ESA Pages
Week Ending: 26 February 2010
Community Infrastructure Levy
Draft regulations on a Community Infrastructure Levy (CIL) have been laid before Parliament which subject to approval would come into force from April.
Local authorities have been provided with discretionary powers to charge CIL on most types of new development with the levy used to fund infrastructure to support development within the local area.
CIL could not be charged until adoption of a Charging Schedule, which would set out the rates that would apply to different types of development. The Charging Schedule itself would be subject to independent examination to ensure that CIL was set at an appropriate level to support investment of local infrastructure, but without impacting upon the economic viability of chargeable development.
The new regulations allow local authorities to seek contributions through both planning obligations and CIL. Planning obligations would be ‘scaled back’ and used to mitigate site specific impacts to facilitate the grant of planning permission, whilst CIL would be used to secure the necessary finance required to deliver the local area’s infrastructure priorities.
Other than development less than 100m2, only development associated with charitable organisations would benefit from CIL exemption.
ESA has long urged caution at proposals to exempt development associated with charitable organisations from CIL as this would contravene HMG’s aims to ensure that CIL exemptions do not distort competition. Local authorities should instead plan for the increase in waste recovery capacity required by EU law by exempting all waste recovery development from CIL.
Extending CIL to such infrastructure would add to the financial burden on local authorities and businesses of paying for waste treatment compliant with EU law.
For further information please contact Stephen Freeland at s-freeland@esauk.org
No time to waste
Last week, the Environment Agency published its ninth State of the Environment report for the South East and also the latest version of its London State of the Environment report, highlighting the challenges the regions face. The reports focus on a range of issues, including climate change, flood risk, sustainability and importantly to our sector, waste.
In regard to the findings on landfill, waste disposal and recycling the reports note that although the South East and London have significantly increased their recycling and landfill diversion rates, changes within the region are too gradual and time is rapidly running out. In 2008 there was 106 million cubic metres of landfill space available in the South East region, but if current levels of waste going to landfill persist there is only enough capacity for seven more years. This statistic particularly has implications for London, which sends 25.8% of its waste to the South East. The report notes that investment in waste infrastructure, commitment to waste reducing initiatives and developing new technologies are all needed to help ensure landfill capacity surpasses the seven year estimate.
The South East region has increased recycling of municipal waste by 127% over the period 2000/01 to 2008/09. In 2008/09, 663,000 tonnes of waste were incinerated and used to produce energy, which is an increase of 113,000 tonnes from 2007/08 and 15% of all municipal waste. However the report indicates that a major challenge to overcome is how to increase the recycling of commercial and industrial waste and in particular construction demolition and excavation waste as these two figures combined account for 82% of landfilled waste. The joint Environment Agency, Waste and Resources Action Programme and South East England Development Agency partnership ‘The Pathway to Zero Waste’ estimates that to achieve a 50% reduction in the amount of C&D waste going to landfill, 2.7 million tonnes of material need to be diverted elsewhere.
Another issue raised by the report is in regard to fly-tipping. In 2008/09, in the South East there were 579 ‘big’ (significant/multi loads) and 575 ‘nasty’ (chemical drums, oil, fuel) fly-tipping incidents. The total cost to clear all the fly-tipping incidents in the South East was over £4.5 million.
The State of the Environment reports serve as a useful tool to summarise key findings in the specific regions, highlighting how precariously balanced the regions’ landfill future is.
For further information please contact Rid Hollands at r-hollands@esauk.org
February economic commentary: public deficits
As economic conditions remain difficult across much of the developed world, a crucial question for policy makers going forward will be how to reign in the huge public deficits run up by Governments, writes Jacob Hayler.
These deficits have resulted from attempts to prevent the recession from being even deeper than it otherwise would have. Governments now fear that if they act too soon to cut spending or raise taxes then private sector demand would be unable to fill the gap and the economy could slip back into a ‘double-dip’ recession. However, the longer the deficits remain in place, the greater the overall debt burden on the public sector. If investors believe that the risk associated with holding such debt has increased then they will demand higher rates of interest in return. This would force up interest rates across the economy and constrain longer term recovery and growth.
Given the difficulties and uncertainties involved in trying to work out the optimal time to reduce deficits, it isn’t surprising to discover that opinion among economists is split. A group of 20 distinguished economists recently wrote to the Sunday Times to call for the Chancellor to take immediate action. Mr Darling is however reticent and has stated that the UK economy is “not out of the woods yet”. The Institute for Fiscal Studies (IFS) agrees with the Chancellor and believes that the fragile nature of the UK recovery means that no action should be taken in 2010, despite the IFS’s belief that an extra £13 billion in savings will need to be found by 2015-16.
This important decision for UK policymakers comes amidst a prevailing mood of continuing economic gloom. The Chartered Institute of Personnel and Development’s (CIPD’s) latest quarterly survey found that the outlook for the labour market remained poor with almost one in three public sector employers planning to make redundancies. Unemployment trends tend to lag behind economic output, and the CIPD report seemed to confirm this as it suggested that the jobs outlook had worsened despite the UK apparently emerging from recession at the end of 2009.
At the same time, UK inflation is on the rise, with the Consumer Price Index (CPI) reaching 3.5 per cent in January. This means that the Governor of the Bank of England will be forced to write to the Chancellor to explain why inflation is more than one per cent above its target. The Bank has already indicated that it expects this period of relatively higher inflation to be temporary and has suggested that the CPI will return below its two per cent target later in the year without the need for intervention. The one-off ending of the Government’s temporary rise in VAT is certainly a contributory factor to the current rise.
Things for the UK could be worse. A weaker pound has helped exports remain competitive which have helped manufacturing output to grow much stronger than anticipated, according to official statistics. This benefit associated with a floating exchange rate is in sharp contrast to the current problems besetting the Eurozone where some heavily indebted nations, such as Greece and Spain, have found themselves locked into a monetary regime under which they cannot devalue their real debts away or regain competitiveness through a cheaper currency.
Eurozone weakness, as also illustrated by Germany’s stagnation in the last quarter of 2009, damages hopes for an export-led UK recovery. The Eurozone is the UK’s largest trading partner and it seems likely that demand across the Channel will remain weak. All this means that whichever party forms the next Government will be presented with some extremely difficult decisions to try to help chart the UK through the most challenging economic conditions of recent times.
For further information, please contact Jacob Hayler at j-hayler@esauk.org
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