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ALG TEC Executive Sub-Committee Defra recycling consultation Report by: Jared Boow Date: 9 February 2006 Contact Officer: Jared Boow Telephone: 020 7934 9951 Summary: Recommendation s: targetsItem No: Job title: Emai l: 10 Principal Environment Policy Officer [email protected] In October 2005, DEFRA issued a consultation document on options for local authority statutory performance standards on recycling and composting in 2007/08. An ALG officer response was made to Defra, and Member endorsement of those comments is now sought. Members are recommended to: Agree the ALG officer response to Defra’s Options for local authority statutory performance standards on recycling and composting in 2007/08. Local authority statutory performance recycling and composting Consultation standards on 1. Defra issued the ‘Options for local authority statutory performance standards on recycling and composting in 2007/08’ document for consultation in November 2005, requiring responses by January 2006. ALG TEC Executive Sub-Committee Defra recycling targets consultation 66 Agenda Item 10 09 February 2006 Background: 2. The Government’s Waste Strategy 2000 set targets to recycle or compost at least 25% of household waste by 2005 rising to at least 30% by 2010 and at least 33% by 2015. The Government also has a Public Service Agreement (PSA) target to “achieve 25% recycling or composting of household waste by 2005/06 with further improvement by 2007/08”. To ensure that all local authorities contributed to achieving the PSA target and national recycling targets, the Government set statutory performance standards for recycling and composting in 2003/04 and 2005/06 for each local authority in England. These standards when combined were designed to deliver the national targets of 17% in 2003/04 and 25% in 2005/06. The individual local authority targets were set as part of the existing Best Value framework which requires local authorities to set challenging targets to improve waste management services. 3. Four options are presented by Defra in their consultation regarding setting future recycling and composting targets. These are: Option 1: do nothing; Option 2: set statutory performance standards in 2007/08 for recycling and composting for all local authorities equal to the level of their targets in 2005/06; Option 3: set statutory performance standards for recycling and composting in 2007/08 for all local authorities equal to the level of their targets in 2005/06 except for those local authorities with a target of 18% in 2005/06 who would be required to raise their performance to 20%; and Option 4: setting statutory performance standards for recycling and composting in 2007/08 as in option three and including the removal of the 30% cap on the highest recycling targets which was imposed in December 2004. These options are further expanded on in Appendix A. ALG Officer Response: ALG TEC Executive Sub-Committee Defra recycling targets consultation 67 Agenda Item 10 09 February 2006 4. Six boroughs and the North London Waste Authority provided comments to inform the ALG’s response, which was sent to Defra on 27 January 2006. This paper seeks to inform ALG TEC of the officer response sent to Defra, and gain endorsement of this (please see Appendix B for the officer response). 5. On the balance of the responses received, boroughs are generally in agreement that out of the options presented, Option 3 is preferred. Retention of the 30% cap on the best performing boroughs still allows progress beyond this target, but without the potential to be penalised for failing to meet the higher targets that Option 4 would require. Option 3 also allows the lowest performers to be set slightly higher targets to bring those boroughs more into line with others, and creates a more level playing field for the Landfill Allowance Trading Scheme. Financial Implications 6. All of the options available have financial implications for boroughs: Option 1 may superficially appear to allow savings if compulsory targets are scrapped. However, other drivers, such as increasing landfill tax and LATS targets mean that landfill diversion will still be required, and at this time, recycling and composting are two of the most cost effective approaches to achieving this. Option 2 may appear less onerous for lower performing boroughs, but again, the requirement to increasingly divert waste away from landfill in the future means that recycling rates are likely to have to reach such levels anyway. Option 3 is similar to Option 2. However, it requires the lowest performing boroughs to reach 20% rather than the current target of 18%. Due to future diversion targets, the financial implications may be similar to option 2. Option 4 may be more costly to boroughs in terms of penalties, if higher targets set above the 30% cap are then not achieved. Legal Implications ALG TEC Executive Sub-Committee Defra recycling targets consultation 68 Agenda Item 10 09 February 2006 7. None. Equalities Implications 8. None. Appendices 9. Appendix A: Extracts from Defra consultation paper on recycling targets. Appendix B: ALG officer response to Defra recycling targets consultation. ALG TEC Executive Sub-Committee Defra recycling targets consultation 69 Agenda Item 10 09 February 2006 APPENDIX A: Excerpts* from Defra’s recycling consultation document “Options for local authority statutory performance standards on recycling and composting in 2007/08”. (*for the full text, please go to the following internet link: http://www.defra.gov.uk/corporate/consult/recyclingcomposting/consultation.pdf ) 1. SCOPE OF THE CONSULTATION Background 1.1 Statutory Performance Standards (recycling targets) for recycling and composting have formed an important component of the Government’s plans to improve waste management in England. The overall challenge remains to break the link between economic growth and the amount of waste produced and to drive the management of waste up the waste hierarchy of reduction, re-use, recycling and composting, and energy recovery. 