Defra grilled over PFI waste projects

Officials from the Department for Environment, Food and Rural Affairs (Defra) have come under intense scrutiny from MPs over their support for energy from waste (EfW) projects through the governments PFI programme.

MPs from the Public Accounts Committee the cross party committee set up to examine public spending questioned Defras permanent secretary Bronwyn Hill and director of resource, atmosphere & sustainability Colin Church on the issue at a hearing in Westminster yesterday (June 25).

The session followed the publication of a report by the National Audit Office on Defras oversight of three local authority PFI waste contracts, involving Surrey, Norfolk and Herefordshire and Worcestershire county councils.

All three of the projects experienced delays, stemming from a range of problems including difficulties obtaining planning permission, uncertainty over technology and local opposition. The NAO claimed in its report last week that there was a lack of clarity from Defra over the facts and figures relating to the projects.

At yesterdays session, Ms Hill defended the Departments support for council PFI contracts, under fierce questioning from the Committees chair, the Labour MP for Barking & Dagenham Margaret Hodge, claiming that the UK would likely be on course to miss the statutory landfill diversion targets without the delivery of many of the projects.

Withdrawal

‘We are stuck in a decision we took 20 years ago.’

Margaret Hodge, chair of Public Accounts Committee

She also defended the Departments decision to withdraw funding for seven projects, after it had decided that sufficient capacity existed or is in development to meet the 2020 landfill target.

Ms Hodge asked whether the fact that several of these projects have continued despite the withdrawal of funding called into the question the need for Defras involvement in the first place. In response Ms Hill maintained that the Department had helped to stimulate the market for EfW projects in the UK where local authorities had previously failed to attract finance.

Export

The MP then added that she felt it was daft to build new waste infrastructure in the UK, when it was possible to sell waste as a fuel to countries like Germany and Holland, stating: We are stuck in a decision we took 20 years ago.

MPs focused much of their questioning in yesterdays session over Norfolk county councils aborted residual waste contract, for which the Department had agreed to provide 91 million in PFI funding in 2012.

The funding was withdrawn by Defra in 2013, following its U-turn over waste treatment capacity. Norfolk subsequently cancelled the contract, as it has still yet to achieve planning permission for the EfW facility that would have been used to service the deal.

Norfolk

Withdrawal of the funding only came after Norfolk county council had signed its waste treatment contract with the contractor Cory Wheelabrator, and despite Defra itself raising doubts over the timetable for completion of the project.

Cancellation of the project means that Norfolk is now liable to pay its contractor more than 30 million in compensation. MPs criticised Defra over its role in advising the council on the contract, and why it chose to press ahead with funding for the scheme, only to withdraw it at a later date.

They added that the Department should have exerted more influence on the authority over its concerns that the project may struggle to gain planning permission within the councils proposed timescale.

Responding, Ms Hill said: We were very clear with Norfolk. I regret that public money has been wasted. They were aware of the significant local opposition to the project, but went into that with their arms open.