Fifth Report - Government’s programme of waste reforms

Businesses and local authorities still do not have the clarity they need from the Department to prepare for the changes that will be required, which risks increasing costs and delaying implementation. The collection and packaging reforms are reliant on businesses and consumers changing their behaviour by producing less, and recycling more. The lack of clarity on the requirements of the simpler recycling scheme, uncertainty around fees obligated companies will pay under the extended producer responsibility scheme and the impact of the payments to local authorities on their funding leaves businesses and local authorities unable to prepare. For example, this could result in all local authorities procuring new lorries and bins at around the same time, placing pressure on supply chains. It has been over two years since the Department closed its consultation on simpler recycling, and it has not yet finalised or published its requirements. The Department expects simpler recycling to increase recycling rates from 42% to 52–60% by 2035 which, without significant contributions from other projects, would leave it well short of its 2035 target to recycle 65% of municipal waste. Municipal waste is household waste and similar waste from other sources, for example from businesses. Continued uncertainty is actively hampering councils from investing and improving their services, delaying procurement, and undermining local authorities’ efforts to increase recycling rates. 6 Government’s programme of waste reforms Recommendation 2 a) The Department should, as part of its Treasury minute response, set a firm date for when it will set out the fees obligated companies (namely, those that produce packaging or sell packaged goods) will pay under the extended producer responsibility for packaging scheme, when it will clarify the impact of these payments for local authority funding, and when it will publish the government response to its consultation on simpler recycling. This consultation r

The Department is basing the design of the deposit return scheme on small trials and international experience, but a lack of like-for-like comparators may make it difficult to get the UK’s scheme right. The National Audit Office recommended the Department considers piloting the scheme due to uncertainties around the scale of the benefits to ensure it is value for money. The impact assessment for the deposit return scheme showed that more than 90% of the benefits of the scheme are based on an estimate of the value to society of reducing litter, and this is inherently difficult to determine. The Department does not plan to conduct a pilot of the deposit return scheme due to the practical challenges of setting it up. It plans to use the information it has on small trials combined with looking at the experiences of other countries who have implemented similar schemes. However, the Department accepts the international comparators are not directly comparable to the UK, for example some countries do not have kerbside collections which recycle some of the same waste. Recommendation 3: Alongside its Treasury Minute response, the Department should write to the committee with an update on how it is drawing on international experience to inform the design and roll-out of the deposit return scheme. This should include commentary on what lessons there are from countries that have introduced deposit return schemes on top of kerbside collections.

While the Department recognises the importance of waste prevention and reuse, it is not clear what its plans are for meeting its target of doubling resource efficiency by 2050. The government considers that most of the damage to the environment from waste could be avoided at the design and production stages by considering the materials used in production and the ease with which products can be reused or repaired. It has an ambition to double resource efficiency by 2050. Stakeholder’s concern is that government has not given waste prevention and re-use sufficient priority. The Department has selected seven sectors to improve reuse and recycling, including textiles, waste electric equipment and batteries. It has set out a vision and approach, but what is lacking is a clear plan to understand when decisions need to be made by to ensure it is feasible to achieve the ambition of doubling resource efficiency by 2050. Government’s programme of waste reforms 7 Recommendation 4: Within the next 12 months the Department should write to the Committee to explain: • What measures it expects to introduce next (within the next five years) to encourage waste prevention and reuse; and what contribution it expects these measures to make to meeting its target of doubling resource efficiency by 2050. • Which measures it expects could make the biggest contribution overall to its target of doubling resource efficiency by 2050, and how long it expects it will need to prepare for and implement these changes.

The Department has not yet set out the waste infrastructure capacity it expects will be needed in England to meet its ambitions, which makes it more difficult for the private sector to make informed investment decisions. It is clear that stakeholders responsible for investing in the necessary new recycling infrastructure need more certainty, clarity and granularity about the Department’s long-term policies on resource and waste management. Without this there is a risk of insufficient facilities to deal with the increased volumes of recycling arising from the reforms, and the packaging will be disposed of by incineration or sending to landfill, or exported for other countries to deal with. The Department plans to publish an infrastructure plan imminently, to set out a vision of where waste will be coming from, providing more confidence to invest in waste infrastructure. Recommendation 5: a) We expect the Department to have published its planned waste infrastructure plan before its Treasury minute response, but if this does not happen it should explain why not, and update the Committee on when it expects this will be published. b) The Department should consult with key stakeholders after publication about whether this gives them sufficient clarity to make informed investment decisions, and write to the Committee to explain how it will address any outstanding gaps this highlights.

