Councils to take legal action over withdrawal by DEFRA of waste PFI credits

May 22, 2013

Two local authorities are to bring a judicial review challenge over the Government’s decision to withdraw £65m in waste infrastructure credits for a long-term waste management contract.

North Yorkshire County Council and City of York Council submitted an application to the High Court on Monday (20 May) for leave to apply for a judicial review of the decision by the Department for the Environment, Food and Rural Affairs (DEFRA).

North Yorkshire had approved plans for the £1.4bn Allerton Waste Recovery Park in October 2012.

The councils argue that the Secretary of State, Owen Paterson:

Did not make the decision to withdraw the scheme’s credits in a proper manner;
Failed to follow DEFRA's own published criteria;
Failed to take account of the waste management obligations in the Waste Framework Directive;
Failed to consult with the councils on his decision; and
Failed to give proper reasons for his decision.

Richard Flinton, chief executive of North Yorkshire County Council, said: "At no point, during a lengthy five-year procurement process, had the Government indicated that PFI funding would not be available.

"We were extremely disappointed when Lord de Mauley, the Parliamentary Undersecretary, said that the Government would not change its decision to withdraw PFI credits for our waste management scheme. We had set out very clearly the impact that the withdrawal of waste infrastructure credits (previously Private Finance Initiative credits) would have on our project.”

Flinton added that the waste PFI was projected to save up to £320m on waste management bills by significantly reducing the amount of waste going to landfill and reducing the amount of landfill tax the councils had to pay.

He said: “At a time when public services are under extreme financial pressure, this saving will be an important contribution to avoiding cuts in other areas. AmeyCespa's proposal also gives us a green solution for dealing with our household waste by recovering value from waste.”

North Yorkshire’s chief executive said the councils would continue to work with their contractor, AmeyCespa, to finalise the details of the project.

A Defra spokeswoman said: “We are investing £3.6 billion in 29 waste infrastructure projects. This will reduce the amount of waste sent to landfill, promote recycling and stimulate economic growth. We now expect to have sufficient infrastructure in England to enable the UK to meet the EU target of reducing waste sent to landfill. Consequently the decision has been taken not to fund North Yorkshire and the other two remaining projects.

“This does not necessarily mean the three projects will stop, that will be a decision for the local authorities concerned. We will continue to provide commercial and technical advice to those projects that continue with their procurement process”.