Ahead of the 2025 Autumn budget, NLWA chair, Cllr Clyde Loakes MBE, has written to the Chancellor of the Exchequer, the Rt Hon Rachel Reeves MP.
Dear Chancellor,
I am writing as Chair of the North London Waste Authority (NLWA) ahead of the 2025 Autumn Budget. Like you, we strive to accelerate growth and address the climate crisis by providing the most financially efficient and environmentally sustainable waste disposal services for tax payers.
The Autumn Budget is an opportunity to progress these aims, especially at a time when local authorities across the capital are estimated to face a £500m funding shortfall this year. Here we outline the actions your department must take to support economic growth and ensure financial sustainability for local authorities.
1. Make the Emissions Trading Scheme fair and effective
The Emissions Trading Scheme (ETS) encourages polluters to decarbonise by making them pay for their emissions. However, expanding ETS to include energy from waste (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 little control over the content of the waste they must collect and dispose of, rather than tackling fossil carbon embodied in products during manufacture.
It is positive that some of the cost burden will now fall to packaging producers, with costs passed through the extended responsibility for packaging scheme (pEPR). However, packaging makes up just one portion of our waste and given that the proposed expansion of ETS could add up to £35m to the annual cost of waste disposal in north London, the scheme could still place unsustainable strain upon already stretched borough budgets, forcing cuts to essential services.
While we have concerns, the ETS could play an important role in decarbonising waste if applied correctly. Vitally, it must only be phased in once a comprehensive strategy for decarbonising waste is implemented. This must place the financial burden on producers of carbon heavy products and also facilitate the development of supporting circular infrastructure. Linking the scheme to pEPR is just the start. Government departments – including HM Treasury – must work together to urgently apply similar policy levers to other problematic materials including textiles and absorbent hygiene products (AHPs). Ultimately, if ETS charges must be passed to local authorities, your department must be prepared to reflect increased costs in new burdens funding or financial settlements.
2. Invest in infrastructure to deliver on waste reforms
Investment in circular infrastructure supports growth through the creation of new jobs and the strengthening of manufacturing industries, but it is also necessary to successfully deliver existing waste reforms.
The implementation of Simpler Recycling – which will require all local authorities to collect flexible plastics for recycling from 2027 onwards - is just one example where this is imperative. Currently, there is no viable market or end destination for recycling this material. The government position appears to be that mandating collections and guaranteeing a supply of material will promote an increase in processing capacity so flexible plastics can be recycled. In practice, this is unlikely due to lack of demand and feasible end uses, and the often low quality of post-consumer flexible plastics. It is imperative that your department works with Defra to set out interventions that support investment and increase UK reprocessing capacity for this material. Without further strategic and financial intervention, there is significant risk that local authorities will spend precious resources on soft plastic collections, only for the materials to be directed to energy from waste (EfW) or landfill.
Working together
We hope you will seriously consider these proposals which would avoid unnecessary burdens on local authorities in north London and across the country. Not only this, but by supporting a more circular and resource efficient economy, studies show that UK GDP could grow by nearly £25 billion by 2025.
We already work with colleagues in Defra and Desnz, but look forward to strengthening our partnerships across government to deliver evidence-based policy that supports the economy and the environment. I’d appreciate the opportunity to meet with you, or your officials, to discuss how we can offer our knowledge and experience. Yours sincerely,
Clyde Loakes MBE
Chair, North London Waste Authority