MRWA dips into reserves to cut disposal levy

This is despite the authority previously recommending a 7% rise to the levy after being hit by increased costs due to rising tonnages, “technical issues” at the Redcar energy from waste (EfW) plant where its waste is transported by rail and industrial action.

The MRWA manages waste and recycling on behalf of five Merseyside local authorities and via a separate partnership for Halton council.

Around £3.4 million will be taken from the authority’s reserves.

Budget

When setting the budget for 2022/23, the authority was able to tap into Covid-19 related grants available to councils to only increase the levy by 1.74%, to a total of £79 million (see letsrecycle.com story).

For 2023/24, as a consequence of the spending on “significant additional waste costs” in the current year and a catch-up as the levy in the previous year was ‘artificially’ held back an increase of nearly 7% was projected to be the minimum necessary.

However, during the autumn, the former chief executive Carl Beer met with district councils to agree an approach that would reduce this burden.

“Eventually after a series of discussions the proposed level of levy change was that after a significant contribution from MRWA balances, on a one-off basis, the overall levy would be reduced by 0.12%,” the MRWA said.

General fund

The authority has warned that the levy next year could be 7% as there is no guarantee the general fund can be dipped into again.

After the general fund is used to cancel out levy rises, there will be £5.8 million left. The authority said this “is considered to be prudent but will be required given the potential challenges the authority faces over the next two years”.

The MRWA added that similar agreements have taken place for many years and for 2023/24, “the proposal is no different”.

Market

A report which will be considered by the MRWA tomorrow, 3 February, outlined that the authority has been hit by a number of issues which has led to cost rises.

Firstly, the waste transported by rail to Suez’s Redcar site has been hit by the industrial action taking place on the network.

This meant that during each round of industrial action, waste has to be moved by road, often at significant cost.

“The logistics and expense of these alternative arrangements have meant for a difficult period for the contractor and for
MRWA staff in the contracts team who have continued to work alongside them to ensure the waste continues to move to disposal points,” the report explained.

The Redcar facility has also been hit by a number of technical issues, the report says, leading to long periods of planned and unplanned maintenance.

As well as the cost of alternative arrangements, the report said the council has lost out on potential shared income from electricity generated at the site.

The MRWA also noted the “difficult” climate for local authorities in response to central government cuts.

MRWA