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It is broke - so fix it for fairness

I recently argued that local authorities have been too quiet about the fact that the burden of the cost of recovery of materials rests with LAs who recover the costs from householders as citizens (through taxation) rather than at the point of sale as consumers. 

I speculated that LAs might still be stuck with a 19th century attitude to public duty when there are nowadays more sophisticated ways of making the polluter pay. 

On reflection perhaps many LAs have been speaking more loudly than I gave them credit for – but it’s by action rather than words, trying to drive down the cost of collection through adoption of increasingly commingled collection streams. 

The waste industry is happy to collude with this as it means building big infrastructure, running basic refuse vehicles and taking the margins that go with it. The problems with this are that it places a burden on the reprocessing industry to clean up the contamination, or that the product is so poor that it is only fit for sub optimal (from a carbon and financial viewpoint) re-use such as glass to aggregate. In the world of local authority indicators, statutory or post-statutory, the crude recycling rate still seems to be unquestioningly King.

So, LAs are still paying more than they might to collect this stuff AND there is extra cost burden on industry. A recent paper from the Resource Association (RA) concludes that it costs RA member processors (some of the major players in the market) about £51m annually to deal with contamination.

The RA report is swift to point the finger: “Our view is that research shows starkly how notional cost savings in changes to municipal recycling collection systems have simply shifted costs significantly towards manufacturers in the drive for quantity over quality”. The report does not attempt to calculate how much this transition has saved their local authority suppliers; it might not be quite as “notional” as the report casually suggests. 

Similarly the RA report does not suggest that this £51m might be better ploughed into incentivising better collection but does note that the burden acts as a real barrier to future investments and is also costing jobs in the UK economy, by limiting expansion opportunities for UK reprocessors.

Coincidently there has been a recent flurry of concern among some Local Authorities that the transposition of the end-of-waste criteria for the UK could preclude material that does not meet the criteria being counted as recycling.

Some LAs blame reprocessors for lobbying for higher standards. They seem aggrieved that Defra on the one hand historically set targets for LA recycling (which, to be fair, were for a long while the main driver behind investment) and on the other could be forced to conclude that some of what LAs do might no longer counts as recycling.

The recent rise of DCLG’s agenda has, to put it mildly, further muddied the water and of course there are the unknown implications of the Judicial Review of the transposition of the revised Waste Framework Directive. Defra and most LAs seem to be assuming the challenge will be lost. If it isn’t, there will be turmoil.

It seems to me that everyone is looking inwardly and singularly at just the implication of the costs for themselves rather than how to make the circular economy more efficient, transparent and reduce the costs across the board. 

What most people will agree on is the current system costs them more than it should. I don’t believe the answer lies with the Advisory Committee on Packaging’s conclusion that LAs should be given a duty to collect high quality material; the idea of loading more duties on LAs at this time is clearly again just driven by reprocessor interests and not well thought out.  I continue to believe the solution lies with a better designed and regulated system of producer responsibility.

Features of a better system would be

  • More reflection of the polluter pays principle – the cost of recovering packaging should largely be included in the sale price of the product. Those manufacturers or retailers who try to avoid the costs of doing so should be heavily penalised.
  • There should be incentives for driving material up the waste hierarchy
  • There should be specific financial incentives for more direct collaboration between LAs as material suppliers and those who use the material collected so that quality objectives are met. This could mean, for example, lower producer responsibility rates for those who can demonstrate direct assistance and can trace the consequent flow of material round the loop.   

This could get lost in the fight we’ll all have just to survive. Or we could finally face up to the fact the current system isn’t working and a new one could provide a fairer way to help us all to do just that.

Steve Read, managing director, Somerset Waste Partnership

Readers' comments (1)

  • Steve is right to argue that the cost of recycling packaging particularly has fallen too much on local authorities rather than on producers and consumers. I am not sure how his proposed solutions would work, however. His first suggestion might be implemented by effectively applying a packaging tax set to recover the national cost of an efficient recycling service and adding the proceeds of that to local authority grants. But I wouldn't trust Mr Pickles or the Treasury not to offset that by reducing other grant support.

    An alternative would be to set packaging targets differently so that a proportion of them had to be met from household collections. That would generate higher PRN prices for those materials which local authorities would share in.

    Both approaches have serious administrative issues to resolve.

    The quality issue is a harder nut to crack. It will need effective regulation of the export trade as a minimum but it is a worry that the guidance from the EA just published seems to want to put much of the responsibility for that on the shoulders of local authorities.

    Maybe the reprocessors need to become more active in the sorting of waste as Shotton has done. A different vertical integration could change the paradigm - but the story about DS Smith and the SCA MRF shows there are problems with that too.

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