Call for evidence outcome

Government response and summary of responses

Updated 15 March 2023

Executive summary

His Majesty’s Government (HMG) ran a call for evidence from 21 July 2022 to 18 August 2022 to receive feedback on a proposed landfill tax grant scheme.

This document provides a summary of responses to the Department of Environment, Food and Rural Affairs (Defra). Defra will use these, alongside wider evidence and research, to shape policy proposals for helping to bring land affected by contamination back into beneficial use.

Respondents identified numerous sites where a landfill tax grant scheme could make the difference between land contamination being able to be remediated or not, particularly when responsibility falls to a local, combined, or mayoral authority.

Evidence also outlined what the proposed scheme’s guidance, processes and criteria should include to enable effective scrutiny and enforcement. Evidence also highlighted the potential for malpractice, particularly if the scheme was available beyond just to local, combined and mayoral authorities. Considerations regarding the wider waste and contamination landscape, including permits and guidance, were also highlighted.

Defra recognises these wider concerns and will consider them further whilst exploring the potential design of a Landfill Tax Grant scheme which could be spent on providing support to local authorities and development corporations.

Background

The call for evidence sought information on the prevalence of instances where landfill tax is considered an insurmountable barrier to the redevelopment of land affected by contamination or the consequences of previous development in England.

It also sought views on the need for, and design of, a possible landfill tax grant scheme to support local authorities (including Combined Authorities and Mayoral Development Corporations) and HMG Arm’s Length Bodies to overcome this barrier.

What is landfill tax?

Landfill tax (LfT) was introduced on 1 October 1996 to encourage the diversion of waste away from landfill and towards more environmentally friendly waste management options such as recycling, re-use and recovery.

LfT is a weight-based tax due on material disposed at permitted landfill sites in England and Northern Ireland (it has been devolved to Scotland and Wales). Material arising from the reclamation of contaminated land was originally exempt from landfill tax to encourage voluntary clean-up but this exemption was removed by 31 March 2012 to encourage the adoption of more sustainable remediation techniques. From 1 April 2018, the scope of landfill tax was broadened to also cover deposits at illegal waste sites operating without a permit.

Landfill operators will typically factor in their liability to pay landfill tax when setting the gate fee that they charge their customers for receiving material at their site.

What is land contamination and remediation?

Land is affected by contamination where substances in, on or under the land mean that the land is unsuitable for either its current or future land use. Land contamination can harm human health, soils, the water environment including drinking water supplies and groundwater, ecosystems and property.

Remediation refers to dealing with the land contamination to make the environment clean and safe, returning the land back into beneficial use. Through regeneration the land can enhance the health and wellbeing of all and add to the economic, ecological and amenity value of the area.

There are numerous possible reasons remediation of land is not pursued, but financial considerations are a major factor in almost all cases. This will include LfT costs, incurred from contaminated soil that cannot be treated or re-used on or off site and subsequently sent to landfill.

In these circumstances, LfT can account for a sizeable portion of total remediation costs. However, this proportion can vary widely depending on the nature of the waste, other site-specific factors, and on the area’s land value which varies nationally.

Summary of responses

In total, Defra received 37 responses to the call for evidence. The largest sector was industry, with 24 respondents (65%). This was followed by 7 Public Sector bodies (19%), 2 responses from the general public (6%) and 2 respondents from Non-Governmental Organisations (NGOs) (5%). Two respondents did not provide their organisation (5%).

Respondents from industry were principally consultants, environmental remediation contractors and waste management companies. Responses were also received from developers, planning consultants and landowners. Respondent from public bodies were principally local or combined authorities.

Three specific areas of evidence were requested. A range of views were received from respondents and not every respondent answered every question.

Section 1: definition and prevalence of the landfill tax trap

The call for evidence sets out that a site is considered as falling within the ‘landfill tax trap’ if:

1. The use of landfill is reasonably necessary to dispose of some or all of the contamination or material present at the site to realise opportunities for remediation, economic development, or to secure long term environmental or human health protection of surrounding land or water body, and
2. LfT obligations arising from the disposal of material from remediation to landfill would result in the total costs of site remediation exceeding the land value uplift from bringing land affected by contamination back into beneficial use, so it is suitable for use that serves the needs of the local community, but
3. All other costs of remediation, absent the LfT obligation, would be less than the land value uplift.

