Government

Judicial review application for PFI withdrawal

Allerton

Artist's impression of the proposed Allerton Waste Recover Park

North Yorkshire County Council has submitted an application to the High Court asking for a judicial review into the Department of Environment, Food and Rural Affairs’ (Defra) decision to withdraw £65 million of waste infrastructure credits (previously known as Private Finance Initiative (PFI) credits) from North Yorkshire County Council and the City of York Council’s long-term waste management contract.

The Allerton Waste Recovery Park project was projected to save up to £320 million on the two councils’ waste management bills by ‘significantly reducing the amount of waste going to landfill and reducing the amount of landfill tax the councils have to pay’. The council said that ‘at a time when public services are under extreme financial pressure’, this saving would have made an ‘important contribution to avoiding cuts in other areas’

Withdrawal background

On 21 February, Defra announced that it would be withdrawing a total of £217.1 million of funding from three waste PFI (private finance initiative) projects, after finding that the 29 projects that already had funding were ‘sufficient’ to meet the EU’s 2020 landfill diversion targets. 

As well as the Yorkshire project, waste management plans for Bradford and Calerdale Councils and Merseyside were also affected. 

According to Defra, these three projects were the only remaining waste infrastructure credit contracts that had yet to reach financial close and would reportedly reduce the likelihood of meeting the 2020 diversion targets by two per cent. 

In a statement, Defra said: “We are investing £3.6 billion in 29 waste infrastructure projects. This will reduce the amount of waste sent to landfill, promote recycling and stimulate economic growth. We now expect to have sufficient infrastructure in England to enable the UK to meet the EU target of reducing waste sent to landfill. Consequently the decision has been taken not to fund the remaining three projects.” 

Financial withdrawal was ‘not done in the proper manner’ 

However, Richard Flinton, Chief Executive of North Yorkshire County Council said the council had on Monday (20 May) submitted anapplication for a judicial review into the matter, as they believed the withdrawal was not done ‘in the proper manner’.

He said: "We consider that the Secretary of State has not made the decision to withdraw our credits in a proper manner and that he has failed to follow Defra's own published criteria. We also consider him to have failed to take account of the waste management obligations in the Waste Framework Directive; failed to consult with us on his decision; and failed to give proper reasons for his decision.

"At no point, during a lengthy five-year procurement process, had the Government indicated that PFI funding would not be available. We were extremely disappointed when Lord de Mauley, the Parliamentary Undersecretary, said that the government would not change its decision to withdraw PFI credits for our waste management scheme. We had set out very clearly the impact that the withdrawal of waste infrastructure credits would have on our project. 

"We have now taken the decision to seek leave to apply for a judicial review of the Government's decision on behalf of ourselves and our partner, City of York Council. Whilst we wait for the outcome, we will continue to work with our contractor, AmeyCespa, to finalise the details of our long-term waste management project." 

Read more about Defra’s withdrawal of PFI credits.