Merseyside avoids 5.8% levy rise as councils use Covid funds

The Merseyside Recycling and Waste Authority (MRWA) has approved a budget which will see the levy charged to authorities rise 1.74% in 2022/23 to £79 million.

However, the rise was less than the 5.8% projected last year as the member councils were able to use central government Covid funds instead to cover some costs.

Despite this, the MRWA has warned that costs could rise by as much as 7% and exceed £80 million in the 2023/24 financial year as “an element of catching up” could come into play.

Volumes

The MRWA has seen disposal costs rise as tonnages have risen 14% above pre-pandemic levels in the last two financial years.

The authority said in the budget: “This continuing high level of waste puts significant logistical pressure on the system as well as making it significantly more expensive for the authority”.

This could also be a continuous impact, the MRWA warned, “as the longer-term consequences of Covid which may include increased home working may see waste patterns reflecting those changes”.

Budget

While the rise sees disposal costs for the authority rise to nearly £80 million, the 1.74% is significantly less than the 5.8% previously touted last year.

During the autumn, the MRWA said it was “made clear” to district council treasurers that the MRWA’s ability to reduce the likely Levy demand during 2022/23 was “very limited”, especially because the levy increase from the previous year was curtailed.

Waste volumes have risen across Merseyside during the pandemic

However, faced with a rise of 5.8%, “the Merseyside Treasurers asked MRWA “if it would be possible to identify elements of one-off costs associated with the response to Covid19”.

The MRWA report added: “If MRWA was able to identify one-off additional costs arising in 2021-22 the Treasurers were able to consider making a one-off contribution from their Covid funding. … The group agreed that they would go forward with an option that included MRWA billing the councils for one off costs”.

For 2022/23 the council Treasurers have confirmed that they agree in principle to support a funding approach where they provide Covid one-off funding during 2021/22 to support the authority’s spending.

“The general fund support for the Levy will enable the [MRWA] to keep the overall Levy increase in 2022-23 down to 1.74% (compared with a planned 5.8%), which is in line with councils’ expectations for the year. Under the Levy mechanism different Councils will receive different Levy increases,” the MRWA added.

While the MRWA was able to fend off higher charges this year, there is likely to “be an element of catching up” in 2023-24, where costs have been projected to rise by 7% to £84 million.

MRWA

Formed in 1986, the MRWA manages waste and recycling on behalf of five Merseyside local authorities and via a separate partnership for Halton council.

The waste disposal authority has contracts with several companies for the collection and treatment of waste. In 2009, the MRWA awarded Veolia a 20-year waste management and recycling contract worth £640 million (see letsrecycle.com story).

In 2014, the MRWA awarded a 30-year residual waste treatment contract worth £1.8 billion to a consortium called MERL, which was led by Suez UK (see letsrecycle.com story). Under the contract, residual waste is taken by rail from Knowsley to a Suez energy from waste plant in Redcar, where it is used to create electricity and steam.

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