Question 1: Do you consider that this definition represents a fair definition of the landfill tax trap?

The question sought agreement or disagreement with the proposed definition of Landfill tax trap. 34 respondents answered, of which 17 (50%) responded ‘Yes’. 17 (50%) respondents who answered this question answered ‘No’.

Across sectors this even split was consistent, with 50% of the industry responses being ‘yes’ and 50% ‘no’. The same was true of responses from members of the general public, NGOs and local authorities.

Respondents were able to provide free text responses to elaborate further.  From those who answered ‘No’ and then provided free text responses on how they’d alter the definition, six key themes were identified:

• the term ‘Land Value Uplift’ was deemed too narrow to describe all social, environmental and economic benefits gained by a project going ahead
• after landfill tax is removed, the value of land after remediation may still be negative though large environmental and social improvements may have been achieved. This may be especially the case for land affected by contamination on former industrial or landfill sites
• the wider contaminated and waste regulatory landscape was considered, highlighting issues relating to enforcement, permits, soil being defined as waste and guidance more broadly
• recommendation was given to alter criteria (1) from landfill being ‘reasonably necessary’ to the ‘only option’
• the scheme would increase landfill and reduce sustainable remediation, particularly expressed when assumed that private industry would have access to it
• the scheme could leave local authorities out of pocket by committing them to remediating land which could end up costing more than expected, and a LfT grant not being enough for the project to be cost-neutral

Different reasons were favoured by the industry and public bodies. 14 Industry respondents provided free text answers, these noted wider concerns of the regulatory waste landscape, administrative burdens, wanting stronger and less subjective wording, alongside guidelines on wording.

Four public bodies provided free text responses and were mainly concerned with scenarios where they could negatively be impacted financially, either directly by low land values making their area ineligible for the scheme, or indirectly where they have committed to remediation where costs may escalate beyond initial budgets.

Question 2: Are you aware of any specific site or sites that you believe meet the definition of the landfill tax trap? If yes, please provide details including a summary of the location, type of contamination, estimated land value or other benefits, if remediation were to take place, and estimated cost of remediation including likely tax obligation if known.

This question sought whether respondents are aware of any sites that meet the definition of the ‘landfill tax trap’. Eleven respondents replied they were aware of sites that meet the above definition of the ‘landfill tax trap’.

Respondents were given a free text space to provide the details requested. Sixteen specific site examples were identified and categorised as:

• former landfill (8 sites, 50% of sites suggested)
• industrial site or waste (4 sites, 25% of sites suggested)
• illegal dumping (2 sites, 12.5% of sites)
• small scale, for example, former petrol station (1 site, 6.3% of sites)
• old commercial building (1 site, 6.3% of sites)

In regard to the 8 former landfill sites, 3 were identified by 2 industry respondents and 5 sites were identified by 3 local authorities. By contrast, former industrial sites were exclusively identified by local authorities.

Local authorities identified the most sites that they felt met the definition, contributing 10 sites (62.5% of the number of sites suggested) that could potentially benefit from a LfT scheme grant. Mostly, it was not clear what the ownership status was for the sites specified.

Question 3: What type of site should qualify as meeting the landfill tax trap Definition?

This question sought the type of site that should qualify as meeting the ‘landfill tax trap’ definition. 32 respondents provided an answer to this question through the available responses:

a) Redevelopment only.

b) Sites where land remediation will have a wider economic, environmental, and socio-economic benefit, including through improvements to public health.

c) Other, please specify.

72% of respondents selected option (b). In comparison, only 6% of those who responded selected option (a).

12.5% of respondents used the free text option to suggest ‘both’ option (a) and option (b).

Option (b) was designed to include ‘redevelopment’ as part of the ‘economic benefit’, as such these additional responses can be considered in favour of option (a).

Option (b) was also supported by respondents from every sector (Industry, public, general public and NGO).

Several public bodies provided example sites to illustrate why they felt option (b) was the most appropriate; highlighting areas not suitable for development, but if the contamination was cleared could provide many social and environmental benefits. These included access to green space, particularly in urban areas, with further positive impacts on health and wellbeing, alongside increasing biodiversity and soil health.

