Contact: Adrian Lee, ext 7004

1. Summary

1.1 The following decision is sought:

The Executive Member for Policy and Resources to decide:

That the Director of Environment and the County Treasurer be authorised to complete negotiations with Hampshire Waste Services Limited to provide a further 30,000 tonnes of composting capacity, at a site to be determined, on the basis that the additional fixed costs can be offset by associated revenue savings or funded from the National Waste Minimisation and Recycling Fund.

2. Reason

2.1 To deliver future needs for composting of green garden waste.

2.2 To take advantage of funding from the National Waste Minimisation and Recycling Fund, if available.

2.3 To enable delivery of future statutory recycling performance standards.

3. Other Options Considered and Rejected

3.1 `Do nothing' option considered but will give rise to additional revenue cost in longer term and will prejudice ability to deliver on future statutory performance standards.

4. Conflicts of Interest Declared by the Decision Maker or a Member or Officer consulted - None.

5. Dispensation granted by the Standards Committee - Not applicable.

6. Reason(s) for the Matter being dealt with if Urgent - Not applicable.

Approved by: .......................................................... Date: .................................

Councillor T K Thornber

7. Background

7.1 On 12 March 2002 the Project Integra Interim Joint Municipal Waste Management Strategy was reported to the Executive Member for Environment. The following decisions were agreed:

(i) That the waste management strategy for Hampshire, known as Project Integra, previously approved by the County Council on 24 January 1996 and jointly adopted by all local authorities in Hampshire, be updated and proposed to Government as the Municipal Waste Management Strategy for Hampshire County Council.

(ii) That the following action plan for Project Integra achieving 40% recycling be approved, subject to funding:

(a) Dry recyclables collection systems be developed so as to attract an average of 60% of the material available to them through expansion and enhancement of existing systems and increased education, awareness and promotion.

(b) The household waste recycling centre network to be managed so as to at least maintain its contribution overall to Project Integra recycling performance levels and expanded to fill service area gaps in Basingstoke, Hart and the Waterside parishes of New Forest.

(c) Hampshire Waste Services Limited be instructed to provide the necessary processing infrastructure beyond current contract commitments.

(d) Authority be given, on behalf of the County Council, for the Joint Project Integra Members' Board to submit an application for funding the action plan from the Government's Waste Minimisation and Recycling Fund or, if this is not possible for technical or other reasons, that the County Surveyor in consultation with the County Treasurer be authorised to make the application on behalf of Project Integra.

(e) Authority be given to the County Surveyor, in consultation with the County Treasurer, to negotiate arrangements with other Project Integra partners that allow for some or all of any income received from Government to fund County Council costs of implementing the action plan, or savings that accrue as a result, to be used to subsidise and incentivise district council collections of recyclables and to ensure recycling infrastructure is fully utilised.

7.2 The Action Plan approved as part of the strategy is designed to meet the statutory Best Value Performance Indicators (BVPI) standards for Project Integra Authorities. The County Council is required to meet a recycling rate of 33% by 2003/04 and 40% by 2005/06.

7.3 A key element of meeting these standards is that of increasing processing capacity for dry, mixed recyclables and for composting green garden waste. Project Integra is currently processing over 70,000 tonnes of dry mixed recyclables annually and is composting over 50,000 tonnes of green garden waste per annum.

7.4 In September the Executive Member for Environment agreed, in principle, to the provision of additional Materials Recycling Facility capacity.

7.5 In addition, a total of 120,000 tonnes per annum of composting capacity is required to meet 2005/06 BVPI standards. This requires an additional 60,000 tonnes capacity per annum to be provided. This total capacity would represent about 12% of Project Integra's total recycling.

7.6 The additional costs of providing the facility can be offset by associated revenue savings. A detailed costing exercise suggests that a net annual disposal cost saving of around £0.5 million would be realised if it achieves the diversion of 30,000 tonnes of green waste that are currently being landfilled as a consequence of householders not using the HWRC network. These savings (or avoided cost) are based on landfill tax increases continuing at £1 per year to £15 per tonne in 2004/05. In 2005/06 landfill tax is set to increase by £3 to £18 per tonne. The net annual saving that year would be nearer £600,000.

7.7 Part, or all, of these savings could be used to help offset initial and/or continuing district council collection costs, if a county-wide household green waste collection system is introduced. The longer term strategy for green waste capture is presently being developed by Project Integra partners and should be determined during 2004.

7.8A funding bid has also been made by the County Council on behalf of the Project Integra partnership to the National Waste Minimisation and Recycling Fund for 30,000 tonnes additional composting capacity, in accordance with the decision of the Executive Member for Environment in March 2002.

Submission of the £2.4 million bid was approved by the Project Integra Management Board on 27 September 2002. A total of £76.3 million is available for waste minimisation and recycling projects in England outside London. It is understood that over 350 bids worth £220 million have been submitted for this funding. The amount of the bid is based on information supplied by Hampshire Waste Services for the capital costs of providing 30,000 tonnes of additional compost capacity.

7.9 If the funding bid is unsuccessful, it would clearly be in the interests of the County Council and its Project Integra partners to discuss the benefits and costs of increasing composting capacity off its own volition. Not only will this help towards the BVPI targets, but increasing residual disposal costs, fuelled by further landfill tax increases will be avoided.

7.10 A site has not yet been identified and delivery of the proposal is subject to obtaining appropriate planning permission and a waste management site licence. The responsibility to identify a site and deliver the proposal will rest with Hampshire Waste Services.

7.11 The outcome of the funding bid is expected to be known in early December and, if approved, the project needs to be completed within the financial year 2003/04. It is essential therefore that an early instruction is given to Hampshire Waste Services to proceed if that timescale is to be met.

7529A/AWL