1.2 First set in 2000, the current targets for all English local authorities run until 31st March 2006 and are designed to deliver the Waste Strategy 2000 headline target to recycle or compost at least 25% of household waste by 2005. Further national targets have been set in Waste Strategy 2000 rising to at least 30% by 2010 and at least 33% by 2015. Since 2000 there has been a considerable amount of progress by local authorities in pursuit of these targets and numerous developments in Government policy, including but not limited to the Landfill Tax Escalator and implementation of the Landfill Allowance Trading Scheme (LATS). In light of this progress and in order to ensure continued progress on recycling and composting in England, this consultation proposes future targets for recycling and composting of household waste for 2007/08. What is covered by the paper. 1.3 This paper outlines a basic proposal for the extension of the existing Statutory Performance Standards to the year 2007/08. It does not propose any targets are set for the year 2006/07 as local authorities need sufficient time to plan for new targets. Consideration is also given within the proposals to increasing the Statutory Performance Standards for those local authorities with the lowest levels of recycling and composting in 2005/06 and removing the cap on the highest performers set in December 2004 at 30% for 2005/06. This consultation paper does not discuss ALG TEC Executive Sub-Committee Defra recycling targets consultation 70 Agenda Item 10 09 February 2006 recycling and composting targets beyond 2007/08. The current review of Waste Strategy 2000 is considering a number of measures for the future direction of local authority and wider waste streams including the role of statutory targets. A progress report on the review is planned to be published by Defra by the end of this year which will include consideration of the form and focus of any future targets. 1.4 Four basic options are outlined in this consultation: Option 1: Option 2: Option 3: Option 4: do nothing; set statutory performance standards in 2007/08 for recycling and composting for all local authorities equal to the level of their targets in 2005/06; set statutory performance standards for recycling and composting in 2007/08 for all local authorities equal to the level of their targets in 2005/06 except for those local authorities with a target of 18% in 2005/06 who would be required to raise their performance to 20%; and setting statutory performance standards for recycling and composting in 2007/08 as in option three and including the removal of the 30% cap on the highest recycling targets which was imposed in December 2004. The merits and demerits of these options are outlined in the consultation and further in the associated Regulatory Impact Assessment. OPTION ONE – Do Nothing: 4.4 The option exists to set no further statutory performance standards for local authorities beyond 2005/06 which would offer the freedom to local authorities to perform at the standard deemed to be the most appropriate to their local circumstances as set out within the context of their local municipal waste management strategy and (for Waste Disposal Authorities) the requirements of the LATS. 4.5 While some authorities will continue to maintain or increase recycling as a result of local priorities or to meet LATS targets others may not plan their programmes in accordance with the waste hierarchy. There is also the potential as indicated in paragraph 3.10 that without statutory recycling and composting targets for Waste Collection Authorities after 2005/06 and in the face of other local budgetary pressures there is a risk that some local authorities may decouple from the successful partnership working currently being progressed in two-tier local authorities. ALG TEC Executive Sub-Committee Defra recycling targets consultation 71 Agenda Item 10 09 February 2006 4.6 The “do nothing” approach does not give any assurance that levels of recycling and composting will ensure continued progress towards our national recycling targets. There is a very significant risk that this could lead to failure to meet the EU stringent landfill reduction targets. It could also lead to very variable levels of service provision across England. This could undermine the government’s attempts to increase participation in recycling activities since the evidence shows that easy access to recycling opportunities is essential to changing behaviour. 