Section 2: Environmental Criteria

The following environmental criteria were presented in the call for evidence:

1). The applicant must demonstrate that use of landfill is reasonably necessary, and steps have been taken to minimise the quantity of waste that will be landfilled. Reasonableness may be evidenced with respect to:

• a) The nature of the waste and / or the location of the site meaning there is a lack of a suitable alternative.
• b) The treatment operation that would be carried out to move up the waste hierarchy and minimise the amount of disposal to landfill.
• c) Restrictions to the future utility of the site post-remediation (for example, due to instability) absent removal and landfilling.
• d) Disproportionate delay and opportunity costs arising from an alternative remediation method, and / or
• e) Current or imminent pollution that may cause harm to the environment.

2). The applicant should evidence that the contamination has been present for a minimum period prior to the commencement of any new grant offer, ensuring contamination is historic and so removing any incentive to add new contamination to the site.

3). No party benefitting from the remediation or planned development should be subject to any past or current legal action in respect of the contamination to be removed.

Question 4: Do you think these criteria are appropriate and sufficient to proportionately protect the waste hierarchy?

This question sought opinion about whether the environmental criteria is appropriate and sufficient to proportionally protect the waste hierarchy. Thirty two respondents answered. The response options provided:

• Yes
• No
• If no, please provide details

41% respondents stated ‘Yes’, and 59% stated ‘No’. Those respondents who utilised option (c) identified the following reasons for their disagreement:

• Suggesting the eligibility should be narrowed, principally that in the first criteria (1) above landfill should be the ‘only solution’, not just ‘reasonably necessary’. Numerous respondents also touched upon the issue of ‘delay’ (clause 1.d above), 3 respondents suggested it should be specified that this delay shouldn’t result from administration or planning processes such as gaining permits, as these processes could be used to justify landfill over treatment or re-use. Delay should only be resulting from physical technical processes.

  • However, some respondents made a case for the inclusion of delay in the criteria to ensure that time-sensitive investment isn’t lost, preventing the realisation of specified end uses for the site and other benefits such as jobs.
• Recommendation was given to consider wider issues in the contamination and waste regulatory landscape beyond Landfill Tax, with particular concern about permitting, enforcement and guidance. Reform of the environmental permitting regulations for waste and Environment Agency enforcement was stressed by some respondents to be a higher priority than resolving the landfill tax trap.
• Concern that misclassification and malpractice would occur. Respondents emphasised the subjective elements in appraisals, and specifically economic evaluation, making them able to be manipulated. Likewise, other respondents were concerned that waste may be misclassified to avoid costs.

Respondents from public bodies principally suggested eligibility should be narrowed alongside citing concerns about misclassification and malpractice and concern about the evidence burden resulting from the criteria. Respondents from private industry were most concerned with suggesting eligibility should be narrowed to prevent misuse of the scheme, followed by recommendations given to considering wider issues in the contamination and waste landscape, and concern over misclassification and malpractice.

The concerns raised about misclassification and malpractice were mostly made with the assumption the scheme would be available to the private sector. For example, a public body emphasised the importance of appropriate enforcement for any potential scheme, ‘otherwise it risks being a loophole that historical polluters and or developers can use to avoid costs that they should rightly bear.’

Such concerns were expressed by members of industry themselves, one industry respondent suggesting ‘it will be very easy to circumvent the above and prove that landfill is the best way forward’, another stated ‘it would be relatively simple to ‘demonstrate’ that landfill was the only option’. Any design of a potential future scheme would likely focus on local, combined and mayoral authorities, seeking advice from waste crime and anti-fraud teams on the concerns raised accordingly.

Question 5: What should count as historic contamination?

The question sought respondent’s opinion as to what should be considered as historic contamination. Thirty two respondents answered using the available options below:

• 1 to 4 years
• 5 to 10 years
• 10 plus years
• other, please specify

56% of the respondents selected option (c), followed by 22% selecting option (b). Free text responses in option (d) included one suggestion of ‘25 years plus’, another that contamination should qualify regardless of age, and finally another suggestion was put forward for whenever there is no identifiable polluter.

Question 6: Who should scrutinise whether a proposed project meets these environmental criteria?

This question sought respondent’s opinion as to who should scrutinise if the project meets environmental criteria. 34 respondents provided a response through the question’s free text option.

