Landfill Tax Credit Scheme must be reformed if UK is to comply with European Directive

Launched in 1996, the Landfill Tax Credit Scheme (LTCS) was, amongst other things, designed to encourage sustainable practices in waste management. However, just a third of the scheme’s funds have gone on sustainable waste management, with no co-ordination of spending to achieve maximum impact, says the Environment Industries Commission (EIC), which represents over 200 companies in the environment industry.

The EIC’s criticisms coincide with the launch by the Government of a consultation on the future of the LTCS, seeking views on funding priorities and potential funding mechanisms for the scheme.

“The Landfill Tax Credit Scheme has failed to play a central role in transforming waste management practices,” said EIC Director Merlin Hyman. “Urgent reform is therefore now essential to provide greater direction and focus, particularly in funding to support sustainable waste and resource management.”

The Government has also set its own targets for major reductions in the volumes of waste ending up in landfill, and a large increase in the amount of waste recycled and reused.

The EIC is calling for 75% of LTCS funds to be spent on sustainable waste and resource management, such as on-site remediation and waste minimisation, with the remaining money designated for local projects. There also needs to be a new co-ordinating body to manage and distribute the revenues going to waste management. Such a body would co-ordinate strategic research into sustainable waste management practices, and would also be the channel for all government support for increased recycling.

“A new co-ordinating body should be established to manage the spending of 75% of the scheme’s funds on key areas such as recycling, waste minimisation and sustainable land clean-up,” added Hyman. “A reformed scheme could be a key driver in delivering the Government’s new Waste Strategy and meeting the challenge of the Landfill Directive.”

Other recommendations from the EIC include the development of clear and simple guidelines on gaining value for money, but without inhibiting innovative proposals. Local authorities should be prevented from exerting undue influence on the allocation of funds, says the EIC.

However, there are a number of positive aspects of the LTCS, according to the EIC. Funds have provided valuable local development opportunities and job creation, and it has raised the profile of waste management in general locally. The scheme has also enabled some research projects that would not have otherwise seen the light of day, has acted as a magnet for new ideas, and has created a multiplier effect, releasing other government and European funding, says the EIC.

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