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Local Authority Recycling Advisory Committee Conference
Harrogate
Dirk Hazell, Chief Executive, ESA
6 November 2001
Ladies and gentlemen, I am delighted to have been invited to speak to this distinguished audience on behalf of ESA.
That said, it is quite daunting to be billed to speak on the regional strategies when most of the English regions are strategy free zones.
ESA, which recently merged with the Energy from Waste Association, is the UK's sectoral trade association for managers of waste and secondary resources. This activity currently accounts for about £5 billion a year.
There is a widespread view, both within the industry and amongst independent analysts, that the turnover of this industry needs to double by 2010 if the UK is to comply with its international obligations and the ambitions in the National Waste Strategies are to be realised.
LARAC's aphorism Working for a less waste full world is entirely consistent with ESA's aphorism Achieving sustainability across the UK. Like LARAC, we want to see waste reduction and more recycling and we want to proceed on the basis of sound science, the Best Practicable Environment Option and best practice in waste management.
It is a fact that ESA's Members want to restore to the productive economy much more of the material and energy contained in waste. Our Members' commercial future must depend not on ever increasing quantities of waste but on adding more value to more stable and in some cases diminishing quantities of waste. We want our industry to become less a linear waste disposal industry and more a closed loop resource management industry.
Indeed, in some important respects, we out-green the Government.
For example, we believe that if hazardous waste cannot appropriately be restored to the productive economy, then it must be pre-treated to a permanently safe and stable state, Final Storage Quality, before final management in landfill. In contrast, DEFRA's current position appears to be based not on environmental considerations but on the cheapest regime permitted by the Landfill Directive for the longest possible time.
To achieve greater sustainability as we want, we need a much more mature relationship with our regulators. Most waste producers want the cheapest possible solution allowed by law.
Ours is an unusual industry therefore in that we fully recognise that rigorous environmental regulation is an essential driver to help our industry develop. Our Members increasingly maintain externally verified environmental audit systems and we welcome the Agency's plans, notably through BRITE, to move to more sophisticated and smarter methods of regulation.
The Agency, Scottish Environmental Protection Agency, ESA, the Scottish ESA, Welsh ESA and now NIESA are working for partnership in the public interest. We have a much better relationship now with the Institute of Wastes Management and we share a common interest with the LGA. ESA has much in common with mainstream NGOs.
We are genuinely trying to make common cause where we honestly can and there has been a significant development of understanding which should not be underestimated. There is in fact a reasonably broad consensus amongst all these partners and this consensus is consistent with EU Directives.
If the National Waste Strategies are to become deed rather than word, more money needs to be found.
ESA's Members provide excellent value for money and, where possible, we look for savings. For example, we would like the system of tendering for municipal contracts to be streamlined so that both ESA's Members and local authorities are spared avoidable costs. Costs currently incurred in tendering for public private partnerships do nothing to enhance environmental protection but they are a daunting obstacle to overcome in an industry where profits are not high.
However, although this amounts to only about 8% of waste produced in the UK, the National Waste Strategies have a particular focus on the municipal waste stream and funding management of this waste stream is an issue the Government needs to re-visit.
We know that the productive sector of the economy responds to the price signal in terms of resource efficiency and more sustainable management of the waste stream. While some local authorities are considering this problem, most householders are not currently subject to the principle that the polluter should pay. Broadly, there is no direct link between production of waste by a householder and payment by that householder for collection and management of the waste.
Across the Country, ESA's Members receive roughly 80 pence per household per week to collect and manage the municipal waste stream. This figure needs to double if recycling rates are to be transformed. Even at about £1.50 per week, waste will still be an inexpensive utility and the amount involved is small compared to the size of the national economy.
In a context where funding of the Devolved Administrations is limited and where the overwhelming majority of local authority funding comes from central government, the financial solution can only come from central government.
This does not mean that the money has to come from central government.
In ESA's Manifesto, copies of which are available and which also sets outs the website on which this speech will be reproduced, ESA has suggested that there should in the current Parliament be a pilot of direct charging of householders for waste management services.
We believe direct charging can be constructed in a way that is not regressive: in a context where the Government says it wants to transform attitudes to waste creation we see some merit in direct charging and our Members are technically capable of working with direct charging.
However, if the Government is unwilling to go down this route, the alternative is substantially to increase the central funding-whether ring-fenced or otherwise-provided to local authorities to enable them to meet targets under the National Waste Strategies.
ESA does not support formal hypothecation. However, as municipal waste is a small part of the national waste stream, it is possible to increase funding for local authorities at the same time as substantial increases in the Landfill Tax are introduced. Such increases could themselves transform the economics of recycling.
France is an EU country broadly comparable to the UK in terms of its population and economy. France has about £15 billion more than the UK invested in infrastructure for the industry represented in the UK. France spends £3.1 billion on municipal waste services per year compared to the UK's £1.5 billion.
This clearly highlights the obvious fact that the Landfill Tax Credit Scheme, running at about £100 million, is far too small to be regarded as funding any significant part of the National Waste Strategies.
Indeed, I suspect local authorities could be substantially worse off if the present character of the Scheme were to be materially compromised. As private sector money, the Scheme qualifies for a range of external matched funding.
ESA's Members are, for all practical purposes, already complying with indicative guidelines for the Scheme set by the Government immediately before the General Election.
We have not asked for the size of the Landfill Tax Credit Scheme to be increased in line with future increases in the level of the Landfill Tax. We have not opposed the broad concept of some form of targeted additional public fund to help to implement, perhaps at regional level, the National Waste Strategies.
