County to stop waste reserve increases

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Essex County Council’s pot of money – worth more than £100million – to mitigate against future waste costs will not grow any more after it was decided the council has enough to deal with any further financial challenges.

The waste reserve – which grew this year by £6million from £103million to £109million – is said to be needed to mitigate against any increases in landfill tax.

HMRC has lined up a further rise in the standard tax rate from April 1, 2020, when it will jump £3 to £94.15 per tonne.

But the council now says it has enough to mitigate against these environmental costs.

The council has historically been reluctant to explain publicly why the council has built up such large amounts of reserve.

It is also believed to need reserves to meet obligations of the 25-year life of the PFI contract, signed in 2012, that envisaged a plant built and operated by Urbaser Balfour Beatty in Basildon capable of annually treating up to 420,000 tonnes of residual waste, trade waste, bulky waste, street sweepings and waste from household waste recycling centres, along with a smaller proportion of local trade waste from Essex and Southend.

Since 2007/08 the county council (ECC) has increased the amount of reserves it has held for waste provision by more than £90million – from around £11million.

It has refused to elaborate what any “contingency arrangements” could be, adding it “takes financial management very seriously and reviews the position in respect of its reserves each year taking into account its risks, liabilities and future plans”.

But council leader David Finch, at policy and scrutiny committee on Tuesday, January 28, said: “There is no addition to the waste reserve in this existing budget round.

“That reserve has stopped increasing because it is considered adequate for our future needs.”

He added: “In 2021 there is no increase in that waste reserve because we recognise we don’t need to put any more in.

“The history of that reserve goes back to 2003/04 when the government introduced a cost escalator for landfill.

“Where the prediction was the government tax was going to rise beyond £150/tonne we took the opportunity at the time to set up that reserve so when the cost escalator increased we could compensate that by drawing down on the reserve thereby not increasing council tax to cover that.”

Piers Meyler

Local Democracy Reporter

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