I was hoping to fill this page with a detailed analysis of the budget but Chancellor George Osborne has let me down again. There are a number of environmental measures in the budget but as always not enough of the landfill tax revenue that is generated finds its way back into funding recycling, renewable energy and community schemes. The amount that can be reclaimed from landfill tax payments, known as the Landfill Communities Fund (LCF) is now capped at 5.7% of the landfill tax paid, which is a significant reduction from the 20 % when the tax was first introduced in 1996.
To counter the lack of uptake in the fund, the LCF will be reformed by a government-sector working group. Hopefully they will recommend a wholesale reform of the fund as some of the surplus generated has been siphoned off to the Environment Agency (EA) to tackle waste crime – an extra £4.2 million. I’m not objecting to funding the EA through landfill tax but it should come from the other 94.3% generated rather than the LCF. One could argue that communities will benefit from the extra money spent on fighting waste crime but much of the fly tipping that takes place falls on local councils’ desks so they should also have some funds allocated to clearing grot spots and abandoned sites.
I would hope that the EA have to justify how those additional funds are spent and demonstrate that they are spent on stopping illegal sites rather than targeting easier options such as existing permitted sites. I have been asked by regulatory officers why I am so critical of their approach and I can only reply that when I see consistency, clarity and proportionate regulation will I shut up! Many of the unauthorised operations my clients have reported have not been investigated straight away when reported, which is a constant source of disappointment. Just have a look in the classified pages of your local papers and check out the prices offered for skips and whether those operators have a permit. That will generate enough work and results to make good use of the £4.2 million.
The chancellor also confirmed that the “the standard and lower rates of Landfill Tax will increase in line with RPI, rounded to the nearest 5 pence, from April 2016. Additionally, the loss on ignition (LOI) testing regime announced at Autumn Statement 2014 will be introduced from 1 April 2015.” Both of these were as expected. The aggregates levy will remain at £2 per tonne in 2015-16.
The standard rate of landfill tax, currently at £80 per tonne will rise to £82.60 per tonne on 1st April 2015 in England, Wales and Northern Ireland. The lower rate of tax will rise to £2.60 per tonne on the same day. The higher rate will be £84.40 in April 2016.
The Environmental Services Association welcomed the announcement on LOI testing and money for waste crime, stating that it will prevent misclassification of waste, which I agree with as long as it is policed properly by HMRC. However, we are still a long way from ensuring that wastes are properly coded and described for Duty of Care purposes and that has been in force since 1992. More money needs to be put into educating the many waste producers that are woefully ignorant of the legislation as it is their responsibility to code and describe their waste. I’ve seen far too many cases where the EA chase the waste carrier to address the poor descriptions used rather than write to the producer warning them that they have committed an offence.
Meanwhile Scotland will have control of its landfill tax regime, with a delay in introduction of the LOI test, which means that Revenue Scotland will have to move quickly to issue guidance or risk creating a very uneven playing field in North of the UK. Landfill operators will be de-registered by HMRC and re-registered with Revenue Scotland. Wales is not likely to see devolution of landfill tax until April 2018.
The budget document also mentions the Red Tape Challenge again which has identified over 3,200 regulations to be scrapped or improved, saving £1 billion per annum to businesses. It would be nice to think that they could produce less legislation by using what is already in place more effectively as well. Many of the so called loopholes that are plugged by new legislation are exploited because of ineffective regulation.
Overall the budget was a missed opportunity to put landfill tax money to good use and encourage more recycling and innovation in the industry and ultimately shows that when the government gets used to a tax revenue stream it doesn’t like to give it up. Funding the fight against waste crime is only part of the picture. Why is waste crime happening, who is responsible. Answers by snail mail, email etc. gratefully accepted.
Let us know your LOI test experiences for next month’s edition as well to see how well it beds in.
Marco Muia BSc (Hons) MSc MCIWM is the Managing Director of Oaktree Environmental Limited. He specialises in all aspects of waste planning and regulation consultancy. He also holds the level 4 COTCs for Hazardous Waste Treatment and Transfer. You can contact Marco on 01606 558833 or drop him a tweet: @wastechat