Audit Office criticises DEFRA’s PFI programme

The Environment Department (DEFRA) must "reduce substantially" the time taken to procure waste plants and bring them into operation if the UK is to meet EU targets on diverting waste from landfill, the National Audit Office says.

In January, the NAO issued a report on DEFRA’s management of its waste Private Finance Initiative programme.1 Under this, local authorities bid for funding - so-called "PFI credits" - to pay waste management firms to build and operate plant.

Some 18 councils have received PFI funds, the report says, but only two have built all the infrastructure needed to meet the EU targets.

It takes up to nine years to develop waste projects, it adds, and PFI projects have been delayed by an average of 19 months, often due to problems with securing planning permission and finance.

However, it is also because local authorities have struggled to write adequate business cases to gain DEFRA approval.

DEFRA should give councils greater access to data on the expected costs of waste facilities under PFI so that their business cases are not rejected, the NAO says. It should also tell them what figures to use for key variables such as expected levels of waste growth.

If the time taken to procure projects is not reduced substantially, the UK will miss its target to reduce the amount of biodegradable municipal waste sent to landfill to 50% of 1995 levels by 2013.

As a worst case, it could miss the target by nearly 10 million tonnes and potentially face EU fines of £366 million.

Last year, the Audit Commission issued a report on local authority progress towards the EU target which reached similar conclusions (ENDS Report 405, p 16 ).

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