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Seven waste projects lose PFI credits in spending review - minister hints EfW to blame

The Department for Environment, Food and Rural Affairs (Defra) has announced that as part of its Comprehensive Spending Review settlement it is withdrawing funding for seven waste PFI projects – saving the government £26M by 2017-18- because they “will no longer be needed to meet landfill diversion targets set by the European Union”.

Environment minister Lord Henley told recycling and waste magazine, and NCE sister title, MRW that all of the projects apart from one that had funding withdrawn contained a strong energy from waste element.

He added: “We had to look very carefully at the methodology of how we decided between which ones would be acceptable, and which wouldn’t. I think we’ve come up with a fair solution that will be acceptable to everyone.

“We are satisfied that we’re already doing pretty well in terms of meeting our landfill targets, and we’re perfectly happy we’re going to meet the 2020 targets by keeping the 11 projects and losing the seven.”

The waste PFI projects which will see the chop are:

  • Cheshire West and Chester, and Cheshire East
  • Coventry, Solihull and Warwickshire (“Project Transform”)
  • Gloucestershire
  • Leicestershire
  • Milton Keynes and Northamptonshire
  • North London Waste Authority
  • South London Waste Partnership (consisting of the London Boroughs of Croydon, Kingston, Merton and Sutton).

However, the following projects will retain PFI funding:

  • Barnsley, Doncaster and Rotherham
  • Bradford and Calderdale
  • Essex and Southend-on-Sea
  • Hertfordshire
  • Leeds
  • Merseyside Waste Disposal Authority and Halton
  • Norfolk
  • North Yorkshire and City of York
  • South Tyne and Wear Partnership (consisting of Gateshead, South Tyneside and Sunderland)
  • South West Devon Waste Partnership (consisting of Devon, Plymouth and Torbay)
  • Wakefield City Council.

Defra said that it is still committed to supporting 21 waste PFI projects already signed.

In the Comprehensive Spending Review (CSR) announced by chancellor George Osborne, Defra has been one of the departments hit hardest by spending cuts, with a resource spending saving of 29% and a capital saving of 34% over the next four years. Only the Treasury has seen a deeper cut of 33% over four years and this compares to an average departmental saving across Government of 19%.

However, he did also announce that local authorities would no longer need to report on 4,700 local area agreements and that in most areas local authority funding would not be ring-fenced from now on.

Long-awaited news of the scale of the Green Investment Bank was confirmed with an initial £1bn fund investment, but Osbourne said: “I hope that more will be raised by the private sector and the selling of Government assets.”

For the energy sector, RHI and FITs seem secure with the go-ahead of the Renewable Heat Incentive to begin in 2011-2012. The Comprehensive Spending Review document states: “. This will ensure the UK meets its 2020 renewable energy targets while making efficiency savings of 20 per cent, or £105 million a year, by 2014-15 compared with the previous government’s plans.”

Furthermore, Feed In Tariffs (FITs) will become more efficient by rebalancing them to support more cost-effective carbon reducing technologies. This will save the Government £40M in 2014-15.

However, support for lower value innovation and technology projects will be reduced to save £70m a year over the Spending Review period.

Environment minister Lord Henley told MRW that WRAP would see its budget cut. He said: “There are no specific details at this stage, but we are satisfied, and WRAP are satisfied, it can live with the cuts. Everyone has to got to take their bit of it.”

A spokesman for WRAP said: “WRAP has been in close contact with Defra over today’s announcement and expects to get clarity on the implications for WRAP’s budget in the next few weeks.  

“We are already in discussion with Defra about our plans for WRAP’s next Business Plan 2011-2014.”

Environment secretary Caroline Spelman said: “Our strategic aim is to deliver on the prime minister’s pledge that the coalition will be the greenest government ever, while playing our part in tackling the economic deficit that we have inherited.

“This settlement reflects the need to make significant savings alongside meeting the priorities we have set and maintaining important frontline services in respect of flood defences, environmental protection and animal health monitoring.”

George Osborne said: “Today is the day when Britain steps back from the brink of bankruptcy”.

He announced more cuts for local authorities, saying that their spending would be cut by over a quarter over four years, as a result of an imposed 7.1% saving each year for four years. This is likely to have an impact on all council-run services including the waste management and recycling services provided to householders.

Shadow chancellor Alan Johnson said: “To get the deficit down the starting point must be jobs, jobs, jobs.

“The difference between us, is that they [the coalition government] removed twice as much from department budgets and we were looking for much slower cuts. We believe we can and should sustain more gradual reductions to sustain growth.”

 

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