A report by Leicestershire county council has recommended plans for a 180,000 tonne waste facility are scrapped owing to “significant adverse financial impact” of the loss of £86.6m in PFI credits.
The council’s report, sought member approval to terminate the “long-term waste treatment project” and decide the time-frame and scope for a new procurement process for a residual waste treatment facility.
In its report, the council’s director of environment and transport Matthew Lugg cited the “significant adverse financial impact” of Defra’s decision to withdraw £86.6m in PFI credits in the 2010 comprehensive spending review, as well as the decision to remove the Landfill Allowance Trading Scheme, “one of the key drivers” for the council’s project.
The report also warned that the withdrawal of PFI credits has reduced the council’s income over the 25 year contract period by £6.4m per annum, a total of £160m. The report adds: “This is equivalent to the net cost to the county council of the waste treatment contract increasing by more than 25%”.
Leicestershire county council cabinet member for waste management Richard Blunt said: “Since we embarked on this project, the economy has shifted and there are planned changes in national waste policy. The financial climate has put huge pressure on public spending and the loss of the credits adds considerable costs to the project.
“Officers have assessed different ways of taking the project forward but the loss of the credits makes it financially unattractive to continue. We’re on track to meet next year’s landfill diversion target and will always strive to reduce, reuse and recycle as much as possible.”