Councils call for landfill tax freeze in Budget

The Local Government Association (LGA) has called for a landfill tax freeze and greater investment in waste infrastructure ahead of the governments Budget and spending review next week.

In a report published today (March 14), the LGA argues that freezing landfill tax at the 2014/15 financial year rate of 80 would help to keep costs down for councils and the taxpayer.

The LGA has called for a freeze on landfill tax
The LGA has called for a freeze on landfill tax

It follows an Environmental Services Association report in November 2012 that also argued against extending the landfill tax beyond 2014/15 (see letsrecycle.com story).

The LGA, which represents 423 local authorities in England and Wales, also calls for greater investment in waste infrastructure in order to help local authorities meet EU recycling and landfill diversion targets for 2020.

The current landfill tax rate is 64 per tonne, which is set to rise by 8 a year until 2014/15. However, the government has not yet said whether it intends to increase the tax or not after 2014/15.

The LGA argues that a landfill tax freeze at 80 would contain councils costs to a 3% rise (120 million) to 3.85 billion, whereas if the landfill escalator continued at its current rate, it would cost the taxpayer an extra 70 million.

“we urge central government… to explore solutions to the gaps in waste infrastructure.”

– Local Government Association

An 80 landfill tax would continue to provide an effective incentive to divert waste from landfill, the LGA adds.

Waste collection and disposal is the third largest local government service in terms of spend, according to the LGA. It projects that the overall cost of landfill tax to local authorities would be around 720 million, which would rise to 771 million in 2015/16 if the 8 escalator remains in place.

The report states: If the rate is frozen it would cost local authorities 700 million in 2015/16 based on falling tonnages to landfill, providing a saving in the region of 70 million and ensuring the overall cost increases for waste management are contained in that year at 3%.

Year 08/09 09/10 10/11 11/12 12/13 13/14 14/15 2020

Tax

rate

32 40 48 56 64 72 80 Min. level of 80

Waste infrastructure

With population and associated household waste expected to rise, many councils will have to increase spending in order to meet EU 2020 targets and avoid future fines in the region of 100-150 million, the report states. As a result, it argues, more investment is needed in waste infrastructure in the UK.

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The LGA report

It says: Significant investment in infrastructure will be required to meet the recycling targets. As waste infrastructure projects often need several years lead time, we urge central government, in collaboration with local government, industry and other partners in the waste supply chain, to explore solutions to the gaps in waste infrastructure.

In December 2012, the head of tax at waste management firm Veolia Environnement UK, Wendy Wagner, also said that the landfill tax escalator should not be extended beyond the 2014/15 financial year (see letsrecycle.com story).

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