ELWA is responsible for the disposal of waste from the London boroughs of Barking & Dagenham, Havering, Newham and Redbridge.
The underspend was reported in budgetary control report, which will go before the council on Friday (February 10). The report compared ELWA’s actual revenue and capital expenditure for the period ended 30 November 2022 with the original revenue budget approved in February 2022.
It is based on information provided by its waste contractor Renewi as well as officers of the four constituent councils and the authority’s own information.
Budget
ELWA had predicted it would spend around £51 million, but this was £7.1 million lower than budgeted, due to actual tonnages being lower than profiled during the first eight months as well as capital financing costs being lower than budgeted.
During the first eight months of the financial year, the total tonnage for the eight months to November 2022 was 292,829, 10.5% below the profiled budget.
The report stated that “the principal activity driver on ELWA’s budget is the level of waste tonnage delivered from the constituent councils”.
Therefore, the contract payments are forecast to be £3.7 million lower than budgeted, according to the document. This is based on actual tonnages for April to November and the remainder of the year forecast in line with the profiled budget, the report stated.
Other contributing factors to the underspend were higher than anticipated commercial waste income, which while down from 2021/22 is still £300,000 higher than anticipated at £3 million.
The authority however acknowledged that “commercial waste income remains volatile, and the forecast may change”.
Performance
Year-to-date recycling performance at 32.7% is “tracking closely to the annual target of 33%”, the report said, adding that all constituent councils are showing an improvement against their 2021/22 year-end positions.
The 2022/23 revenue budget includes provision of £1 million for costs relating to the procurement of post 2027 waste services.
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