However, every time one hears sources within Whitehall mention the Landfill Tax Credit Scheme and funding of the National Waste Strategies in the same context, the message we receive is that the Government is simply not serious about delivering the Strategies.
Mischief making with an essentially sound Scheme might win awards for journalists on The Guardian but in purely practical terms it does nothing to help local authorities or ESA's Members to deliver compliance with the Landfill Directive.
The issue on funding is simple: there must either be direct charging or local authorities and the Devolved Administrations must have more resources to help to convert more of municipal waste disposal into resource management.
The waste management industry is particularly exposed to rapidly evolving changes in the UK's Constitution.
For all practical purposes, primary policy making for our industry now rests with the European Union rather than its Member States. The real driver of policy in the UK is European Union law.
As you will appreciate, it is the UK rather than any of its constituent parts which owes the legal duty to the EU to comply with relevant Directives. While the British Government has this legal duty and, indeed, controls many of the purse strings, the situation is complicated by constitutional changes within the UK and the need, which ESA endorses, to maintain democratic accountability at all levels of government.
It is a significant challenge in terms of resources for us, but ESA has tried to reflect the substantial movement towards more regional government which has been taking place since the Labour Government was elected in 1997 and which is likely to continue within England.
>The Scottish Environmental Services Association has been relatively successful, since it was established last year, in engaging with new institutional arrangements in Scotland which have created new partnerships. ESA has devolved to SESA's Scottish membership the day to day interaction with the authorities, regulators and other partners. As matters currently stand, the Scottish ESA is the nearest we have to a template for the future. We hope we will be able to deliver in Wales and Northern Ireland the working partnerships we now have in place in Scotland.
Within England, the Government has envisaged an important role for delivering waste management facilities to the regions. From the perspective of the industry we represent, ESA sees practical merit provided principles of democratic accountability are respected and the net result is one facilitating investment in infrastructure.
ESA's Members are finding the current planning system to be a very serious obstacle in the way of investment in the more sustainable infrastructure which will be needed if the UK is to comply with EU Directives and, in particular, the Landfill Directive.
Inability to obtain planning permission for sustainable infrastructure-a landfill is at least as likely to be permitted as a composting or recycling plant-is, we hope, a matter which the Department for Transport, Local Government & the Regions is addressing in its Green Paper on modernising the planning process.
As a former councillor myself, I fully understand the difficulty elected Members face-particularly in authorities where there are annual elections-with contentious planning proposals.
ESA's Members can and do help by working with local communities in developing proposals for planning applications but councillors do not find it easy to grant planning consents for resource management infrastructure.
As matters currently stand, the planning system will preclude the UK's compliance with the Landfill Directive and we need a much more efficient planning process. We need a system to enable the infrastructure needed by the National Waste Strategies to receive planning permission.
One can only hope that the Government's prospective White Paper on regional governance might bear some form of logical relationship to the Green Paper on the planning system.
ESA has industry representatives on all the Regional Technical Advisory Bodies. However, only the North West RTAB has so far produced even a draft report.
Although Regional Planning Guidance will be revised to take account of regional waste strategies, in a context where two thirds of waste local plans are not in place, it is clear that, two years after the publication of the National Waste Strategies, progress is slow.
Indeed, in some respects it has been negative: a more restrictive approach to compost followed a misleading campaign against energy from waste.
Only one completely new energy from waste facility, SELCHP, has become operational in the last ten years. Although an energy from waste facility was approved last week in Hampshire two years after the application was made, this followed ten years of preparatory work.
The available precedents suggest that, at precisely the point that each renewable technology starts to become commercially viable, public policy will shift in response to media sensationalism.
DEFRA has not been entirely helpful.
DEFRA's Consultation Paper about its Aim and Objectives, contained nothing in DEFRA's draft aim about waste management and not one of DEFRA's proposed seven High-Level Objectives refers to waste or secondary resource management.
DEFRA's document lists seven Objectives and contains 38 notes to the Objectives. Waste management, 0.5% GDP, is covered by 29 words in one note to one Objective. There is no reference to implementing the Landfill Directive. There is no reference to the Government's own National Waste Strategy which DEFRA inherits from DETR. Incredible as it may be, DEFRA's proposed definition of sustainable development makes no reference to developing use of secondary resources.
Unlike the Department of Trade & Industry, DEFRA makes no reference to resource efficiency, a concept difficult to measure but which ESA has acknowledged in positive terms and which is directly relevant to sustainable progress in achieving large markets in recylates.
Chris Mullin as Environment Minister said two years ago, and we agreed, that if public attitudes to waste and secondary resources were to change, we needed a public awareness campaign comparable in duration and effort to the anti-smoking campaign launched more than 30 years ago.
But the failings in DEFRA's proposed aim and objectives matter not only because they suggest a low political priority for developing awareness of secondary resource management.
The omission of our industry from DEFRA's document also matters because DEFRA's Consultation Document makes it clear that DEFRA's money will follow DEFRA's aim and objectives. This is particularly serious when Government Departments are preparing their bids to the Treasury for the forthcoming negotiations on the three year Public Spending Round.
Happily, and I am trying hard to end on a positive note, the Secretary of State has recently been much more realistic.
We agree with her that re-use, recycling and composting must be increased and we also agreed with her that the UK cannot allow itself the luxury of too easily closing down our disposal options.
Perhaps her comments on Combined Heat & Power may lead the way to imaginative solutions for integrating waste and secondary resource management into new housing developments.
We can only hope that her imminent Waste Summit will indeed mark tangible progress towards achievement of the National Waste Strategies and the start of the positive and sustained political leadership which will be an essential ingredient if all of us are to be enabled to achieve success. 
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