Resource Use

Judicial review into Yorkshire incinerator dropped

Impression of the proposed Allerton Waste Recovery Park

North Yorkshire County Council and York City Council have dropped their legal case against the government, after concluding that the judicial review was ‘not in the public interest’.

The judicial review centred on 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 the councils’ long-term waste management contract.

The Allerton Waste Recovery Park project wasprojected 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 councils 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’.

However, in February 2013, Defra announced that it would be withdrawing a total of £217.1 million of funding from three waste PFI projects, including Allerton, after finding that the 29 projects in England that already had funding were ‘sufficient’ to meet the EU’s 2020 landfill diversion targets. 

As such, North Yorkshire County Council and York City Council (as well as Bradford and Calderdale Councils, also affected) sought a judicial review into the decision. Norfolk County Council was also affected by Defra’s decision, but has not sought legal action against government.

However, after seeking legal advice, the Yorkshire councils have now dropped the case, which was due to be hear at the ‘end of January’, as it was deemed it would ‘not be in the public interest for the councils to continue to prosecute’ as well as being ‘unlikely’ to change Defra’s decision.

David Bowe, North Yorkshire County Council’s Corporate Director for Business and Environmental Services, said: “The advice is that the councils’ case is strong and we continue to believe that Defra made an unlawful decision, but it is clear from this and other recent decisions that Defra do not wish to continue to support projects of this type anymore. 

“Even if we win, we cannot guarantee that we would get the credits back.”

Bowe added that the councils feel ‘very disappointed’ by the way Defra has ‘conducted’ itself, but accepts that the argument ‘is not worth pursuing’.

He continued: “The loss of credits is a blow, but it doesn’t mean the project is over. We are continuing to work with our contractor, AmeyCespa, to mitigate the loss of waste infrastructure credits and complete the last details of the contract. The final decision on whether [the] project remains affordable and value for money will be made later in 2014 when this work is completed.”

If the councils do decide to terminate the contract with AmeyCespa, however, they could be liable to pay the waste management company up to £5 million for breach of contract. (The councils have reportedly already spent £7 million on the case.)

This could see the councils face a similar predicament to Norfolk County Council, which has agreed to press ahead with plans to build an incinerator in the area after finding that rejecting it would ‘trigger an obligation for the county council to make a payment of £20- £30 million within weeks of their decision, which would effectively bankrupt the council’.

A Defra spokesperson said the department was ‘pleased’ that the Yorkshire councils have withdrawn their claim, as it believed its decision was ‘entirely lawful and in the interest of taxpayers’.

Read more about the Allerton Waste Recovery Park or the background to the judicial review.