The government does not yet have good enough data to manage the waste system effectively, which it needs to understand how waste is recycled and to ensure waste exports are legal. To track progress and refine its plans the Department needs good information on outcomes such as waste production, landfilling and recycling. There are serious gaps and limitations in the Department’s data, for example commercial and industrial waste represents around one-fifth of total waste generated but the Department does not publish data on how much of it is recycled as it does not yet have a robust methodology for determining this. It is confident the waste-tracking project, expected to be completed by April 2025 at a cost of £9.5 million, will provide significantly more data to understand how waste is recycled and to ensure waste exports are legal and meets its waste export requirements. The Department says that it has an evaluation programme in place to develop new measures and the data behind them, and is carrying out research to fill gaps in its data. 8 Government’s programme of waste reforms Recommendation 6: The Department should set out it in its Treasury Minute what it sees as the priority data gaps and set ambitious timescales for filling the data gaps. Government’s programme of waste reforms 9 1 Collection and packaging reforms

On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Environment Food and Rural Affairs (the Department) about government’s programme of waste reforms.1

The Department told us that factors outside of its control have contributed to the delays, for example, COVID-19 limiting its engagement with stakeholders and local authorities and political change impacting its ability to obtain cross-Government agreement.10 However, the Department also accepts the programme was impacted by poor initial set up including: running the programme as three separate projects and poor programme management capability and capacity.11 The Department recognises that it could have had better engagement with stakeholders.12 These weaknesses in the set- up to the programme are reflected in the Infrastructure and Projects Authority’s June and September 2022 reports.13 The Department told us it has since looked to implement comprehensively all the IPA’s recommendations. It told us it has since worked to: • run the reforms as an integrated programme. • improve its programme management office set up, resourcing and governance, bringing in a programme delivery specialist senior responsible owner and project management specialists. • improve stakeholder engagement by really hearing and responding to the concerns of stakeholders.14 5 Infrastructure and Projects Authority, Mandate, January 2021 6 C&AG’s Report, paras 17 and 2.8 7 C&AG’s Report, paras 15, 1.7, 2.6 and figure 7 8 Department for Environment, Food & Rural Affairs, Update on packaging reforms to help drive down inflation – GOV.UK (www.gov.uk), July 2023 9 Qq 11, 13; C&AG’s Report, paras 15 and 2.6 10 Qq 9, 22 11 Qq 22, 24, 27, 28 12 Q 24 13 Qq 22, 24; C&AG’s Report, para 2.8, 2.14 14 Qq 22, 24, 27 Government’s programme of waste reforms 11

The Department told us that its recent work on the reforms has amounted to a wider reset of the programme’s approach, and the programme is now fully resourced.15 It believes it has now addressed the weaknesses in its approach to the programme, and that the IPA’s review due this autumn should be more positive.16

The Department recognised the need to improve project capability across the whole organisation, and it has established a new director general role for project delivery. It told us it is looking at its capability, capacity and resource models across its portfolio of major projects and programmes. It told us that it has brought in over 100 programme management specialists in the past 12 months and a delivery partner to bring in specialists at short notice.17 Providing clarity to stakeholders

The collection and packaging reforms programme is reliant on businesses and consumers changing their behaviour by producing less, and recycling more.18 The National Audit Office found the Department has much more to do to improve businesses’ confidence in the programme, and that a lack of clarity has made it hard for businesses and local authorities to prepare for the changes they will need to make.19 The Department told us its engagement with local authorities and businesses has involved: obtaining their views on the design of the programme; continued communication with them on how the programme is developing; and working with them to co-design the implementation of the programme.20

It has been over two years since the Department closed its consultation on consistent collections (now known as simpler recycling), and it has not yet finalised or published its requirements. Simpler recycling is crucial for England meeting its municipal target recycling rate of 65% by 2035.21 The Department expects simpler recycling to increase recycling rates from 42% to 52–60% by 2035 which, without significant contributions from other projects, would leave it well short of its 2035 target to recycle 65% of municipal waste.22 Municipal waste is household waste and similar waste from other sources, for example from businesses. We received written evidence from Green Alliance, which told us the 2035 recycling target is increasingly likely to be missed due to the delay to the introduction of the programme.23 The Department’s intention is to publish its requirements for simpler recycling as soon as possible.24

