Local Authorities face huge liabilities from landfills

The recent findings from the Local Government Association (LGA) that Britain will run out of landfill space in less than eight years should be of grave concern to local authority finance directors as much as the recycling lobby.

By Edward Dent, Managing Director, Blackfield Land.

While the study raises many questions about the strategic direction of UK waste policy, it should also be asking what local authorities and other site owners will do with these sites once they are full. While open, landfill sites can operate as a profitable business. However, once full, they become a significant financial and environmental liability.

Under current rules, any owner looking to close a landfill site has to make financial provision in order to guarantee the monitoring, maintenance and security of the site for a minimum of 60 years into the future and this must be shown on their balance-sheet as a contingent liability.

Cornwall Council, for example, is spending in the region of £1million per year on the maintenance of just one landfill site – and has eleven more in total under its control.

Multiplied over several decades, this is a considerable financial burden for any organisation, particularly cash-strapped local authorities looking to make savings throughout their portfolio. The problem is compounded by the fact that there is no guarantee that this liability will be lifted after 60 years. Some estimates suggest contingency payments will continue for over 100 years.

Costs of course will be even higher if any incidents – floods, explosions, escape of leachate into groundwater and soil – occur which pollute neighbouring areas and leave the owner with compensation and clean up costs in addition to their ongoing liabilities.

For example, Northamptonshire County Council recently agreed to pay out £6 million compensation after it was found that leachate from one of its old landfills had contaminated a neighbouring area of land. And Northamptonshire is not alone. Most local authorities face similar problems and the older the landfill site, the worse the potential hazard as many modern safety design features will not have been included. For many, it is only a matter of time before a similar incident occurs.

Site owners, especially local authorities, need to start planning now to minimise future costs. They should start thinking of these sites as “Blackfield Land” with the potential for development. The sites are, for the most part, large spaces with good road and communications links on the outskirts of urban areas. In other words ripe for other usage.

We have been working with a number of local authorities which have been struggling to assess their options. Many have considered measures such as creating public amenities, for example golf courses or wildlife and dog walking areas.

However, this is not a cheap option. It costs a great deal to close, remediate and restore landfill sites, and public amenities generate almost nothing in terms of return to the tax-payer.

Another option is to see the sites as resource beds, full of useful materials for recycling and other markets. Authorities could partner with energy-from-waste operators to retrospectively recycle resources, generate energy and income and then start a clean-up operation ahead of development for industrial, business or even housing usage.

They could even incorporate all aspects in a transition plan which starts with intermediate uses which don’t require major engineering works but can generate an income, followed by longer term measures to remediate and reclaim the site in full.

No local authority can afford to ignore the liabilities or the potential opportunities these Blackfield Land sites represent. Even mitigating some of the burden is better than paying the full cost.

However, unless plans are made now, the liabilities will be paid for decades to come. Yesterday’s waste will mount up to become tomorrow’s debts. Its time we paid them off.

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