Agenda item

DECLARATION OF INTEREST

            The Convener declared an interest in the subject matter of the following article by virtue of his membership on the NEM SITA Management Board.  The Convener did not feel it was necessary to withdraw from the meeting during consideration of this item.

With reference to article 14 of the minute of its meeting of 17 September, 2009, the Committee had before it a report by the Director of Enterprise, Planning and Infrastructure which detailed the outcome of a selection exercise authorised at the aforementioned meeting of this Committee for the direction of landfill tax credit arising in the period from April, 2010 to March, 2013 from the disposal of Council waste in accordance with the requirements of the Landfill Communities Fund and the Waste Management Services contract.

The report provided three options in relation to the remaining 50% of the landfill tax credits arising from the landfill disposal of Aberdeen City Council waste, namely:-

Option A:     Approve direction of 50% of the available Landfill Tax Credits to Aberdeen Greenspace; make the appropriate Third Party Contribution for 2010/11; delegate authority to the Director of Enterprise, Planning and Infrastructure to review expenditure reports; and, if in line with the submitted Expenditure Plan, direct funding for 2011/12 and 2012/13;

Option B:     Approve direction of 50% of the available Landfill Tax Credits to Aberdeen Greenspace; make the appropriate Third Party Contribution for 2010/11 only; and instruct officers to meet with Aberdeen Greenspace to discuss options for further draw down of the unspent Landfill Tax Credits, with the result of these discussions being reported to committee with recommendations for funding for 2011/12 and 2012/13 subject to Committee approval; or

Option C:     Reject the application from Aberdeen Greenspace for funding in 2010/11 and instruct officers to seek funding opportunities for projects in Aberdeen with other environmental bodies for 50% of the available Landfill Tax Credits, and present a further report with revised recommendations to a future meeting of this Committee.

The report advised of two main areas of risk as follows.  Firstly, the Council would need to ensure that funds awarded to successful applicants were spent in the appropriate manner.  The Landfill Communities Fund was regulated on behalf of the UK Government by ENTRUST who undertake compliance auditing on an annual basis.  Both Aberdeen Forward and Aberdeen Greenspace were Environmental Bodies registered and approved by ENTRUST with the long track record of satisfactory compliance.  It was considered that the presence of the ENTRUST process mitigated compliance risk satisfactorily.  Secondly, funds awarded required to be spent within a reasonable time scale on projects for the benefit of Aberdeen communities.  ENTRUST guidance stated that Landfill Community Funds monies should be committed to a specific project within two years of receipt, and the Council expected this guidance to be followed.  The application process required expenditure plans to be submitted and these would be assessed accordingly, and agreement to support an application would require the recipients to provide annual expenditure reports with subsequent funding contingent on the Council being satisfied that previous funds were being allocated timeously and appropriately.

By way of background the report advised that the tax on landfill waste had been introduced by the UK Government in 1996 as a means to reduce the amount of landfill waste and to promote a shift to more environmentally sustainable methods of waste management.  The Landfill Communities Fund, administered by HM Treasury, enabled operators of landfill sites to contribute tax credits to enrolled environmental bodies to carry out projects that met environmental objectives contained in the Landfill Tax Regulations.  The Government saw the Landfill Communities Fund as a way for landfill operators and environmental bodies to work in partnership, to create significant environmental benefits and jobs, to promote sustainable waste management, and to undertake projects which would improve the lives of communities living near landfill sites.  Full details of the funding categories were provided in appendix 1 to the report.

Landfill operators could contribute up to 6% of their landfill tax liability to environmental bodies, and reclaim 90% of this contribution as a tax credit.  They may bear the remaining 10% themselves, or an independent third party could make up this 10% difference to the landfill operators.  Under the Waste Management Service contract between the Council and SITA UK Limited, which commenced in September, 2000, there was a provision for the Council to require SITA, as its landfill operator, to direct landfill tax credits arising from the landfill disposal of waste collected by the Council or a sum equivalent to that value to environmental bodies of the Council’s choice.  In return for this direction, the Council would commit to pay the 10% third party contribution.  Since the introduction of the Waste Management Services contract, the Council had provided 10% funding to SITA, who in turn had made equal tax credit payments to Aberdeen Forward Limited and Aberdeen Greenspace Limited.  Most recently this had been authorised for the current financial year by the former Resources Management Committee of
10 March, 2009 (article 32 of the minute refers) wherein the Committee had also directed officers to prepare a report on the future funding mechanisms.  The report before members today fulfilled that instruction.

The report outlined the criteria for assessment of applicants, and advised on both advantages and disadvantages to the three options put forward in relation to the funding of Aberdeen Greenspace Limited.

The report recommended:-

that the Committee –

(a)       authorise officers to direct the Waste Management Services contractor to award 50% of the Landfill Tax Credits arising from the landfill disposal of Council waste to Aberdeen Forward Limited for the period 1 April, 2010 to 31 March, 2011;

(b)       instruct officers to make the appropriate Third Party Contribution in favour of Aberdeen Forward Limited for the financial year 2010/11;

(c)        delegate authority to the Director to review expenditure reports and, if appropriate, direct 50% of the Landfill Tax Credits arising to Aberdeen Forward Limited for 2011/12 and 2012/13 and make the appropriate 10% Third Party Contribution;  and

(d)       selects either Option A, B or C as detailed within the report in relation to the remaining 50% of the Landfill Tax Credits arising from the landfill disposal of Council waste.

The Convener, seconded by Councillor John West moved:-

            that the Committee approve recommendations (a), (b), (c) and Option C in relation to recommendation (d) (to reject the application from Aberdeen Greenspace Limited for funding in 2010/11 and instruct officers to seek funding opportunities for projects in Aberdeen with other environmental bodies for 50% of the available Landfill Tax Credits and present a further report with revised recommendations to a future meeting of this Committee); and request that this report also contain details of the implications for Aberdeen Greenspace Limited.

Councillor Crockett, seconded by Councillor Laing moved as an amendment:-

            that the Committee approve recommendations (a), (b), (c) and Option B in relation to recommendation (d) (to approve the direction of 50% of the available Landfill Tax Credits to Aberdeen Greenspace Limited; make the appropriate Third Party Contribution for 2010/11 only; and instruct officers to meet with Aberdeen Greenspace to discuss options for further draw down of the unspent Landfill Tax Credits, with the result of these discussions being reported to committee with recommendations for funding for 2011/12 and 2012/13 subject to committee approval).

On a division, there voted:-  for the motion (11) – the Convener;  and Councillors Cassie, Cormack, Corall, Dunbar, Farquharson, Kiddie, Leslie, McCaig, John West and Wendy Stuart;  for the amendment (3) – Councillors Allan, Crockett and Laing;  absent from the division (1) – Councillor Robertson.

The Committee resolved:-

to adopt the successful motion.