The Department suggests the delay in implementation of extended producer responsibility scheme is in part to allow councils more time to prepare and adjust services. However, we remain concerned that councils cannot use the additional time to prepare until they receive a timeline for implementation and confirmation of funding.25 For 15 Qq 9 & 22 16 Qq 27, 29 17 Q 23 18 C&AG’s Report, para 2.20 19 C&AG’s Report, paras 20, 22 and figure 8 20 Q 9 21 C&AG’s Report, paras 1.3 and 2.6 22 Correspondence from Department for Environment Food & Rural Affairs, 21 September 2023; C&AG’s Report, para 1.3 23 GRWR0032 24 Q 13 25 Qq 10, 11 12 Government’s programme of waste reforms example, if this lack of clarity on the funding implications is only resolved near the start date for the new EPR scheme, this could mean that many local authorities start the process of procuring new lorries and bins around the same time. This could put pressure on supply chains and mean it takes longer than Defra expects for all local authorities to collect waste as required. In written evidence, the Districts Councils’ Network and Local Government Association highlighted how continued uncertainty around the requirements of the programme is actively hampering councils from investing and improving their services, delaying procurement, and undermining local authorities’ efforts to increase recycling rates.26

One of the Department’s objectives for implementing the extended producer responsibility scheme is to incentivise producers and retailers to use fewer, and more easily recyclable, materials in their packaging.27 We received written evidence from Marks and Spencer, a business required to pay fees under the extended responsibility scheme, which stressed the Department needs to provide clarity on the fees it will pay to drive behaviour change to reduce the use of packaging and where packaging is used, it is recycled.28 Deposit return scheme

The deposit return scheme for single-use plastic and metal drinks containers will be funded by the companies producing the containers. The Department estimated the deposit return scheme to have at an average annual cost of £621 million (2020 present values, 2019 prices), reduced to £330 million (2020 present values, 2019 prices) after accounting for estimated unredeemed deposits.29

The National Audit Office recommended that the Department considers piloting the scheme due to uncertainties around the scale of the benefits to ensure it is value for money. The impact assessment for the deposit return scheme showed that more than 90% of the benefits of the scheme are based on an estimate of the value to society of reducing litter, and this is inherently difficult to determine. The Department was planning to use Scotland’s deposit return scheme as an opportunity to learn lessons, but the launch of this has now been delayed until at least October 2025, which is when the Department plans to launch its scheme.30

We asked if the Department plans to conduct a pilot of the deposit return scheme. It does not plan to conduct a pilot due to the practical challenges of setting it up. The Department told us it believes it has sufficient information from small trials and looking at the experiences of other countries who have implemented similar schemes.31 It told us that there are around 50 established and operational deposit return schemes internationally, and a number that are in development.32 The Department plans to learn from each of the examples and apply this to development of its deposit return scheme.33 However, it accepts 26 GRWR0035; GRWR0020 27 C&AG’s Report, Figure 8 28 GRWR0041 29 C&AG’s Report, para 2.4 30 Q 32; C&AG’s Report para 21 31 Qq 32–33 32 Qq 33–34 33 Q 32 Government’s programme of waste reforms 13 the international comparators are not directly comparable to the UK, for example because some countries do not have an established and mature kerbside collection which recycles the same containers as its deposit return scheme.34 34 Q34 14 Government’s programme of waste reforms 2 Government’s wider work on resources and waste Waste prevention

The government considers that most of the damage to the environment from waste could be avoided at the design and production stages by considering the materials used in production and the ease with which products can be reused or repaired. It has an ambition to double resource efficiency (the use that is drawn from raw materials before they are discarded) by 2050. The Department considered setting a long-term statutory target for resource efficiency in 2022. It decided not to because it did not yet have a reliable way of measuring such a target. The Department also recognised it had more to do to build its understanding of the impacts and risks of potential policy interventions to ensure that a target in this area would be achievable.35

Stakeholders, including Green Alliance which provided us with written evidence, are concerned that government has not given waste prevention and re-use sufficient priority.36 The Department told us that it aims to push waste up the ‘waste hierarchy’ over time. The waste hierarchy ranks waste management options according to what is best for the environment. Its priority is preventing waste in the first place, when waste is created it gives priority to preparing it for re-use, then recycling, then recovery for example incineration with energy recovery, and last of all disposal for example through landfill.37

