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Effective Delivery of the Waste Strategy seminar
Challenges in Delivering the Strategy on the Ground: the Waste Management Industry Perspective
Dirk Hazell
13 December 2002
ESA welcomed the publication of the Strategy Unit's report 'Waste Not, Want Not'.
We also welcomed the Treasury's announcement of a medium term target of a £35 per tonne landfill tax although we are disappointed and frustrated by the proposed changes to the Landfill Tax Credit Scheme.
We believe that we starting out on a road which will take us to a more sustainable use of resources and management of waste in the UK.
But it is disappointing that we are still beginning our journey, when a number of our European partners, such as Netherlands, Denmark and Austria, have already arrived. They already comply with the landfill directives BMW diversion targets. The UK is hardly a leader in waste management policy or practice.
In truth the UK continues to be timid in its response to the waste challenge, and there is a real danger that if we continue to respond in this way, there will be more and not less waste crises along the lines we recently experienced with fridges.
So does the waste management industry think the strategy unit's report has lived up to expectations?
We expected the Strategy Unit to move the debate along further.
We expected it to provide a focus for the different bodies and individuals contributing to the debate.
We hoped that it would show real leadership in an area that for too long has been a policy backwater
And we hoped that it would provide the degree of certainty required for our industry to make the step change required to manage waste and secondary resources more sustainably.
The Strategy Unit report is the important culmination of a year that began with the waste summit, and has seen Select Committee inquiries on fridges and hazardous waste, and the first changes in waste management practice required by the landfill directive. Whilst the SU could not in all honesty be expected to break new ground, it will be nonetheless extremely important in building on existing policy and acting as a catalyst to promote real change.
ESA from the outset welcomed Margaret Beckett's leadership in convening the first National Waste Summit. We also thanks her for bringing together a wide range of partners in a constructive spirit in her Advisory Board.
The Secretary of State, in her first year in office at DEFRA, has done all one could reasonably have expected.
But in terms of delivery, ESA believes that SU report has fallen short of identifying the precise delivery mechanisms the UK will need to use, and make the hard choices about which path to go down.
Crucial decisions on achieving the UK's compliance with EU laws on waste management still lie ahead for the Government.
Our great hope is that this report will galvanise the UK into achieving timely compliance with EU law and there is much in the Report for us-and everyone else who wants to reconcile economic growth with environmental protection-to welcome.
However, if the Report is to guarantee the UK's timely compliance with EU law, significant and imminent decisions lie ahead for the Government. We have reached a time for deeds rather than words.
Rather than argue the principles behind the report's findings I'd like to pick out just some of the recommendations and offer some thoughts on how the UK might take these forward as deeds in the coming months - and I stress that we need to look at this in terms of months are the unit of time we need to look at. We must make rapid progress if we are to have any chance of meeting our national and international obligations.
The first issue is "Paying for waste management" - investing in infrastructure
The report rightly recognises that the UK is not paying enough for waste management. It also recognises that the polluter pays principle can be applied to householders. ESA has pointed out consistently that the UK must double the amount spent on managing the municipal waste stream and even then it would achieve only average European performance.
Earlier this year a MORI poll - funded by the Landfill Tax Credit Scheme - showed that 61%-nearly two out of every three people-thought that the collection, recycling and management of waste was the most valued service provided by local authorities. The runner up, schools, was way behind. The clear majority of UK residents rank the services provided overwhelmingly by ESA's Members to be the most important service they receive from local government.
The MORI poll also revealed that most people-56%-think each household already pays more than £2 a week for collection and management of household waste. More than a quarter of people-28%-think each household spends more than £5 a week.
As you know, across the UK less than £1 per household per week is spent on collecting and managing waste. There is an urgent need at least to double this figure, and even then we will only reach average European performance.
Ernst & Young produced a discussion document earlier this year to explore application of the producer pays principle to householders.
They considered non-regressive models, taking fully into account the current structure of local government and of local authorities' contracts with our Members. They also considered the experience of the water sector.
Given the confusion of debate - still reflected in Annexe I of the SU's report - one of Ernst and Young's most useful outputs is to draw a clear distinction between direct charging, a flat fee local authorities could collect from Council Tax payers on behalf of ESA's Members, and variable charging which requires householders to pay more if they generate more waste.
Variable charging is a purer application of the producer pays principle. It may be the long term solution for the UK. However direct charging might be a more pragmatic initial step towards enabling local authorities to arrange, for ESA's Members to provide a higher level of service to the communities both serve.
ESA has for some time advocated piloting of direct charging in the current Parliament. The Government has an opportunity, provided by the Waste and Emissions Trading Bill which is currently being considered by Parliament, to take action and bring forward the legislative changes required to allow flexibility in the way Local Authorities fund the collection and management of municipal waste.
Second: Championing Waste Management in Government
The fact that a Strategy Unit project was required illustrates the current lack of focus for waste management issues within Government. Responsibility is spread between two main departments-DTi and DEFRA- but other arms of Government which impact on waste policy include ODPM, DoH, HMT.
A champion for sustainable waste management, fully appraised of the facts and with the necessary powers to effect change is a priority if the UK is to move forward.
We warmly welcome the Strategy Unit's view that the Secretary of State for Environment Food and Rural Affairs should be the Ministerial Champion for waste management strategy.
Whilst our industry does in general enjoy a good relationship with government, a more consistent and mature relationship across all departments is required. This will allow our industry to talk to the whole of Government and Government to talk to us with a coordinated voice.
