Environment secretary Owen Paterson said the Government could not afford to fund “superfluous” energy-from-waste projects.
Responding to a grilling from MPs at an inquiry by the Environment, Food and Rural Affairs Committee, Paterson argued that the Government had already invested a “very substantial amount of public money” in waste projects.
His comments came after Norfolk County Council was informed that an offer of PFI funding for an incinerator at King’s Lynn had been taken back. The decision was based on revised Defra figures revealing the UK was on course to meet its landfill targets for 2020.
The MPs were concerned that funding was withdrawn “at such a late stage” from three major projects at Merseyside, North Yorkshire and Bradford and Calderdale. The Chartered Institution of Wastes Management also expressed concern to MRW, calling it an example of “extremely poor government process” - see below for full reaction.
Paterson said: “We have clear commitments to meet European targets on reducing waste to landfill and I’m pleased to say we’ve done extremely well on this. A number of these projects were superfluous to us meeting that target, some of them had gone over the legal requirements, and we are under pressure as a department.
“We have spent a large amount of money, around £3.5bn on 28 different projects – it’s not that we’ve held back. We have done enough to meet those European targets, and under the pressure the department’s under financially, if some of the projects have got past their time or out of kilter legally, we have decided to withdraw.”
Despite committee members questioning the “parlous” state of local government finance, Paterson said the projects could continue without PFI funding and that local authorities had their own sources of finance. “Merseyside is going to go ahead without us, so it is possible,” he said.
He added that it was up to councils to decide how to proceed: “There are other ways of dealing with waste without these incineration schemes. We can’t micro-manage every single local authority.”
CIWM response - chief executive Steve Lee
We fully understand the current pressures on departmental budgets, but Owen Paterson’s defence of Defra’s PFI withdrawal gives us cause for concern on a number of fronts.
The Government is not only relying on data and assumptions that have already been called into question to assert that the UK will meet its existing 2020 obligations, it is ignoring the fact that the current EU waste review is likely to result in higher targets. And in aiming for bare minimum compliance for municipal waste, which is disappointing in itself, it has spared no thought for commercial and industrial waste. Our latest research has identified the risk of a potential treatment infrastructure gap for C&I waste of up to 15 million tonnes/year by 2020.
This is an example of extremely poor government process. Similar to the seven projects refused credit in 2010, the local authorities involved were clearly taken by surprise by the decision, despite Defra’s ongoing involvement in all three projects. PFI is a complex and costly process and the sudden withdrawal of funding potentially wasted years of work, not to mention taxpayers’ and bidders’ money. Creating confusion and uncertainty around major, long term infrastructure projects also damages investor confidence in an industry that already faces challenges in attracting the necessary funding.
These were all significant projects designed to provide long term solutions for the diversion of household waste from landfill. Moving forward, we cannot have a government that takes such a short term approach to this type of nationally strategic infrastructure.