MRWA dips into reserves to cut disposal levy
This comes despite the agency previously recommending a 7% increase in the levy after being hit by increased costs due to rising tonnage, “technical problems” at the Redcar (EfW) incinerator, which transports its waste by rail, and industrial disputes .
The MRWA manages waste and recycling on behalf of five Merseyside Local Authorities and through a separate partnership for Halton Council.
Around £3.4 million will be taken from the Authority’s reserves.
In setting the 2022/23 budget, the Authority was able to draw on Covid-19 related grants available to local authorities to increase the levy by just 1.74% to a total of £79m (see letsrecycle.com Story).
For 2023/24, an increase of almost 7% was expected as a result of the expenditure for “considerable additional waste costs” in the current year and a catch-up because the levy was “artificially” withheld in the previous year – the necessary minimum.
In the fall, however, former chief executive Carl Beer met with district councils to agree on an approach that would ease that burden.
“Finally, after a number of discussions, the proposed level of levy change was such that after a significant contribution from MRWA balances, the overall levy would be reduced by 0.12% on a one-off basis,” the MRWA said.
The agency has warned the levy could be 7% next year as there is no guarantee the general fund will be available again.
After the general fund has been used to offset levy increases, £5.8million is left. The agency said this “is considered prudent but will be necessary given the potential challenges the agency will face over the next two years”.
The MRWA added that similar arrangements have been in place for many years and for 2023/24 “the proposal is no different”.
A report to be examined by the MRWA tomorrow, February 3, says the agency has been hit by a number of problems that have resulted in cost increases.
First, the rubbish transported by rail to the Suez Redcar site was hit by the industrial disputes that took place on the network.
This meant that during each round of industrial action, waste had to be transported by road, often at considerable expense.
“The logistics and cost of these alternative arrangements have meant a difficult time for and for the contractor
MRWA staff on the contracting team who have continued to work with them to ensure waste continues to be transported to disposal sites,” the report explained.
The Redcar facility was also plagued by a number of technical issues, which led to long periods of planned and unplanned maintenance, according to the report.
In addition to the cost of alternative arrangements, the report said the council lost potential joint revenue from electricity generated at the site.
The MRWA also pointed to the “challenging” climate for local authorities in response to central government cuts.
The MRWA, which serves more than 1.5 million people in the Liverpool city area, had a 34.8% recycling rate in FY21/22, the latest data available.
The Waste Management Authority has contracts with several companies for the collection and treatment of waste. In 2009 the MRWA awarded Veolia a 20-year waste management and recycling contract valued at £640m (cf letsrecycle.com Story).
In 2014 the MRWA awarded a £1.8 billion 30-year residual waste treatment contract to a consortium led by Suez UK called MERL (see letsrecycle.com Story). Under the contract, residual waste will be transported by rail from Knowsley to a Suez Energy from Waste plant in Redcar, where it will be used to generate electricity and steam.