Seven themes of answers were deductively identified. The most prevalent was a suggestion for the Environment Agency (EA) and/or DEFRA to provide scrutiny, 32% of those who answered this question put forward this suggestion. An additional 9% of respondents started from the premise they would like the EA to provide scrutiny but were concerned at their capacity.

18% of those who answered this question then suggested an independent qualified individual, such as in Contaminated Land: Application in Real Environment’s Definition of Waste: Code of Practice (CL:AIRE’S DoWCoP). Another respondent’s similar suggestion was of The Specialist in Land Condition (SiLC).

6% of this answer’s respondents put forward local authorities as the appropriate actor to scrutinise, and one respondent suggested self-certification.

Another 18% of those who answered this question put forward a multiple layer system, usually consisting of some or all of the actors already mentioned, for example; ‘qualified person as in CL:AIRE DoW CoP. Backed up by an EA audit’ or EA ‘with LA contaminated land officers’. One respondent suggested a panel of stakeholders and regulators.

Beyond specific named actors, multiple respondents outlined the principles which should characterise who scrutinises the scheme; many responses impressing the importance of the scrutiny being independent, transparent, publicly available, and consistent between localities.

Question 7: What evidence do you consider that you / an applicant could be reasonably asked to present to demonstrate that a proposed project meets these environmental criteria?

This question sought respondent’s opinion on what evidence applicants should reasonably be asked to present to demonstrate that a proposed project meets environmental criteria. 31 respondents answered this free text question. From the answers provided, three categories of evidence were deductively identified alongside numerous existing schemes which could either be replicated or utilised directly.

The first category of evidence which respondents highlighted as necessary was comprehensive environmental assessments followed by specific contamination reports where relevant. Planning documents mentioned by respondents included sustainability assessments, geotechnical reports, and biodiversity impact assessments.

If necessary, further contamination specific planning documents were suggested, including a full contamination risk assessment, a comprehensive ground investigation report and demonstration material is geotechnically unsuitable without improvement.

After land is identified as affected by contamination, some respondents emphasised the need for an evidence trail to demonstrate the land as historically contaminated. Proposed forms of evidence included EA disposal permit records or correspondence, desk study of development history and pollution records, contaminant ageing assessments, and borehole data.

Requiring a remediation options appraisal was identified as chronologically the next evidence stage. Respondents detailed that such a remediation options appraisal should compare all available remediation options (including do nothing), be fully costed, compare against all economic, social, and environmental objectives and technical viability. The issue of whether delay should be included as criteria was again contentious, one respondent suggesting ‘the justification should not merely be based on time for implementation’ while another argued that alternative remediation’s opportunity costs and delay should be assessed by the remediation options appraisal. Different methods to achieve such comparison were put forward including Cost Benefit Analysis and a Multi-Criteria Scoring Matrix. One respondent also suggested that a remediation options appraisal should be completed for each individual contamination material identified, rather than by site.

Many respondents highlighted existing schemes that they felt could be replicated in the grant scheme design, including the use of a qualified person as in the National Quality Mark Scheme for Land Contamination Management (NQMS) and CL:AIRE’s Definition of Waste: Code of Practice. The submitting of supporting information was proposed to mirror the process in a Waste Recovery plan and the EA Mobile treatment permit deployment form. Other schemes were mentioned that any grant scheme should be consistent with; the EA’s Land contamination risk management (LCRM), Environmental Impact Assessment (EIA), UK’s Sustainable Remediation Forum (SuRF-UK), Detailed quantitative risk assessment (DQRA), European contaminated and ground investigation standards’ BS 10175 and BS 5930:2015 +A1:2020.

Some respondents used the free text option to express concerns of how evidence could be subject to malpractice and manipulation; highlighting the potential for ‘borrowing’ evidence from other sites, and concern that financial costs not relating to landfill tax would attempt to be recovered through the scheme. An industry respondent noted the potential for such malpractice by developers: ‘Evidence provided should be sufficiently robust to inhibit fraud and prevent developers from unduly avoiding landfill tax, while also enabling the grant scheme to promote the development of previously contaminated land.’ A public body also highlighted the ‘need to ensure that the scheme doesn’t benefit liable parties who might be required to pay to clean up the contamination’.

