll-out, we recommend that reports back to Parliament
on the pilots fully reflect the impact those costs would have
had on council budgets and services had the five pilot authorities
been required to pay them themselves. (Paragraph 13)
The Government agrees that costs and savings will
be an important part of any assessment of the pilots and has already
committed in the Climate Change Bill to publish a comprehensive
report on each of the pilots.
If a scheme has received Government funding from
Defra, then that would be taken into account in any review of
the scheme.
Furthermore, the Government is committed to working
with stakeholders to establish success criteria and what areas
the evaluation report should cover. The intention is to publish
this information in advance of the pilots starting.
Modelling carried out for Defra, and based on evidence
from overseas, suggests that local authorities can make net savings
through operating a waste incentive scheme, as a result of their
having less waste to dispose of.
7. The decision to limit the number of schemes
to just five, none starting before April 2009, all running for
three years before Parliament is asked to decide on a national
roll-out, means that financial incentive schemes will have no
discernible effect on local authorities' duty to meet European
Union landfill diversion targets before penalties fall due in
2010 and 2013. (Paragraph 14)
The Climate Change Bill does not require pilots to
run for three years, nor does it require the Government to wait
three years before making a decision on whether to roll out powers
to all local authorities.
It is up to local authorities to come forward with
proposals on how they wish to operate a pilot scheme- including
how long the pilot will run. Once the results of the pilot schemes
have been evaluated a decision will be made on roll out.
It is also important to remember the key long-term
target under the Landfill Directive, which requires us by 2020
to reduce the biodegradable waste we send to landfill by 65%.
Subject to the outcome of the pilots, waste incentives are firmly
positioned to help us reach this 2020 target.
In the shorter term, as shown in Waste Strategy 2007,
there is a strong framework of measures already in place to support
lower levels of landfill, including PFI, packaging regulations,
the Landfill Allowance Trading Scheme and the landfill tax escalator.
8. The decision to cap the amounts that local
authorities may offer their residents as incentives, or charge
them, runs counter to the Government's rhetoric on devolution
and local decision making. (Paragraph 16)
The Government has not capped the level of incentives
or charges under a waste incentive scheme. What the Climate Change
Bill contains is a reserve provision to limit, in exceptional
circumstances, how much a household can be charged in any financial
year. Joan Ruddock told the Communities and Local Government
Select Committee, the Government does not expect to need to use
this power but it exists as an additional protection for residents.
This protection—to be used only in exceptional
circumstances—does not undermine our central belief in local
government's ability to make the right decisions for its local
area.
There is no provision to limit levels of rebates.
9. We believe that the Government is over-optimistic
about the impact charging will have on householders who find themselves
paying more for a service many believe they pay for already through
council tax. (Paragraph 20)
The waste incentive scheme is not about collecting
waste from householders, but about encouraging all of us to recycle
more in order to reduce waste, prior to collection. The Government
believes that the majority of the general public are keen to engage
positively with environmental issues such as the waste incentive
scheme.
These schemes are about incentivising behaviour change
and doing so in a way that doesn't increase the overall burden
on householders. For example,, authorities would be able to introduce
rebate-only schemes. Such schemes would not require householders
to pay extra but would reward those making the effort to reduce
or recycle their waste.
Other types of schemes could require those producing
more non-recycled waste to pay for doing so. But those who take
the opportunity to minimise what they throw away would avoid this
charge. However, overall, all revenue raised in this scheme must
be returned to residents through rebates so authorities will certainly
not be using it to fund the same service twice.
10. If the schemes are as successful as the Government
hopes, then those living in the five pilot areas will benefit
substantially while those who live in the vast majority of collection
authority areas will be unfairly prevented from gaining similar
benefits. On the other hand, individuals in the five pilot areas
who are required to pay significant additional charges for their
failure to meet recycling standards that do not apply in neighbouring
areas are likely to feel unfairly singled out. (Paragraph 21)
Piloting is a well-proven approach to policy-making
which allows a proper evaluation of new ideas, so that a informed
decision can be made on whether to roll out the scheme across
the country.
Obviously, those people outside a pilot area will
not gain any of its benefits, but in the longer term could benefit
from schemes which were devised using best practice from the pilots.
11. We agree with the Minister for Local Government
that allowing authorities who wish to administer any recycling
incentive schemes through council tax is welcome and sensible.
