Recycling firms win concessions over waste licensing fees

Small waste management and recycling businesses will have to pay lower fees than expected under a charging scheme intended to pay for regulators' costs when the new waste management licensing system comes into force on 1 May. Operators of large co-disposal landfills will have to pay higher fees than expected - but this is the only concession made by the Government to local authority complaints that income from fees will not provide enough cash for policing.1

Issued on 24 March, the charging scheme was the first piece in the jigsaw of the new licensing system under Part II of the Environmental Protection Act 1990 which comes into force throughout Britain on 1 May. A voluminous package of regulations and guidance will follow shortly.

The charging scheme is in two parts. First, fees will be payable to waste regulation authorities (WRAs) to cover their costs in processing applications for licences and their modification, transfer or surrender.

Second, an annual "subsistence" charge will be payable to WRAs to cover their costs in policing licensed sites. In carrying out this function WRAs will be obliged to have regard to forthcoming guidance on standards of site inspection and monitoring frequencies. The subsistence fee may include an extra charge to cover the costs incurred by the National Rivers Authority or its Scottish counterparts where they have been consulted in the previous financial year by a WRA in cases where it feels that water pollution is likely to be caused by a licensed site.

In general, the size of the fees will depend on the type of activity and the nature and amount of waste involved. But there are some exceptions. For example, for the surrender of licences for the treatment or keeping of waste, or for licence modifications, the amount of waste will not be a factor in determining the fee. And a fee will not be payable where an existing licence under the Control of Pollution Act 1974 does not specify the amounts of waste which may be accepted at a site, and an application to make appropriate modifications to the licence is made by 31 July.

Licence applications will have to be accompanied by the appropriate fee before they can be determined. Subsistence fees will be payable by 30 April in each year on receipt of a notice from the WRA showing how the fee has been calculated. WRAs have the discretion to revoke a licence for non-payment of subsistence fees, and the 1990 Act does not provide for appeals against their decisions.

The Government's proposals for the fees and charges were set out in a consultation paper in December 1992 (ENDS Report 215, p 31 ), and a small number of significant changes are made to these in the final scheme.

Firstly, recycling businesses - and in particular the scrap metal trade - argued strongly that the proposed fees would be punitively large for smaller firms, and would discourage recycling. The lowest tonnage band in the draft scheme was 25,000 tonnes of licensed waste input per year or less.

The Government has responded by introducing a lower band of less than 5,000 tonnes per year for the treatment and keeping of waste for recycling and other purposes - although this lightening of the load has not been extended to civic amenity sites. Thus the application fee for the treatment of waste for the purpose of recycling will be £750 and the subsistence fee £1,000 at a site in the lowest tonnage band, compared to £1,100 and £1,550, respectively, for a site licensed to accept 5,000-25,000 tonnes of waste per year.

A lower tonnage band has also been introduced for the disposal of inert wastes.

According to Environment Minister Robert Atkins, the 1994/5 subsistence charges for these lower bands have also been set at 70% of the Government's assessment of what WRAs will need to recover their policing costs in full. "This is a transitional provision which will ensure that the introduction of fees and charges does not have an immediate and adversely disproportionate impact on small businesses," he said, "particularly small businesses engaged in the recycling of waste." In fact, the "transitional provision" will extend at least into 1995/6 as well.

Operators of co-disposal landfills, in contrast, may face higher charges than expected. In the draft scheme, the highest tonnage band was set at 75,000 tonnes per year or more for active co-disposal sites, and at over 1.0 million tonnes of wastes in place for those where disposal had ceased but which still require supervision.

In the final scheme, however, additional higher bands of 150,000 and 2.5 million tonnes, respectively, have been added. Thus the subsistence fee for a co-disposal site licensed to take more than 150,000 tonnes of waste per year will be £12,375, almost 50% higher than the charge in the band immediately below. This move may reflect WRAs' complaints that the charge levels proposed in December 1992 were too low to cover their policing costs in full, although if so it is the only concession they have got.

A serious weakness of the charging scheme is that it does not extend to local authority sites run in accordance with a resolution rather than a licence. Most of these are in Scotland, where the 1990 Act did not require councils to shed their involvement in waste disposal. The Act does not provide for charges to be set for facilities operated under resolution.

The charging document notes that "authorities in Scotland are not precluded from creating a system of internal charging between their waste regulation and waste disposal activities", and where they are "able to do so" urges them to give "serious consideration" to doing so. Such a move, it says, would "go some way towards ensuring that public and private sector sites operate on a consistent basis." Private sector operators are unlikely to be convinced.

WRAs' charging schemes should be transparent, in that they have been required to report annually to the Secretary of State on their income from fees and charges and their costs in considering licence applications and policing licensed sites.

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