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Auditors raise alarm over packaging fraud

Parliament’s spending watchdog has criticised Defra for measuring packaging recycling in ways that fail to account for fraud.

The National Audit Office (NAO) said in its report Environmental Metrics that “on packaging recycling, we found that the methodology…was not sufficiently robust because it did not account for undetected fraud and error”.

Its report dealt with the need to improve the auditing of environmental performance of all kinds as part of preparations for the creation of the Office for Environmental Protection (OEP), which environment secretary Michael Gove wants to establish to handle post-Brexit environmental rules currently enforced by the EU.

Measurements of packaging recycling “were not sufficiently robust”, the NAO found, because Defra did not adjust its figures to account for undetected fraud and error, and it was unrealistic to assume that these were negligible.

“There is a financial incentive for companies to over-claim, and a particular risk that some of the material exported overseas is not fully recycled,” auditors noted.

The NAO said the packaging recycling system had “evolved into a comfortable way for the Government to meet targets without facing up to the underlying recycling issues”.

Defra had failed to ask “important questions about risks and value for money”, and did not know what value the system added or whether the Environment Agency’s approach to tackling fraud and error was proportionate.

Nor did Defra know whether material exported was really recycled or whether receiving countries would continue to accept it in the long term.

The report said it was essential for the UK to have an effective system for measuring its environmental performance so it could understand whether it was on track to meet long-term environmental goals.

While the UK was ahead of many other countries in aspects of environmental reporting, it still had “a patchwork of sets of metrics that do not align clearly with the Government’s overall objectives or with each other” and not all data was current.

Environmental Audit Committee chair, Labour MP Mary Creagh, said: “My committee recommended that the new OEP be funded by Parliament, not the Government, to avoid it becoming another environmental watchdog that the Government puts to sleep.”

A Defra spokesperson said: “We recognise the importance of putting an effective system in place to measure our performance against our ambition, building on our leading work to develop reliable data sources.

“That is why, before Christmas, we delivered on our pledge to publish a draft indicator framework.”

The Government’s resources and waste strategy, published in December, devoted a chapter to ways of improving environmental data collection and handling.

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