Chancellor raises Green Investment Bank pot to 3bn

Chancellor George Osborne used his Budget speech today (March 23) to triple the amount of government money being used to set up the Green Investment Bank to 3 billion and bring forward its start of operations by a year to 2012/13.

And, he has also announced plans to streamline the planning system, with proposals to introduce a 12 month limit on processing all planning applications, including appeals, likely to win support from waste companies who have long complained of planning delays.

Other measures outlined today include a cut of fuel duty by one pence per litre from 6pm tonight and postponing a 1p/litre increase in the duty scheduled for April 2011 until April 2012. This is likely to be welcomed by waste companies and councils facing ongoing fuel cost increases (see letsrecycle.com story).

However, Mr Osbornes Budget, which he termed an urgent call for action for Britain, did not include any new announcements on landfill tax which is set to increase by 8 per tonne until 2014/15 under plans announced the previous chancellor, Labours Alistair Darling (see letsrecycle.com story).

This means landfill tax will increase to 56 per tonne on April 1 2011 and to 64 per tonne on April 1 2012, while the lower rate of landfill tax paid on inert waste will continue to be frozen at 2.50 per tonne for 2012/13.

Similarly, there were no new announcements on the proportion of the landfill tax liability paid by landfill operators to support environmental projects, the Landfill Communities Fund. Budget documents reveal this will rise in line with inflation in 2011-12 to 78.1 million.

Future decisions on the value of the fund will take into account the success of environmental bodies in reducing the level of unspent funds that they hold, the Budget documents add.

Green Investment Bank

The Green Investment Bank has been identified as a potentially key funding route for new waste infrastructure by some in the sector (see letsrecycle.com story), and todays announcement means that it will now be launched with 3 billion of government capital and not just 1 billion as previously announced.

Dubbing it a bold step to make the green energy revolution a certainty, Mr Osborne revealed it would begin operation in 2012/13 a year later than previously planned and claimed it would be able to leverage a further 15 billion in private sector investment over the course of the current parliament.

Mr Osborne added that the Bank would support low-carbon investment where the returns are too long-term or too risky for the market.

But, he also revealed that the Bank would not be able to borrow money to support its work until 2015/16, a move quickly criticised by environmental group the Aldersgate Group which includes Biffa among its members.

Andrew Raingold, executive director of the Group, said: “We welcome the additional finance for the Green Investment Bank but it must have the power to borrow from day one. This would put the bank at the heart of Chancellor’s plan for growth and not wait until the UK is overtaken in key green industries by competitors.”

Planning

In terms of planning, Mr Osborne noted the importance of local communities having a say in planning matters – as espoused by the Localism Bill but labelled the planning system a chronic obstacle to economic growth.

To address this, he outlined plans to set a 12 month limit on considering planning applications, including appeals, as part otherwise yet-to-be-specified measures to streamline the planning applications and related consents regimes removing bureaucracy from the system and speeding it up.

Planning delays have regularly been identified as a key barrier to developing the new waste infrastructure the UK needs to meet to landfill diversion and recycling goals (see letsrecycle.com story).

Mr Osborne also said the government would introduce a presumption in favour of sustainable development so that the default answer for sustainable planning applications is yes. The Budget documents do not specify, however, how and whether waste would be included within the sustainable definition.