Select Committee on Environment, Food and Rural Affairs Appendices to the Minutes of Evidence


Memorandum submitted by Biffa Waste Services Ltd (G23)

  Thank you for the opportunity to respond to your enquiry into the role of DEFRA.

  Biffa Waste Services is the largest waste management company operating in the UK—it is the largest wholly British-owned waste management company and can justifiably claim to be the most diverse in terms of its spread of interest in industrial/commercial and domestic collection, landfill, liquid waste stream and specialist hazardous waste management systems. The company has a turnover of around £450 million at a current annualised rate and is also in the top three waste management companies operating in Belgium. We are owned wholly by Severn Trent Plc with over 110 operating centres throughout the UK. We handle 12 million tonnes of material which is treated, landfilled or recycled on behalf of an extensive customer base exceeding 65,000 in the public, commercial and industrial sectors.

  Our response pertains to the vision set out by the Department and its achievement and touches on whether the Department is engineered to deliver its objectives. The key points we would make in response are:

    (i)  when the strategy and mission statements were released we expressed our misgivings to DEFRA with specific reference to the low priority they appear to be giving to the broader canvas of sustainability issues, preferring to confine themselves to narrower fields which related specifically to food and agriculture. The seven objectives proposed were excessive and reflected in our view, the woolly thinking used to develop higher level objectives. Our three objectives designed to cover the three core elements of sustainability were proposed as:

  Objective 1—modify to "To improve the UK environment in terms of biodiversity, air and water quality, and resource efficiency by integrating these with policies across central, local, devolved and international government".

  Objective 2—to enhance opportunity and tackle social exclusion in the countryside by leading the development of a dynamic, accessible, inclusive and sustainable economy in rural areas, which does not compromise opportunity or rural services.

  Objective 3—to promote a sustainable and economically competitive food supply chain which meets consumers' requirements without compromising sustainable management in the meat and dairy, cereal, fodder and fisheries sectors, human health or internationally defined standards of animal welfare.

  Our detailed reasoning around the need for this sharper focus was contained in our letter of 24 September 2001 to Mr Dixon as part of the DEFRA consultation process and this is appended to this submission since it encapsulates areas which we continue to feel have not been addressed and are therefore highly pertinent to your current enquiry.

    (ii)  Subsequent events have shown that despite an initial flurry of consultation around the waste strategy, DEFRA appears to see itself merely as some form of modernised Department of Agriculture. Its approach to waste, resource efficiency, waste-linked energy issues, the carbon economy and the framework of budgetary or fiscal instruments necessary to drive the process have been abrogated by Cabinet Office/PIU studies or a lack of preparedness in the Treasury to discuss how the waste strategy can be delivered.

    (iii)  Regional Assembly/Governmental liaison. Understandably Scotland and Wales wish to exercise regional autonomy in the context of their local circumstances but it is unfortunate that DEFRA has been unable to encourage wider uniformity in implementation of underlying standards. This is particularly important with regards to waste—where unscrupulous operators will exploit such loopholes to their advantages by moving material about. Further examples of lack of co-ordination were revealed with the packaging regulations—perhaps DEFRA should be given more support for acting as a lead body.

    (iv)  The ratio of departmental costs to sectoral activity is lopsided. The turnover of the food and allied sectors in UK GDP is:

£17 billion
£17 billion
£12 billion
£6.4 billion
£0.5 billion

  The creation of the Food Standards Authority (FSA) covers some ex MAFF functions closer to manufacture, distribution and catering yet DEFRA appears to have a departmental expenditure limit (DEL) of £1.4 billion and an annual managed expenditure (AME) of £2.1 billion. This equates to administrative expenditure for a department that still sees itself very much linked to agriculture (rather than rural affairs) costing £1 for every £2 of sector turnover. The turnover of the direct waste industry in the UK (£4.5 billion) coupled to associated consultancy and environmental services/technologies amounts in total to at least £8 billion per annum yet the internal manning and resources given to the waste area represent a relatively small proportion of overall departmental expenditure. We are not aware of the precise figure since the last published data relates to the old DETR but is unlikely to amount to more than £0.4 billion.

    (v)  There has been a failure to align policy and regulation. There are a number of examples (not least fridges) where it is clear that the linkage between authority and responsibility for the transposition of EU environmental legislation is at some point dysfunctional between DEFRA, DTI and the Environment Agency. Different departments have different lead body status (DTI for electricals but DEFRA for global warming and ozone depletion) where policy falls between the cracks. Even when that is resolved the Environment Agency is not integrated into the process sufficiently early with a result that the necessary process technology, operating standards and enforcement regimes are not ready at the appropriate time. Fridges were the worst example of this because they were subject to a regulation with an absolute date of application—but they revealed the tip of an iceberg when it came to the landfill, end life vehicles and other directives where transposition is subject to blurry boundaries which end up being decided on the altar of inter departmental blame shifting.