4.7 Modelling indicates that the “do nothing” option could deliver recycling rates up to 27.1 per cent. However, the modelling is based on the theoretical assumption of optimal joint working in two tier areas, responding to the drivers (at the waste disposal authority level) of landfill tax and LATS. Therefore there is a risk that in reality this level of performance will not be realised in the absence of future recycling targets for all local authorities, which would also put at risk maintaining the trajectory towards the first Landfill Directive target in 2009/10 4.8 In light of this the “do nothing” option is not the preferred option of Government. OPTION TWO - Maintaining the level of recycling performance at 2005/06 levels: 4.9 This option is to set statutory performance standards for recycling and composting in 2007/08 for all local authorities equal to the level of their targets in 2005/06. This essentially acts to freeze the current targets for all local authorities and requires the maintenance of performance at the same level in 2007/08. (Individual local authorities retain the discretion whether to perform above the level of their statutory performance standard.) These targets would be measured in the same way as the 2003/04 and 2005/06 targets by combining the data sources from Best Value Performance Indicators 82a and 82b. A list of the proposed new statutory targets for all local authorities created by this option is shown in Annex B. 4.10 Any local authority that fails to reach its 2005/06 target in the year 2005/06 will therefore be required to attain it by 2007/08 (in 2003/04 43 per cent of local authorities failed to reach their target) and can expect to be subject to some form of engagement or intervention by Government following the announcement of 2005/06 performance. (See comments in paragraph 4.22 regarding Defra’s proposals for engagement and intervention in poor performing recycling authorities). 4.11 This option has the advantages that it will ensure continued progress towards national recycling targets, Modelling indicates that this option would deliver a national recycling and composting rate of approximately 28.5 per cent in 2007/08. ALG TEC Executive Sub-Committee Defra recycling targets consultation 72 Agenda Item 10 09 February 2006 4.12 The option also has the advantage of ensuring that Waste Collection Authorities (in two tier areas) will have obligations that encourage them to continue working in partnership with their Waste Disposal Authorities. It will also ensure that a certain level of service provision for recycling is provided throughout England and will maintain the focus for achievement for the 43 per cent of local authorities who failed to achieve their 2003/04 targets. This proposal should also help to ensure that LATS targets are met across the country as we progress towards the EU target in 2010. 4.13 It should be noted that the last Spending Review (SR04) increased the EPCS block to fund, amongst other things, local authorities achieving their 2005/06 performance standards on recycling waste with continuing improvements thereafter on a small scale. Therefore, the extension of the existing targets regime as proposed in this option is seen as the minimum needed to ensure that all local authorities continue to play their part in meeting the government’s objectives and European obligations. OPTION THREE - Maintaining the level of recycling performance at 2005/06 levels and increasing the floor level of recycling to 20 per cent: 4.14 This proposal would have the same effect as Option Two in that all local authorities would be set statutory performance standards for recycling and composting equal to the level of targets set in 2005/06 with the exception that the existing ‘floor level’ of recycling performance (the lowest level of statutory performance standard in 2005/06) is increased from 18 per cent to 20 per cent for 2007/08. This would have the effect of increasing the statutory performance standard for the 143 local authorities whose current 2005/06 targets is 18 per cent or less. 4.15 This option would have similar advantages to Option 2. In addition it would ensure greater progress towards our national recycling targets. Modelling estimates on this proposal suggest that the effect of increasing the floor level of performance will be to increase the national recycling and composting rate to 28.65 per cent in 2007/08. 4.16 This option also has the advantage of focussing on improving poor performance by requiring the local authorities with the lowest level of targets to go some small way to closing the gap on those local authorities at the top end of the performance league. It will also help to ensure a more even level of service provision across the country. 4.17 This proposal aims to continue the forward momentum on recycling and composting in England and to require in particular those local authorities with the lowest performance to improve with respect to the rest. It also ALG TEC Executive Sub-Committee Defra recycling targets consultation 73 Agenda Item 10 09 February 2006 does not place unfunded burdens on local authorities. As such this is the Government’s preferred option. OPTION FOUR - Maintaining the level of recycling performance at 2005/06 levels, increasing the floor level of recycling to 20 per cent and removing the 30 per cent cap from those authorities originally given targets in excess of 30 per cent: 4.18 In December 2004 Government announced that Statutory Performance Standards for recycling and composting of household waste would be capped at 30 per cent in 2005/06 in recognition of the fact that, while many local authorities were able to deliver and sustain very high levels of recycling, in some circumstances local authorities were unable to deliver this degree of step change in the time available, or could only do so at disproportionate short-term cost. 4.19 In proposing new statutory performance standards for 2007/08, consideration has been given to removing this cap. This would have the effect of reinstating the original individual performance standards in the range of 31-40 per cent for the 104 local authorities whose targets were reset to 30 per cent. A list of those local authorities that under this option would receive new Statutory Performance Standards in 2007/08 in excess of 30 per cent is attached