The Rethinking Waste Crime report, written for the Environmental Services Association (ESA) and ESA Education Trust by Eunomia, has grabbed the headlines. It warned that waste crime in England was “entrenched” and has a negative economic impact of more than £600m.
The ESA said this is an accurate update of its Britain’s Dirty Secret report of 2014, and that it focused on England because of better available evidence.
The report said “weak regulation” was a major factor behind crime in the sector and that the waste carrier, broker and dealer registration process was woefully inadequate. To prove this point, Eunomia applied for a waste carrier certificate under the name of a dead dog – and was successful.
It will surely make uncomfortable reading by regulators and ministers. Media reaction has been swift and widespread – the report made the front page of the Times and two Sky journalists were at the report’s launch at Westminster, which is unusual for our sector.
As the UK heads for a General Election and Government departments and bodies such as the Environment Agency (EA) are restricted in what they can say under the rules of purdah, Defra confirmed it would not be responding to the report.
It is perhaps unfair that, after receiving something of a kicking, neither Defra nor the EA can defend themselves until after the election.
The EA’s deputy director for waste regulation, Nicky Cunningham, was also at the launch event. In her recent Big Interview with MRW, she was upbeat about a second Defra waste crime consultation planned for this summer, which will give the EA powers to check on the competence and financial capabilities of someone applying for a permit. It is not yet known if this will prevent dead animals from applying.
What Defra’s precise plans will be after the election is anyone’s guess, and there is the distinct possibility of yet more upheaval due to ministerial reshuffling. But thanks to the ESA, we are left with the best estimate to date on the scale of a very serious problem.
Misclassfication of waste and fraud
Estimated cost: £129m
Eunomia admits this is hard to estimate because of lack of evidence, and its figure largely comes from one source. Landfill tax evasion, long identified by all UK regulators UK as a major problem, is identified as the main offence. The overwhelming proportion of the overall figure is based on the ‘landfill tax gap’ calculated by HM Revenue & Customs. In 2014-15 this was found to be £150m for the whole of the UK, and the report estimated this equates to £128m in England. By contrast, the EA investigated misdescription of waste last year and found 63 cases that were referred to HMRC accounted for £18m-worth of landfill tax avoided. The report also mentions criminals seeking to defraud producer responsibility schemes and deliberate misclassification of hazardous and gypsum wastes.
Estimated cost: £209m
Eunomia found that the EA dealt with 126 serious fly-tipping incidents in 2015, and councils were faced with 936,000 incidents in 2015-16. Part of the calculation was based on the associated costs. There are no exact figures for fly-tipping on privately owned land, but the report points to an estimate by the Country Land and Business Association that its members are out of pocket by up to £150m as a result. Fly-tipping is a visible problem the public really cares about – and therefore a possible vote-winner. In April, the Government launched a litter strategy that offered local authorities greater powers. But the ESA was unsatisfied, and criticised the Government’s unwillingness to switch responsibility for paying for clearing litter from councils to waste producers.
Illegal waste sites
Estimated cost: £98.3m
The main loss for the public sector due to illegal sites was identified as lost tax revenue. It also deprives the private sector of legitimate business and prevents recyclers from gaining material. Between 1 January 2013 and 31 December 2015, an average of 100 new illegal sites in England were uncovered each month.
Serious breach of permits and exemptions
Estimated cost: £87.2m
The report focuses on deliberate breaches rather than just bad management. According to EA data, 94 serious pollution incidents in 2015 were due to waste management activities. Also examined is the role of exemptions, which are commonly used for low-risk activities and usually last three years. There are around 530,000 registered exemptions across 94,000 sites. Eunomia based its figures on an assumption that 5% of exemptions operate in breach of their conditions. The EA is expected to publish a review of the higher-risk exemptions this summer.
Other estimated costs
Illegal exports: £30.2m
A conservative assumption that 2% of waste exports are being undertaken illegally would mean that approximately 320,000 tonnes of waste is being exported illegally.
Illegal burning: £19.2m
A “growing problem” for the public sector, there are significant costs to both the fire service and EA in managing incidents and preventing harm.
Local authority and EA enforcement activities: £31.7m
This is funded by charges on operators along with Defra grants.