    (vi)  DEFRA could have done much more in creating a healthy investment framework for new technologies working in conjunction with the Environment Agency. The Environment Agency should be far more outcomes focused—defining absolute levels of emissions based on scientific credibility, practical deliverability and the implications for UK competitiveness in terms of standards applying elsewhere in Europe. In effect we have standardised European directives emerging but differentiated levels of enforcement or agreement on transboundary operating standards. DEFRA could have done far more at a European political level to develop a strategic framework on internal compliance standards.

    (vii)  DEFRA needs to be the single mouthpiece for environmental policy and implementation if it is genuinely the lead Government body. The reality is that the Environment Agency acts both as a regulator and an advisory body on everything from best technological solutions through to deciding on its preferred mix of regional waste strategies. In many of these areas the EA are extremely proficient—the problem is that they are first and foremost a regulator and DEFRA should decide whether the advisory functions are best reversed back into its own province and rebranded along similar lines to the US Environmental Protection Agency Advisory Group. Without doubt the EA are probably seen as a better repository of the public interest by the public as a whole than DEFRA in London—not helped by the fact that DEFRA have lost many key staff in this latter area (and presumably the financial resources that such a function demands). It is up to the Minister to resolve this dilemma.

    (viii)  DEFRA has clearly experienced severe problems in sending clear messages to the Treasury regarding the delivery of the waste strategy. Funding appears to have been made available in abundance—from the New Opportunities Fund, recycling grants, environmental improvement grants and Landfill Tax Credits—on a day-to-day basis but DEFRA does not appear to have engaged the Treasury at a higher level in the need for an interaction of policy between budgetary, fiscal and regulatory instruments to develop an integrated sectoral framework for joined up thinking on delivering the waste strategy. Specifically there could have been much more cohesion with regard to increasing waste disposal taxes (particularly the Landfill Tax) and Integrated Product Policy (IPP). For years we have contended that a Landfill Tax level of £35 per tonne plus coupled to full Producer Responsibility (with first year costs rebated to specific companies for accepting IPP via reductions in NICs (National Insurance Contributions), Corporation Tax or similar measures).

  We accept that such innovative linkages between the half of the Treasury that raises money and the other half that dispenses it may be a trifle naïve at this stage in the proceedings but at the very last we would have looked to DEFRA to develop the debate for this sort of "top down" thinking.

    (ix)  DEFRA fails to see waste in the context of solutions for agriculture. Currently around 85 per cent of controlled waste is disposed of into landfill. Within 20 years DEFRA's own waste policy calls for that to be reduced to 25 per cent or less. The alternative exit routes for these materials (assuming waste production levels continue at the current levels) will be composting, recycling and energy. In the first and third sectors the interaction with agricultural bio systems is obvious—first as a source of material supply (manufactured soils) and secondly as an exit route for by-products (animal effluent, animal remains, straws, packaging and similar materials to gasification/energy processes). Yet this important exit route is now mired in confusion as a result of action by the EA to invoke the Animal By-products Regulations without consultation, reason or rational science.

    (x)  DEFRA could do more to champion the case for a national integrated framework for resource flow measurement in the economy. Currently Biffaward, our Landfill Tax Credit Scheme, has committed around £8 million to the development of 50 million-odd studies into resource flows in specific geographic, material stream and economic sectors. The co-operation from DEFRA on this project and the Environment Agency has been positive but we would like to see a more strategic debate pushed forward by Government (rather than us!) which decides how this framework should evolve as an issue of national strategic importance (or not as the case may be!).

    (xi)  DEFRA is sending mixed signals with regard to e-Government (e-gov at local as well as central). In the submissions we have seen, DEFRA appear to be quite complacent—not referring to there being a problem or to the fact that the necessary solutions entail. We find this quite surprising on the basis that the absence of accurate statistics—certainly with regard to municipal waste arisings—is constantly referred to in the waste strategy. Either this suggests that the shortcomings in the waste side have been ignored (in what is possibly an e-literate agricultural sector) or someone is unaware of the issues. It is for this reason that we are proposing to apply Landfill Tax money to a nationally integrated solution for a relational database on municipal waste flows from production through to end disposal and present this to DEFRA as a model. Nevertheless there needs to be more overt linkage communicated to the private sector with regard to the interconnectivity between such a database and (for instance) the NHS (with regard to domiciliary discharges from hospitals) to determine accurate assessments of clinical waste arisings or between other installed infrastructures such as LASER, NLIS, NLPG (systems which are seen as the emergent repositories for data on household locations and ownership) for waste scheduling and recovery, contaminated land and so forth. As a major operator in the municipal waste collection business we would welcome sectoral dialogue on how the Government Gateway might require us to modify our own IT approaches with regard to access, security, message transmission, data routing and similar information flows.

    (xii)  DEFRA and knowledge exchange. DEFRA should take a lead in this. In line with recent recommendations from the Chairman of the appropriate think tank—David Arculus—we commend to DEFRA the benefit of people exchange between them and industry. The Environment Agency have been keen to initiate such processes (clearly on a basis where neither party feels compromised and we would be keen to support similar initiatives if asked).

  The above comments represent interim observations at DEFRA's first anniversary—but we feel that had the focus suggested in the attached letter been listened to we might have been a little less critical in our observations.

27 May 2002

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