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Defra gave 'good support' to troubled waste PFIs, audit finds

An influential spending watchdog has found that Defra “gave good support and guidance” to three local authority PFI waste contracts that experienced “significant” delays.

The three projects involved were entered into by Surrey County Council (Charlton Lane Eco Park), Norfolk County Council (Willows Power and Recycling Centre) and a joint venture between Herefordshire Council and Worcestershire County Council (EnviRecover).

The National Audit Office (NAO) report said that it was not its purpose to decide whether the contracts offered value for money, but to set out “roles and responsibilities of the parties involved in the three contracts and examine those issues over which Defra has direct influence or involvement”.

The auditing body said correspondence indicated “there was a lack of clarity over both the facts and figures relating to these three projects, and the roles and responsibilities of the parties involved”.

Despite Defra being prohibited from intervening in the central planning process, which is overseen by the Department for Communities and Local Government, NAO found that the organisation had “attempted to mitigate the risk of planning delays” by giving local authorities guidance on planning issues.

However, the report said that due to Defra’s funding agreements with Surrey and Herefordshire and Worcestershire, which were “inherited from predecessor departments”, it was difficult for it to withdraw or amend financial support, even when infrastructure had not been delivered as planned.

The sites in Surrey and Herefordshire and Worcestershire were both plagued with problems surrounding planning permission and new agreements had to be made, while the ill-fated Willows project in Norfolk was cancelled altogether earlier this year.

In Surrey’s case a 25-year contract was signed with SITA Surrey in 1999 which included the construction of two energy-from-waste plants. However, planning permission not granted for the sites at Redhill and Capel.

The joint venture between Herefordshire and Worcestershire for a 25-year integrated waste contract with Mercia Waste Management also ran into trouble with planning permission and Defra reduced its funding support from £143m to £113m in December last year.

The report was compiled by analysing Defra’s data on PFI credits and interviews with current and former members of its Waste Infrastructure Delivery Programme team, the four local authorities involved in the project, Treasury officials, the private sector contractor for the Norfolk project.

The report will form the basis of a hearing of the Public Accounts Committee.

Readers' comments (3)

  • "The National Audit Office (NAO) report said that it was not its purpose to decide whether the contracts offered value for money" - strange that, as the NAO had originally announced that: ""The NAO will be looking specifically at three PFI waste incinerator projects to gain insight into the role of Defra in promoting value for money in such projects..." This has now been removed from the NAO website, although it is still available from: http://web.archive.org/web/20131015122252/http://www.nao.org.uk/press-releases/defras-oversight-pfi-waste-projects/

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  • MRW's headline is misleading. The Report does not say Defra gave good support, instead the report simply acknowledges that a 2010 assessment found Waste PFI was good compared to other PFIs. Presumably this means Waste was deemed to have been better handled than Hospital PFIs, which is a bit like saying Malaria is good compared to Smallpox.

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  • Hi Shlomo, thanks for the feedback. The headline was taken from the NAO summary that accompanied the results of the report. In full, it reads 'Today’s report finds that the Department has given good support and guidance to the local authorities involved'.

  • Thanks Editor. Despite that being on the NAO site, it is still misleading as it does not accurately reflect the content of the report. It is not MRW's fault that the NAO press release is confusing, but that does not make the headline accurate.

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