In the Budget of April 2003, Chancellor Gordon Brown signalled the Government's decision to reform the Waste Minimisation and Recycling Fund into a waste management performance reward fund.
In August of that year, Environment Minister Elliot Morley announced that the new Performance Reward Grant (PRG) would be introduced in 2005/6.
Between January and March 2004, the Government consulted on a proposed new grant design. Around 120 people responded, and only at the end of December were the results of the consultation released.
Respondents to the consultation agreed that recycling and composting are the right criteria for the PRG as this would fit with local authorities' statutory performance standards for 2005/6.
But some people argued that composting would provide "a perverse incentive to increase the amount of organic material in the waste stream" and that it might disadvantage metropolitan areas where the amount of green waste is likely to be low.
However, some stakeholders argued that given Landfill Directive targets and local authority obligations under the Landfill Allowance Trading Scheme (LATS), the grant should focus on biodegradable municipal waste.
Some also called for more focus on waste minimisation.
Local Authority Recycling Advisory Committee chairman Andy Doran said: "Local authorities still face the dilemma with regard to handling organic wastes, as the comments showed a concern as whether using funds to increase diversion of organics, through a centralised collection, would continue to work against home composting. However, with the pressing challenges of the Landfill Directive biodegradable mechanical waste diversion targets, organic waste features higher than ever."
The second question asked if it is right that each of these two aspects of recycling and composting performance be rewarded.
Almost 60% of respondents agreed that rewarding both improvement and absolute performance was reasonable.
Some local authorities argued that proposals to measure improvement in performance against a 2003/4 baseline would be unfair as authorities who had improved performance since 1998/9, but that had not yet reached the threshold for an absolute performance reward, would effectively be penalised as they would find it harder to improve further.
The next question asked if it was right to cap the size of awards under the PRG, with 70% agreeing that it is. It was highlighted that a minimum reward ensures some level of certainty.
In the fourth question, on whether it is right to weight the grants distributed for meeting the performance criteria, 79% of respondents said it should be weighted. However, many respondents were worried that population would be the factor used to weight it as this would affect rural areas that would have increased transport costs. There was also concern about this in areas that have high influxes of visitors and also some wanted deprivation factors to be included.
Question 5 asked whether the PRG should be split among the three waste authority types and 75% agreed it should. Only 10% disagreed, with the remainder giving no answer.
The next question asked for views on the interaction between the PRG and Local Public Service Agreements (LPSA). Some respondents felt that it would not be appropriate to reward authorities that might already benefit from an existing LPSA. But equally,