Government approach to large parts of waste crime "closer to decriminalisation" than tackling it, says Public Accounts Committee

In a report today (October 19) the Public Accounts Committee says that despite the antisocial, polluting and costly impacts of waste crime, Defra and the Environment Agency are making only “slow and piecemeal” progress in implementing the 2018 Resources and Waste Strategy - and there is still no strategy or plan for achieving its hugely ambitious target of eliminating waste crime by 2043. Four years into that 25-year target measures central to achieving the aim such as digital tracking of waste are “not even at the pilot stage”.

Waste crime - which includes well-known issues such as fly-tipping as well as illegally mis-categorising waste for disposal - is a huge issue in England. Antisocial and polluting, it already costs the economy around £1 billion a year - though that is likely an underestimate - and the number of incidents of waste crime and the cost of addressing them has been increasing over recent years.

The Committee says “waste crime is not getting the local or national attention needed to effectively tackle it, despite it being on the rise and increasingly dominated by organised criminal gangs” and with the cost of living crisis potentially further increasing the “incentives for people to get rid of waste inappropriately”.

Interventions such as landfill tax and local charges for disposing of waste create perverse financial incentives to commit waste crime, with penalties not proving effective. HMRC has only pursued one prosecution for landfill tax evasion and it failed, at a cost to the public of £3.5 million. The Committee is also concerned about the levels of illegal waste exports, which the “Environment Agency is not doing enough to prevent”. By the Agency’s own admission, most of these illegal exports end up in non-OECD countries where controls on the harms it may cause and capacity to ameliorate them are less.

Dame Meg Hillier MP, Chair of the Public Accounts Committee, said: “Another day, another policy headline with no plan or demonstrable progress towards achieving it, despite years of resources put in. The result is property and countryside blighted by fly-tipping, toxic leaks into our soil, and tonnes of waste illegally exported by the UK to developing countries even less able to cope with its indefinite negative effects.

“With growing involvement of criminal gangs, adept at evading detection and who regard the fines if they are caught as merely a business expense, a much more serious approach to enforcement is required. Currently the Department’s approach to large parts of waste crime is closer to decriminalisation. Targets become meaningless – rubbish, you might say - when there isn’t even a strategy for achieving them, much less any indication or measurement of progress. Sadly, all the signs 4 years into a 25 year target period are that the problem is getting worse.”

 PAC report conclusions and recommendations: 

1. Progress implementing the actions from the Resources and Waste Strategy has been slow and piecemeal, and Defra does not have an outline delivery plan for achieving its ambition of eliminating waste crime by 2043. The 2018 Resources and Waste Strategy set the goal of eliminating waste crime within 25 years and listed 14 actions to be taken. Mid-way through 2022, only three of these actions have been completed: establishing the Joint Unit for Waste Crime, making changes to legislation to give the Agency greater powers and giving the Agency access to police intelligence systems.  Access to police systems is only very recent and witnesses were not yet able to point to it leading to successful outcomes, such as prosecutions. Fundamental changes to the system, such as digital waste tracking and reform of the carriers, brokers and dealers’ regulations, are still the subject of consultation on how to implement them. In addition, Defra has been clear that the 2018 Strategy did not attempt to set out a pathway to the elimination of waste crime. Defra cannot yet track its progress towards this goal. It is relying on an externally contracted evaluation of the strategy, due to complete in 2027, to identify further actions that it may need to take. The Agency is exploring ways to raise additional funds - another action from the strategy - through charges or other contributions from the waste industry. 

Recommendation: Defra should increase the impetus with which the Resources and waste strategy is taken forward. By October 2022, it should provide the committee with its outline plan for achieving the elimination of waste crime by 2043, and provide annual updates on progress against this plan. 

1. Official data do not capture the true scale and impact of waste crime, and government initiatives do not amount to a convincing overall plan to address this. Waste crime is greatly under-reported, so government and Agency statistics do not capture the full impact it has on communities, businesses and the environment. Only around a quarter of waste crime is reported and the Agency cannot estimate the quantity of waste that is illegally exported. Local authorities do not report fly-tipping to Defra on a consistent basis. To improve waste crime data, Defra and the Agency are placing their trust in a mix of initiatives, including encouraging public reporting, introducing digital tracking of waste and technological initiatives such as use of drones. But for the public to go to the effort of making reports, they will need to know that action will be taken in response and they will hear what it is. In the UK outside England environmental regulators are exploring the use of satellite technology to identify serious waste crime.  

Recommendation: Defra and the Agency need to explore the full range of potential solutions to data weaknesses, including for example satellite technology, and ensure successful delivery of existing initiatives to improve data; where these initiatives rely on public reporting there should be appropriate capacity to follow up reported incidents. 

1. Over recent years the landfill tax regime has successfully encouraged recycling but has increased the incentives to commit waste crime, and HMRC has been slow to prosecute offenders. Landfill tax, introduced in 1996, has driven down the amount of waste sent to landfill and increased recycling, but has increased the incentives to dispose of waste illegally to avoid paying the tax. Across all taxes, the gap between the amount of tax due and the amount collected is estimated to be proportionally one of the highest for landfill tax. HMRC works with landfill site operators to identify and rectify landfill tax non-compliance, primarily through civil sanctions, preventing significant losses. But HMRC finds criminal investigations difficult and time-consuming and has to balance the potential benefits against the impact on other aspects of its work. HMRC has not yet achieved a single successful prosecution for landfill tax evasion. The one investigation where it did try to prosecute the alleged offenders – Operation Nosedive - cost £3.5 million yet ended without going to court because evidential requirements were not met. HMRC was frank that it is still learning how best to investigate such crimes. HMRC is engaging with HM Treasury’s current review of landfill tax. 

