Waste services could suffer from council tax freeze

And, they have questioned the level of commitment to environmental issues in Chancellor George Osborne's first budget, with claims that that it represented a “missed opportunity” to drive investment in low-carbon technologies, such as renewable energy.

However, Mr Osborne's confirmation of the £8 per tonne-a-year increase in landfill tax until 2014 and a floor under the levy at £80 per tonne being put in place until 2020 won a more positive response for helping to encourage investment in new waste infrastructure.

In the Budget, Mr Osborne said that the government would work with local authorities to bring about a freeze or reduction in the council tax they levy on householders for 2011/12, though he did not reveal how councils would be compensated for achieving this (see letsrecycle.com story).

Council tax freeze

This drew a cautious response from both councils and waste trade bodies, seeking assurances over how the tax freeze would be paid for and what impact it would have on services on the ground.

Dame Margaret Eaton, chairman of the Local Government Association (LGA), said: “Councils work hard to keep council tax down, and are looking for government to confirm that the proposed tax freeze is paid for from savings outside local government such as central government marketing and consultancy.”

And, the plastics recycling body the Plastics 2020 Challenge stressed that it was important that Mr Osborne ensure “essential waste and recycling services do not suffer in the face of a council tax freeze”.

Barry Turner, of the Plastics 2020 Challenge, said: “While we understand that tough decisions need to be made in order to reduce the deficit and help the economy recover, we caution against making recycling and energy from waste an easy target for cuts in investment to balance local budgets.”

In particular, he pointed towards the 2% drop in recycling rates which he said had been experienced by East Cambridgeshire council after it withdrew kerbside collections of plastic bottles as a cost-cutting measure earlier this year (see letsrecycle.com story).

However, there was a more positive response to the council tax announcement from Norwich-based services company May Gurney, which runs various waste and recycling contracts up and down the country.

The company's chief executive, Philip Fellowes-Prynne, claimed that the fact that the government had said it work with councils to help them freeze the tax in 2011/12 would help to safeguard frontline services.

“The announcement of new Whitehall help for local authorities which freeze or significantly limit council tax rises is also welcome and will provide local authorities with some relief as they strive to protect the frontline services that residents and council tax payers expect, against a backdrop of increasing budgetary pressure,” he said.

Landfill tax

There was also a positive response to the clarity given on landfill tax, with Paul Levett, deputy chief executive of Veolia Environmental Services, commenting: “We welcome the greater certainty regarding the future level of landfill tax, which allows us to make investment decisions for new waste infrastructure.”

However, this too received a more cautious response from the LGA, which, in a briefing document, claimed the tax “perversely” reduces the money available to councils to invest in infrastructure to divert waste from landfill, even though the tax was introduced to encourage diversion.

As a result, the LGA reiterated its support for the return of landfill tax revenues to councils to support new waste initiatives.

Low-carbon economy

While the Budget contained a commitment to bring forward detailed proposals on establishing a Green Investment Bank, environmental and renewable energy bodies labelled it a “missed opportunity”.

In particular, the Renewable Energy Association (REA) claimed that the Budget left “key questions unanswered” in terms of enabling wider deployment of renewables in the UK.

Gaynor Hartnell, chief executive of the REA said; “We welcome the intention to make this the greenest government ever. We do appreciate the pressures this new government faces, however there is now real urgency to move to detailed plans for action. The government needs to apply the same firmness of purpose it has shown today to renewables.”

And, the Environmental Industries Commission (EIC), which represents bodies in the environmental technology and services industry, expressed its disappointment at the Budget's lack of new taxes relating to businesses' environmental impacts which could then be used to fund new green technologies.

The EIC's policy director, Danny Stevens, said: “By failing to translate environmental damage into immediate price signals, today's Budget simply reinforces the huge market failure that continues to allow the exploitation of our environment free of charge – cost of pollution is borne by the British public, not the polluter.”