Tax payers could pick up the bill for the Governments failure to tackle EU waste targets early enough, a National Audit Office report has revealed.
Delays in getting facilities ready to divert biodegradable waste from landfill, mean that challenging 2013 targets could be missed. This would expose the UK to EU fines of several hundred million pounds.
Committee of Public Accounts chairman Edward Leigh said the Department for Environment, Food and Rural Affairs had sat on its hands for four years after the targets were set in 1999.
Lack of focus
The NAO report, Defra: managing the waste private finance initiative programme, found: The PFI programme was not focussed on landfill diversion, and there was no systematic approach to bringing forward and prioritising project.
Leigh said: It actually took the Department until 2003 to develop a practical national strategy involving local authorities using private finance initiatives to procure new waste treatment plants.
But Defra has improved the rate of progress, the report found. The creation of the Waste Infrastructure Delivery Programme in July 2006 accelerated the delivery of larger projects. But the progress was not fast enough to pre-empt the current tough financial climate which began in 2008.
By nature, waste PFIs carry higher financing costs because of the complex risk attached. This has now been compounded by the present downturn. Leigh said: The programme is being held back by the difficulty of raising private finance in the present financial climate and problems in obtaining planning permission. Two high profile examples of large-scale projects that may be affected by this are the waste PFIs of the £3.3bn Greater Manchester Waste Disposal Authority and the £3bn Merseyside Waste Disposal Authority.
Leigh also said: At the current rate of progress, there is a very real danger of our failing to meet the EUs 2013 waste reduction target.
A Defra spokesman said: This report acknowledges that the PFI programme is progressing well and even though meeting the 2013 target has always been a challenge, Government and local authorities are working hard together to meet it.
Report recommendations for Defra include:
* developing key performance indicators with performance statistics published yearly
* introducing greater access to benchmarking information for local authorities to enable them to plan procurement more effectively
* offering more financial analysis and support to ensure waste PFI risks are reasonable
* increasing Defras project oversight after contracts are awarded
* encouraging early consultation on waste project technologies with local residents
* gathering more information on alternative forms of procurement to PFIs to assess how theyll take to deliver.
EU landfill reduction targets for England
* By 2010: reduce BMW landfilled to 11.25 million tonnes a year (50 per cent of 1995 levels)
* By 2013: reduce BMW landfilled to 7.5 million tonnes a year (50 per cent of 1995 levels)
* By 2020: reduce BMW landfilled to 5.25 million tonnes a year (35 per cent of 1995 levels)