Changes to Landfill Tax Credits will boost waste minimisation, says Treasury

From April next year, around 2/3 of LTCS credits – 100-110 million a year – will be transferred to public spending programmes which support better waste management and recycling. The remaining third will be available for local community environmental projects.

Mr Healey said: “The nature of the scheme didn't allow the sort of strategic direction that we need in order to achieve waste minimisation aims. Some of the criticisms of the scheme were that it was not producing a significant impact on the waste management challenge.” The Treasury's solution, he said, was a balance between recognising these criticisms and “the value that many local communities place in having landfill tax credits from this scheme.”

Problems
Other problems with the scheme included that the Treasury was unable to tell what impact or success some of the schemes had. “In view of the significant amounts of funds going into local and environmental groups, that was not sustainable,” Mr Healey argued. “We need to do this in a different way that's more effective.”

Facing accusations from members of the Environmental Audit Committee yesterday afternoon (December 11) that the LTCS had been “chopped off at the knees”, Mr Healey denied that environmental schemes which had been expecting funds would suddenly be left penniless. “Those projects which have already had tax credits allocated under the scheme and for which the credits are available, will continue,” he said. “One thing I will do is to ensure that good new projects that we have in the old scheme have an opportunity to secure funds under the new scheme.”

But he was less sympathetic to arguments that local community projects were losing out. “From time to time, we have to make quite difficult decisions about priorities,” he said, adding that in view of environmental targets, continuing to fund community schemes from the LTCS at the same level was “now simply not sustainable.”

And asked how religious groups, who would refuse Lottery money, could continue to fund local community works, Mr Healey said: “That's not something we have been looking at and that's not a matter I regard as my direct responsibility. The priorities of this were to deal with the increasing amounts of waste that we produce and secure a better range of policies and programmes that are longer term and much more far reaching than before.”

Leverage
Labour MP David Wright pointed out that when the money was classed as 'private', it could attract five or six times its own leverage. He asked Mr Healey why the Treasury could not have changed the criteria for the distribution of credits and redesigned the scheme.

Mr Healey answered that he was aware of the potential leverage power of private money, but argued: “Our analysis of how the scheme works suggested that the degree of redesign would have been quite difficult to do and the more effective way to do it would be to redeploy two thirds of the fund to a different delivery.”

Mr Healey also denied that the new scheme would “swell the government's coffers.” “This is not money that's going into central government coffers. It will allow us to do work that we could not do and work with ministers form the DTI, DEFRA and the Office of the Deputy Prime Minister,” he said.