Recommendation: Defra should work with HMT and HMRC to ensure the current review of landfill tax takes account of the incentives that the tax as currently designed creates to commit waste crime. 

HMRC should report by the end of the year on how it has improved its approach to landfill tax prosecutions. 

1. The current sanctions are not effective in deterring people from committing waste crime. Under the current regime almost anybody can register with the Agency as a waste carrier and present themselves to the public as a legitimate person to take away their waste. The Agency is increasingly concentrating its enforcement efforts on the most serious waste criminals. We heard in stark terms about the difficulties, delays and dangers involved in tackling organised criminals of this type, and how they regard fines as ‘business expenses’. Only jail sentences have a real impact. Meanwhile, much waste crime is responded to with a minimal, or no, enforcement response: fewer incidents are investigated, investigations are taking longer, and advice and guidance or warning letters are the most common responses for most types of waste crime. The number of prosecutions per year has fallen by more than 90% since their peak in 2007-08, with court delays slowing their progress. Defra, if it is serious about eliminating waste crime, has a long way to go from the current position where the approach to large parts of waste crime is closer to decriminalisation. 

Recommendation: Defra, the Agency and HMRC should work with relevant bodies within the criminal justice system to develop a plan for making enforcement more effective across the full spectrum of waste crime. This should include how to speed the process up and consideration of whether the sentencing guidelines need strengthening. 

1. Defra is not doing enough to support local authorities to tackle fly-tipping. Fly-tipping has a big impact on the public: there were well over a million recorded incidents in England in 2020-21. Reported fly-tipping in urban areas is high while fly-tipping can blight lives in rural areas despite remaining substantially unreported. Defra is adamant that it is the responsibility of local authorities to tackle fly-tipping, supported by guidance and powers to impose sanctions that Defra develops and provides. Yet local authorities’ clear duty is to clear fly-tipped waste from land it controls, while investigating fly-tipping or tackling the perpetrators are choices constrained by local authorities’ limited resources; different local authorities show highly variable practice. Defra is still working on a fly-tipping toolkit announced in 2018 and has recently provided 11 authorities with between £25,000 and £50,000 each to trial approaches to preventing or addressing fly-tipping. Defra allocated this funding on the basis of bids from invited authorities, which may have rewarded those authorities with the most capacity to bid rather than the best ideas. Defra was not able to explain the gap between the scale of fly-tipping and action on the ground, or explain how its overall goal of eliminating waste crime was compatible with this level of variation. 

Recommendation: Defra should work with local authorities to set a clear national framework for tackling fly-tipping, setting overall expectations and promoting good practice, while allowing local authorities the flexibility to respond to local circumstances. 

1. We are concerned that the Agency is not doing enough to prevent the illegal export of waste. The Agency estimates that around 14 million tonnes of waste are legitimately exported each year. In the five years to 2020-21, the Agency inspected 1,100 shipping containers per year on average, preventing around 18,000 tonnes of waste from illegal export and saving the economy £1.3 million annually. The Agency believes that most illegally exported waste goes to non-OECD countries where controls on the harms this waste may cause are weaker. The Agency accepts that, despite its efforts, it does not know the total amount of waste that is illegally exported. However, the Environmental Services Association estimates that around 400,000 tonnes of waste are exported illegally each year, costing the economy £42 million. The Agency can do more here - it told us about a record £1.5 million fine it achieved for waste export offences committed by a waste disposal company last year, which was the company’s second offence within two years. In this instance, investigators were able to prevent 16 25-tonne containers from being exported, but another 26 containers had already left port for India or Indonesia. 

Recommendation: The Agency should write to us within six weeks setting out what actions would be required to enable it to understand the true scale of illegal waste exports and what further action it might take to prevent them. 

1. The digital waste tracking system is still in development after four years despite its implementation being core to combatting waste crime. Recording waste movements digitally rather than on paper is an important initiative from the 2018 Waste and Resources Strategy. Defra and the Agency believe it will give them an improved understanding of waste movements and enable them to better identify misclassification and improper disposal of waste. Defra is creating a prototype in-house, with 1,600 users currently testing it. It is seeking an IT partner for the next stage of development and expects to roll out the system in 2024, following the passage of secondary legislation and piloting. We acknowledge that this project has ambitious aims: the current plans are to record 10 items of information at each movement, treatment or transfer of waste, and 200 million tonnes of waste are produced each year. Defra is confident it can successfully deliver this project based on its record of delivering the IT systems it put in place for leaving the EU. But progress to date is not commensurate with the need for digital tracking to underpin other actions in the Waste and Resources Strategy, and our recent experience of large-scale digital programmes across government does not give us the same confidence. 

Recommendation: Defra should write to the committee when the IT contract is let to confirm that it has happened and what the plan is for full implementation.

ENDS 

Full details of the inquiry including evidence received (under “Publications) can be found here: https://committees.parliament.uk/work/6712/government-actions-to-combat-waste-crime/

Following publication of this report on Wednesday, Deputy Chair Sir Geoffrey Clifton-Brown will lead a statement and discussion in the House of Commons on Thursday morning the 20^th October.