The Department published a waste prevention programme for England in July 2023.38 It selected seven sectors to improve reuse and recycling, including textiles, waste electric equipment and batteries. The Department told us it plans to put out a consultation shortly on waste electricals and batteries to consult on improvements to the current schemes. For the seven sectors, the Department told us it has set out a vision and approach, but does not have long-term detailed timeline on when change will be implemented.39 The Environmental Services Association, a trade body representing up to 85% of the resource and waste management industry told us in written evidence that the government must implement far more concrete measures on waste prevention if we are to eliminate avoidable waste of all kinds by 2050.40 Waste infrastructure capacity

The North London Waste Authority, Mura Technology Limited and Suez, which invests in or builds the necessary new recycling infrastructure, provided us with written evidence explaining that they need more certainty, clarity and granularity about the Department’s long-term policies on resource and waste management if they are to meet deadlines, targets and make investment decisions.41 Without this there is a risk of 35 C&AG’s Report, para 13, 1.9, 1.20–1.21 36 GRWR0032; C&AG’s Report, para 13 37 Q 57; Department for Environment Food & Rural Affairs, Guidance on applying the Waste Hierarchy, June 2011 38 Department for Environment Food & Rural Affairs, The waste prevention programme for England: Maximising Resources, Minimising Waste, July 2023 39 Qq 39–41 40 GRWR0007 41 GRWR0006; GRWR0012; GRWR0015; C&AG’s Report, para 20 Government’s programme of waste reforms 15 insufficient recycling facilities to deal with the increased volumes of recycling arising from the reforms. If new infrastructure is not developed there is a risk that the packaging will be disposed of by incineration or landfill, or exported for other countries to deal with.42 This also increases the risk of illegal export of waste overseas, which we examined as part of our session on Government actions to combat waste crime.43

The Department claims it has a comprehensive vision and plan, but accepts more detail is needed for businesses and waste management authorities.44 The Department acknowledged that businesses and local government need more information on how extended producer responsibility and simpler recycling will work, as well as on its infrastructure pathway, which will set out the amount and type of waste facilities likely to be needed in England to 2035, if they are to build relevant infrastructure that is needed.45 The Department plans to publish its infrastructure pathway imminently. The Department told us that based on its modelling, it expects that existing energy-from-waste plants will continue to be needed in the long term as part of managing the shift away from sending waste to landfill.46 Data on waste

To track progress and refine its plans the Department needs good information on outcomes such as waste production, landfilling and recycling. There are serious gaps and limitations in the Department’s data, for example commercial and industrial waste represents around one-fifth of total waste generated but the Department does not publish data on how much of it is recycled as it does not yet have a robust methodology for determining this.47 In Defra’s November 2022 resources and waste strategy progress monitoring report, nine out of 23 indicators were almost three years out of date at publication, with no data for a further three indicators which are under development.48

The Department believes its waste tracking project will provide significantly more data to understand how waste is recycled and to ensure waste exports are legal and meets its waste export requirements. At present, data on waste transfers are recorded by waste operators in disparate systems and in diverse and unconnected ways, sometimes on paper and without sharing beyond the two parties to a specific waste transaction. Large amounts of data are either not collected or not collated centrally anywhere.49 The Department told us the waste tracking project will track waste from start to finish digitally, making it harder for waste crime to occur.50

In October 2022, our report on government actions to combat waste crime found the Department was making slow progress on its digital waste tracking system, and was not even at the pilot stage after four years of effort, despite its implementation being core 42 C&AG’s Report, Figure 8 43 Committee of Public Accounts, Government actions to combat waste crime, Eighteenth Report of Session 2022–23, HC 33, 19 October 2022 44 Qq 9, 12 45 Q11; C&AG’s Report 1.24 46 Q 61 47 C&AG’s Report, para 11, 1.25 48 C&AG’s Report, para 1.25 49 C&AG’s Report para 1.26 50 Q69 16 Government’s programme of waste reforms to combatting waste crime.51 The Department told us it is confident the project will be completed by April 2025 within the budget of £9.5 million. It said it would launch the beta version to the public in 2024.52

The Department told us that it produces information monitoring progress on the resources and waste strategy annually53 It told us that it has an evaluation programme in place to develop new measures and the supporting data as well as research to fill in gaps in its data.54 51 Committee of Public Accounts, Government actions to combat waste crime, Eighteenth Report of Session 2022–23, HC 33, 19 October 2022 52 Qq 67–68 53 Q 71; Correspondence from Department for Environment Food & Rural Affairs, 21 September 2023 54 Q 71 Government’s programme of waste reforms 17