Archived decisions

APPENDIX

4. Recycling Credits

The Recycling Credit scheme was introduced in 1990 as an early (and then unique) policy lever to encourage recycling in two tier areas. Today the scheme has to operate with a number of other economic and regulatory measures designed to promote more sustainable waste management. The Government has signalled its intention to encourage LAs to move away from recycling credits as the primary system of inter-authority payments. It is likely that the scheme will be overhauled substantially or even replaced by the Government during the period of this plan.

In the meantime Recycling Credits are payments made by the WDA to help offset the costs of processing recyclables. The sum involved reflects the cost avoided by the WDA by not having to landfill or otherwise dispose of the material. As part of the original PI Memorandum of Understanding, the WCAs agreed not to claim recycling credits for material processed by the WDAs through the MRF and composting sites funded by the WDAs through the long term disposal contract. In effect this is an "off balance sheet" contribution to the overall project costs. At current values this would represent around £2.9m. The annualised cost of providing and operating the facilities is £4 million-£5 million.

Recycling Credits are paid by HCC in relation to material, such as glass and textiles, which is not processed through the contract with HWS. Recycling Credits are also paid voluntarily to third parties, such as charitable organisations for material diverted from the waste stream. HCC currently pay recycling credits in excess of £1 million per year to WCAs and third parties.

5. Landfill Allowance Trading Scheme

From April 2005, the Government introduced a Landfill Trading Allowance Scheme which limits waste disposal authorities to a specific volume of biodegradable municipal waste which declines progressively year on year to 2020. Authorities which exceed their allocation must purchase the unused allocation from another authority or pay a fine of £150 per tonne. Hampshire WDAs are predicted to have a net surplus of allowances over their actual requirement until at least 2013/14. The following extract is from an Environment Agency Report on the landfill Allowances and Trading Schemes (LATS) - 2005/6.

HCC had the greatest individual surplus of allowances in 2005/6. It used only 94,361 tonnes of its allocation of 361,997 tonnes, leaving a surplus of 267,636 tonnes. This surplus was sold to other authorities. Hampshire used only 26 per cent of its allowance allocation for 2005/6 and, based on this performance, is likely to have surplus of allowances in the first Landfill Directive target year (2009/10).

HCC have indicated that LATS income is used to offset the growth in waste disposal costs which has been £3 million-£4 million in each of the last 10 years (delete considered as a corporate resource) and is therefore unavailable for redistributive inter-authority payments.