NLWA Chair's letter to north London constituent MPs in response to Autumn Budget

NLWA Chair Councillor Clyde Loakes wrote to north London constituent MPs (including Prime Minister and MP for Holborn & St Pancras Sir Keir Starmer) following announcement of the Autumn Budget.

Following the recent Autumn Budget, I am writing to you as Chair of the North London Waste Authority (NLWA) to highlight the impact of the announcement upon waste disposal authorities.

Autumn Budget announcement on Extended Producer Responsibility  

While you will be aware of the headline announcements relating to taxation and NHS funding, the Budget also revealed that local authorities are set to receive £1.1 billion of funding to cover costs associated with the collection and disposal of packaging waste as part of the Extended Producer Responsibility (EPR) scheme. After many years of NLWA and other local authorities calling for the implementation of the scheme, we welcome this announcement.  

It is especially reassuring that this funding – which will be raised through fees paid by packaging producers - has been guaranteed by government in the face of any shortfall. Indeed, the commencement of the long-awaited scheme means producers will bear the financial burden of the waste they produce, incentivising the use of recyclable materials in packaging manufacture and a reduction in packaging materials altogether.  

It is worth noting that funding allocations to individual authorities are due to be made later this month, and we are looking forward to working with government to ensure our portion covers the actual and full cost of collecting and disposing of packaging waste across north London.

Next steps: Ensuring financial sustainability for local authorities  

It is encouraging that government is clearly heeding calls from local authorities, however, the Budget announcement will not materially alleviate the continued and substantial budgetary strain that they face. Coupled with a real-terms cut in funding for DEFRA of 1.9%, the financial burden of waste disposal is likely to persist.  

Following the announcement on EPR, action must now extend to other policy measures to address this. Following 14 years of austerity measures, this should be a priority to ensure limited resources can be better spent on delivering essential frontline services and ensuring that waste reforms can be successfully implemented.

We hope you will work with us to call on government to:

• Support local authorities to deliver on Simpler Recycling  

From 2026, food waste recycling services will be compulsory for all local authorities as part of Simpler Recycling. This is a welcome step, but although new burdens funding has been allocated to cover the capital costs incurred by collection authorities, disposal authorities like NLWA have not been allocated any new funding.

We estimate that the new legislation will require around £25m of capital costs for NLWA alone, which will have to be passed on to our boroughs. It is imperative that both collection and disposal authorities receive sufficient funding from government to cover the cost of implementing these reforms.

• Make the emissions trading scheme fair and effective  

The Emissions Trading Scheme (ETS) seeks to penalise and dissuade polluters by making them pay for their carbon emission. From 2028 it will include Energy from Waste (EfW) facilities. However, expanding ETS to include EfW will not achieve the desired outcome of decarbonising the waste sector, as product designers and producers who are most responsible for the fossil content of waste are not targeted. Instead, the Scheme will act as an “end-of-pipe" tax on local authorities who have very little control over the content of the waste they must collect and dispose of, rather than tackling fossil carbon embodied in products during manufacture.    

Our estimates suggest that the ETS- as currently framed- could add up to £35m to the annual cost of waste disposal for residents in north London, equivalent to an extra £40 per household in council tax. This places unsustainable strain upon stretched borough budgets and could lead councils to consider tax increases or further cuts to essential services. The market system which is key to the ETS also means costs are volatile and unpredictable, adding risk to local authority finances and making it difficult to plan services. For this reason, we believe expanding the ETS to include EfW facilities must either exclude local authority waste, or alternatively, local authorities must be provided with funding to cover our costs without causing cuts elsewhere.  

• Exempt publicly owned companies from the Electricity Generator Levy  

The Electricity Generator Levy (EGL) has had significant financial consequences for our boroughs. We strongly support action to tackle windfall gains which benefit private shareholders at the expense of hard pressed consumers. However, LondonEnergy Limited (LEL) - a company wholly owned by NLWA which provides essential services including running reuse and recycling centres and the Energy from Waste Facility at the Edmonton EcoPark - is caught by the EGL. The only result of that is to prevent gains benefitting councils and council tax payers and is set to mean a loss to our boroughs of over £20 million, money that could make a difference to frontline services. We believe that a specific and limited exemption should be given for companies owned by public sector organisations, and for levy payments already paid to be reimbursed for the benefit of local residents.  

Working together

We will continue to press Defra and Desnz on these issues and, following upcoming decisions, will let you know urgently whether these are a cause concern for local authority finances or deliverability. More broadly, the NLWA is committed to sharing our knowledge and experience with you and your colleagues to address the issues outlined in this letter and to inform decision making.  

To this end, we are looking forward to creating a working relationship with you and I would appreciate the opportunity to meet – either in Westminster or at the Edmonton EcoPark - to discuss how this can work in practice.