And we require brave decisions, which may not be popular among all sectors. Waste management is driven by consistent and effective regulation and the right fiscal drivers. Without these waste will continue to flow to the cheapest possible option allowed by law - and unfortunately quite often, not allowed by law.
The DTI's Innovation and Growth Team for the Environmental Goods and Services Sector last month reported that the potential world market for our sector was in the order of $515billion - broadly comparable to pharmaceuticals and aerospace. The UK will not be able to fulfil its potential in this important and still-developing market without clear leadership and a wide understanding of our sector within Government as a whole.
Third, reforming the planning system
ESA has for years argued that the current planning system is not delivering for waste management. It is a continuing source of frustration when, having competed for and won a contract with a local authority, the same local authority will not grant planning permission for the facilities required to deliver the contract.
Local authorities might be reflecting local concerns, but there must also be a recognition that if we are to treat the growing amount of waste more sustainably, more waste management facilities will be required, and that these inevitably will be close to centres of population.
ESA believes that role of regions must be expanded in planning for waste management. The regions are best placed to make strategic decisions about the location and design of waste management facilities.
We look forward to an early review of planning policy guidance - obtaining planning permissions for facilities are a major barrier to delivering sustainable waste management.
Recycling:
We agree with the Unit's conclusions that there is a need to increase rates of recycling. ESA's Members want to extract more of the value from waste. We would, therefore go further than the Recommendation 6 - which recommends that space be allowed for recycling facilities in new developments with more than 50 houses -and encourage high levels of use of recycled/reused building materials in appropriate new developments themselves as a condition of planning consent. We would also welcome, when ODPM launches its major initiative in January 2003, proper consideration of the integration of CHP in the construction of new residential and industrial districts.
Having said that, ESA commends the Government's current responsible approach to defining recycling. The Government's Best Value performance indicators define recycling not on an input but on an output basis. This reflects the approach taken by the draft European CEN standard.
By pointing to productive re-use of recycled materials, we will measure real recycling which broadly reflects environmental benefit.
Health
I've mentioned that waste infrastructure development is slowed because of planning delays. Delays and uncertainty are as likely to be faced as much for composting and recycling facilities as large scale energy from waste plants.
Often delays are due to public debate, which unfortunately is often based on inadequate information, about potential health issues. Waste management is a mechanism to protect public health. Without regulated waste management there would be undoubtedly more potential health problems. This fact should be recognised more widely.
ESA's Members operate to highest standards, regulated by the Environment Agency. However ESA does recognise that there are unknowns. ESA believes that an independent review - perhaps along the lines of the Stewart inquiry into mobile phones and health - might help provide authoritative communication of current knowledge of the potential health impacts of waste management and help define those areas where gaps exist in scientific knowledge. We would welcome an early start to such a review.
Finally, Delivering sustainable waste management
We welcome the Unit's recognition that the PFI needs to be in tune with the sector's needs.
ESA believes that the Waste PFI delivery panel should be extended to include representation from our industry. And the PFI itself needs to be made more simple and flexible.
Contracting with local authorities is a continuing source of frustration for both parties.
Tendering costs for major contracts may be in the region of £1m. And, unlike some PFI contracts, there is no mechanism for the waste industry to recoup costs of tendering. This needs to be addressed as a priority.
Considering that some of the biggest waste management companies have turnover of less than £100m and that margins in waste management are historically low, spending £1m on bidding for a single contract -on a non-refundable basis - is a significant barrier to entry.
Furthermore some contracts may take 2 years to negotiate which is hardly a recipe for meeting targets by 2010.
The private sector bidders for contracts has an important experience, skills and messages to bring to the table.
We wish to see rapid progress on these issues.
That will be how the Strategy Unit report will be judged - not by what it says, but the action that it precipitates in the next few months.
But we do have reservations about certain aspects and it is only fair to highlight them:
Home composting
We believe that the Strategy Unit's strategy relies too heavily on home composting. We are not convinced that such a rapid growth in home composting is feasible.
Particularly when modern developments have smaller gardens which means composting is closer to people, it might be safer and ultimately much more reliable for this waste stream to be separately collected and composted in enclosed and strictly regulated facilities.
And a particular concern is the emphasis on providing rebates to Council tax payers at a time when it is recognised money should be directed towards waste management rather than being removed.
Research
Changes to the Landfill Tax Credit Scheme mean that the future of ESART is uncertain. In recent years ESART has provided a focus for high quality research on sustainable waste management.
It is essential that the industry is included in discussion between DEFRA and the Environment Agency regarding research programmes. The ESA Research Trust and ESA's Members have excellent state of the art knowledge and inclusion of the industry in discussion is more likely to achieve focus.
So in conclusion:
The Strategy Unit report is a milestone not a watershed
It has provided much needed focus to the waste policy debate but this needs to be carried through in DEFRA and in relevant government departments.
There are specific recommendations which need to be pursued as a matter of urgency, which I've outlined today:
Of these, planning, finance and simpler contracts will make the biggest difference to ESA's members - the industry that will have to deliver the waste strategy - in the short to medium term.
We welcome the leadership from the Secretary of State so far. The Report recommends that she continues to lead - we want to be a constructive partner with her and the rest of Government as we begin to deliver some of the changes.
Of course industry and Government should work together closely. We look forward to developing solutions with Government, our regulators and other groups.
The Government-industry forum is welcome, but it must not be an excuse for procrastination - yes we must get it right, but we must also act quickly to put strategy into practice. 
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