The principles of public transparency and independent verification were strongly present in most respondent’s answers to this question.

Section 3: Financial and Socioeconomic criteria

The grant should only be available in cases where LfT would otherwise render the remediation project uneconomical and hence no LfT revenue would have been paid. Any grant should also act to unlock tangible social and economic benefits for local communities from the remediation of a site that could not otherwise have been achieved.

The following criteria was put forward to help protect the scheme’s financial and socio-economic principles:

1. The applicant is a local authority or other public body who either owns the site (whether directly or through a Development Corporation or similar) or else is prepared to buy it from the Crown Estate (where in escheat).
2. The applicant must supply evidence that LfT is acting as a financial barrier to remediation in line with criteria 2 and 3 of the landfill tax trap definition above.
3. The applicant must evidence that a plan is in place to secure timely redevelopment or other clear social or environmental benefit post-remediation, with any necessary planning permissions already in place.
4. The applicant must evidence that they are able to meet all other remediation costs and agrees that the grant will only be paid at the point the LfT has been paid by the landfill operator and the applicant has provided evidence of invoicing.

Question 8: Do you agree that application should be restricted to local authorities?

This question sought respondent’s opinion on whether the LfT scheme should only target local authorities. 32 respondents answered the question using the options given:

• Yes
• No
• If no, please provide details

Of those who responded to this question, 56% voted ‘No’, and 44% voted ‘Yes’.

Responses varied considerably by sector. Private industry, the most represented sector, was the only sector to have more ‘no’ responses than ‘yes’. Public Sector bodies and the general public both provided more responses in agreement, and NGOs were evenly split. Almost all local authorities who responded to this question voted in agreement.

Most responses in disagreement, almost entirely sourced from private industry, emphasised that if land is affected by contamination and would benefit from the scheme, it shouldn’t be excluded based on its ownership. Respondents also argued that limiting the scheme to LAs would make its impact very small and suggested that allowing private developers to access would encourage preferential development of brownfield sites. However, expanding the scheme to the private sector increased emphasis, and potential resource demand, on enforcement; an industry respondent suggested ‘the private sector would help speed this up … but needs to be well policed’. Any design of a potential future scheme would likely focus on local, combined and mayoral authorities, seeking advice from waste crime and anti-fraud teams on the concerns raised accordingly.

Question 9: What evidence do you think an applicant should reasonably be expected to provide that LfT is acting as a financial barrier to remediation?

This question sought respondent’s opinion on what evidence applicants should be expected to provide to evidence that LfT is acting as a financial barrier to remediation. 31 respondents answered this free text question. A remediation options appraisal was the most frequently suggested by respondents, from across both industry and the public sector. Within this, viability statements and cost benefit analysis were suggested as evaluative methods and evidence. However, many respondents expressed concern for the subjective nature of economic appraisals, difficulty in measuring some social and environmental aspects and the potential for manipulation, principally by the private sector.

Industry respondents flagged the potential for the scheme to be abused if used in the private sector; one industry respondent highlighting the ‘issue here is to avoid developers pocketing the landfill tax and adding margin for themselves’, another said ‘developers will always be able to demonstrate that LfT is a financial barrier’. This then links to several respondents emphasising that all evidence should be as transparent and publicly available as possible, though one respondent noted this could potentially ‘cause problems with commercial sensitivity and confidentiality’.

One respondent extensively explored chronological issues, comparing evidence provided at the beginning of the project as opposed to the end. Other respondents highlighted the fluctuation of costs during a project’s life cycle due to the changing property market, supply and demand. Therefore, evidence submitted at the beginning of the project could be heavily assumptive and subjective and as such some respondents suggest a clawback mechanism or to give local authority brownfield sites blanket eligibility. Such a mechanism will be considered during any design of a future scheme.

Question 10: What evidence do you think an applicant should reasonably be expected to provide that a plan is in place to secure redevelopment or other public benefit?

The question sought respondent’s opinion on what evidence should be reasonably expected to provide to evidence a plan is in place to secure redevelopment or other public benefit. 29 respondents answered this free text question.