in Annex D. Such an approach would no doubt be seen as a confusing signal to those authorities directly effected. While adding just over 1 per cent to the national recycling rate (taking it to 29.7 per cent), this option would cost an additional £48m (2005/06 prices). Given the previous options put us well on the way to meeting the national target of 30 per cent in 2010 and our EU Landfill Directive obligations in 2009/10, this brings forward increased performance and financial cost before it is necessary and before local authorities will have had sufficient time to plan to implement such a step change efficiently. Therefore, this option is not the preferred option of Government. ALG TEC Executive Sub-Committee Defra recycling targets consultation 74 Agenda Item 10 09 February 2006 APPENDIX B: ALG officer response to Defra recycling targets consultation. Defra consultation- Options for local authority statutory performance standards on recycling and composting in 2007/08 Contact Officer: Date: Telephone: Jared Boow Job title : 25 January 2006 020 7934 Email 9951 : Principal Environment Policy Officer [email protected] 1. The Association of London Government (ALG) welcomes the chance to submit a written response to Defra’s consultation on options for local authority statutory performance standards on recycling and composting in 2007/08. 2. The following comments represent the views of London boroughs, many of whom will have also made individual responses to Defra. Please note that due to the timing of the consultation, this is an officer-level response. Officers will therefore seek ALG Transport & Environment Committee (TEC) endorsement of these comments in early February 2006, and will forward this endorsement or any amendments made by TEC to Defra. 3. Boroughs are generally in agreement that out of the options presented, Option 3 is preferred. Retention of the 30% cap on the best performing boroughs still allows progress beyond this target, but without the potential to be penalised for failing to meet the higher targets that Option 4 would require. Option 3 also allows the lowest performers to be set slightly higher targets to bring those boroughs more into line with others, and creates a more level playing field for the Landfill Allowance Trading Scheme. Three boroughs with the lower target have also already reached 18% in 2004/05, while trends indicate at least six more boroughs are likely to achieve it by 2005/06. Therefore, a slightly raised rate to 20% for 2007/08 will help to continue this impetus. ALG TEC Executive Sub-Committee Defra recycling targets consultation 75 Agenda Item 10 09 February 2006 4. Boroughs agree that those failing to meet their Statutory Performance Standards should expect to receive some form of engagement or intervention from Government. However, Government must also recognise that poor performance may be for a variety of reasons, which may often be outside the immediate control of the borough. Low performance may not reflect the resources and processes that boroughs have put in place; therefore any intervention must account for this and not take the form of punitive measures which are likely to only further inhibit improvements in performance. 5. Current and 2007/08 targets originate from historic performance in 1998/99, and not the potential of individual boroughs to recycle. It is therefore suggested that Government needs to revisit how future targets are set, including incorporating criteria such as: the type of authority (i.e., rural, urban, metropolitan and inner city); the number of higher rise properties in the authority; and the average size and number of gardens in the authority. 6. Further to this, the potential level of investment required to push recycling and composting figures even higher at the top end of the scale could be disproportionate to the returns achieved, in comparison with changing the focus to diverting waste from landfill (which obviously still incorporates recycling and composting at the top of the waste hierarchy). In terms of setting targets for future years therefore, boroughs suggest that Government needs to look beyond recycling and composting targets and move towards a wider perspective. This would for example, incorporate the Landfill Allowance Trading Scheme, and take into account the performance of boroughs that have invested in technologies which divert waste away from landfill, in line with the European Landfill Directive. In addition, Defra’s Waste Performance and Efficiency Grant (WPEG) still has two years to run. Future target setting would therefore be better informed if the benefits made from investments under this programme were taken into account. 7. The review of the Mayor’s powers could see changes regarding who is responsible for certain waste sites and assets, which could affect borough recycling figures. Future target setting therefore needs to take into ALG TEC Executive Sub-Committee Defra recycling targets consultation 76 Agenda Item 10 09 February 2006 account any changes to waste governance and infrastructure which could impact negatively on boroughs’ ability to achieve Government targets. 8. Boroughs have also suggested that, as recycling rates continue to improve, Government could more usefully employ its efforts towards improving national and regional markets for recyclables, so as to create more ‘room’ for recycling and make it more economic at the margin, rather than constantly raising the bar on targets. Yours sincerely, Jared Boow Principal Environment Policy Officer ALG TEC Executive Sub-Committee Defra recycling targets consultation 77 Agenda Item 10 09 February 2006