(Paragraph 24)
The Government is pleased to receive this endorsement
from the Committee.
12. It is a matter of considerable concern that
the Minister in charge of the financial incentive pilots appears
not to know whether the charges she intends to introduce are or
are not a tax. (Paragraph 25)
The Minister acknowledges there was some discussion
of this issue at the time. However, as was stated, in practical
terms, charges under a waste reduction scheme would feel very
different to residents from most other taxes. This is because
where an authority levies a charge on certain households who fail
to recycle, it will have to return the money raised by way of
rebates to all other households. This means that many residents
will actually gain from the scheme. Meanwhile, unlike most taxes,
neither the Government nor local authorities would keep any money
to cover costs or to fund general expenditure.
Furthermore, as was also explained to the Committee
at the time, the Office for National Statistics (ONS) has final
responsibility for determining the classification of income (e.g.
as taxation) for the purposes of national accounts. The Government
has since sought to clarify the position in Parliamentary Questions.
The Government will classify income collected under waste incentive
schemes as taxation, in accordance with National Accounts guidelines.
Broadly speaking, this is because the level of charge is not directly
related to the cost of delivering a service, but to incentivising
certain behaviours.
The Government does not accept that residents will
necessarily view charges under a waste reduction scheme as an
additional tax - especially not those who through positive action
on recycling and minimising their waste, benefit from a rebate.
13. In its proposals in the Climate Change Bill,
the Government has:
- limited the number of recycling
incentive schemes to just five local authority areas
- capped the amounts local authorities may offer
as incentives or take in charges
- and delayed any possibility of allowing England-wide
schemes before 2012-13.
This represents a comprehensive retreat. The Government
appears to lack the courage of its previous convictions that local
authorities are best placed to decide what will work in their
own areas and that recycling incentive schemes can contribute
towards a genuine, measurable reduction in the volume of waste
being sent to landfill. (Paragraph 26)
The Government does not believe its actions represent
a retreat, but rather a sensible response to stakeholder concerns
and we believe that local authorities are best placed to make
such decisions.
This is an important new policy for local authorities
as it could achieve significant results, both in environmental
terms and in saving money for the local area. We agree with the
Committee that local authorities should be free to use these powers
if they want to.
14. The Government's retreat has resulted in a
messy compromise that achieves the worst of both worlds—maximum
hostile media coverage for a set of pilot schemes that will have
only limited impact before EU fines fall due in 2010 and 2013.
(Paragraph 27)
All the evidence suggests the UK will achieve its
Landfill diversion targets for 2010 and while the 2013 target
remains challenging there are many new waste treatment facilities
across the country that will come online in time to have the necessary
impact.
Subject to the outcome of the pilots, waste incentives
are firmly positioned, if rolled out, to help us reach the 2020
target to reduce waste to landfill by 65%. We accept that changes
take time, so there is a greater need to start now to ensure incentive
schemes could play a significant role in the long term.
It is important to engage with the public on this
issue. We want to hear their concerns but we also want to explain
fairly the potential benefits of these schemes and to point to
examples overseas.
We continue to believe that the public are keen to
engage positively on environmental issues, including what they
can do to reduce the amount of waste they generate. For example,
as can be seen by polls last year by Defra and IPSOS Mori, the
majority of the public agree with schemes which reward good recyclers
and penalise those not making the effort. Our incentive schemes
fit with this sentiment.
15. We recommend that the Government withdraw
its financial incentive pilot proposals from the Climate Change
Bill and reconsider devolving the power to introduce schemes to
local authorities themselves. They, both in our view and according
to the Government's own rhetoric, are best placed to judge how
refuse should be collected and whether local residents should
be asked to gain incentives by increasing their recycling or to
pay additional charges if they do not. (Paragraph 27)
The Government will not withdraw its financial incentive
pilot proposals from the Climate Change Bill. As mentioned the
waste incentive policy is new and will be piloted before a decision
is made to roll out the scheme. This is a sensible approach. It
allows us to trial the schemes and gather high quality evidence
before taking a decision on whether the powers should be more
generally available.
The Government agrees with the Committee that local
authorities, working closely with their communities, are best
placed to decide what will work in their areas. This is why it
will be up to local authorities—both during the piloting
stage, and if the powers are rolled out in the future—to
decide whether they wish to run a scheme; and how that scheme
should operate.
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