Planning permission and approval was the most frequently suggested form of evidence, put forward by 62% of those who answered this question. Public bodies suggested planning permission should show value to the community, and wider public benefits. It was also suggested that plans for redevelopment should be put forward, though it was also highlighted the difficulty in this as end users may not commit until remediation has occurred.

Respondents again raised the issue of circularity in requiring councils to commit to these projects at the start without guaranteed support and money needing to be spent without surety that the LfT burden will be removed. However, if support was committed from the start of the process, some respondents again highlighted the importance of a clawback mechanism if costs or benefits changed, or if it was sold to another developer where normally they would have had to pay LfT.

Other potential required evidence suggested by respondents included a cost benefit analysis, proof of land ownership, proof of future development, schedule or works and contractors, and an EIA.

Question 11: What evidence do you think an applicant should reasonably be expected to provide that all other costs of development are affordable to them?

This question sought respondent’s opinion on what evidence an applicant should be expected to be able to provide to evidence that all other costs of a development are affordable to them. Twenty four respondents answered this free text question.

Of those who answered the question, 46% suggested a development funding plan should be used to evidence affordability, perhaps as part of a viability statement. Respondents stated that the plan could detail funding streams, cost benefit analysis, costed redevelopment and new use plan, and sign off by relevant officer.

One public body suggested the plan should include a comparison between greenfield and brownfield sites; ‘It should include build costs for the proposed development which should be compared to the typical build cost for a greenfield site and demonstration that the costs of landfill tax are affecting the development to such a degree as to make the costs and returns abnormal and the investment unpalatable for a developer.’

Other points raised by respondents were regarding malpractice through subjective aspects of economic valuation and their potential to be manipulated if the private sector had access to the scheme. There was also an expressed concern that such information ‘would be difficult to obtain from private developers unless high level cost appraisal is acceptable’.

Also highlighted was the potential for a potential applicant to demonstrate it was unaffordable to them, so they could clear the site through the LfT scheme, only then to sell to a developer who could have afforded LfT to begin with. Another respondent flagged the issue around the potential cost burden and uncertainty if the scheme was to be administered at the end of the project, querying ‘if grant is only paid when the landfill operator pays the LFT (to HMRC), should the risk of landfill operator default (for example bankruptcy, late payment to HMRC, disputes between landfill operator and HMRC) be carried by the applicant’.

Conclusion and next steps forward

The call for evidence has provided a significant amount of information, giving Defra a snapshot of the issues regarding remediating land affected by contamination and LfT. Overall, the evidence that emerged from the analysis of responses was nuanced. On the one hand:

Numerous example sites were identified where an LfT grant scheme could make the difference between land affected by contamination being remediated or not, particularly when the responsibility falls to a local, combined or mayoral authority.

Former landfill sites were the most frequently put forward type of relevant site suggested by respondents. Removing the landfill tax trap for these sites could enable contaminated soil to be move from a place where it adversely affects human health and the environment to a place where it can be safely stored and treated.

Helpful suggestions were provided regarding the processes and criteria which such a scheme would require to have effective scrutiny and enforcement and protect the waste hierarchy. 72% of respondents supported the view that the scheme should apply to sites where land remediation will have a wider economic, environmental, and socio-economic benefit. Evaluating these wider benefits must be balanced alongside addressing respondents’ concerns about it placing an overly-onerous burden on both applicants and those evaluating applications. Furthermore, sites where the economic barrier of landfill tax is not the only barrier will also require other avenues of support beyond a landfill tax grant scheme.

On the other hand, the evidence also highlighted:

• areas for potential malpractice in an LfT scheme, and particular concerns if it was available beyond just to local, combined, and mayoral authorities
• the scheme’s place in the wider waste landscape, with concerns raised regarding permits, enforcement, guidance and CL:AIRE’s Definition of Waste: Code of Practice

Defra recognises these wider concerns and will consider them further whilst exploring the potential design of a Landfill Tax Grant scheme. We commit to liaising with fraud and waste crime teams during any design of a potential scheme to prevent misuse and ensure relevant environmental protections remain in place. 

Defra also recognises the critical risks if a future scheme was not restricted to only local and combined authorities and mayoral development corporations.

Defra appreciates all the time given by the 37 respondents in completing this call for evidence and the valuable insights provided on different areas of the proposed LfT scheme, and also identifying where further deliberation and clarification is needed.