International Review of Waste Management Policy - Department of ...

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� To ensure that where commercial companies and local authorities compete
directly in the market, that the two services are treated equivalently from the
point of view of VAT. One way of doing this would be to require local authorities
to charge VAT to customers where they engage in what is effectively the
provision of a commercial service.
In the absence of these changes, the rather obvious point is that local authorities, in
benchmarking the value for money of their services, would effectively have a
significant head start in seeking to demonstrate such value. Indeed, the
consequences might be to preserve existing levels of inefficiency as long as these
were not in excess of the implied level of cost advantage implied by the VAT regime.
If this delineation is successfully achieved, and made explicit in legislation, one might
have good reason to hope that some of the existing tensions will become less
problematic. The spheres of influence will be clarified somewhat.
Indeed, we doubt, if this situation were to become established, whether the current
role of local authorities in issuing waste collection permits, would remain as it
currently stands. The OECD was keen to highlight the potential for local authorities to
make use of their licensing powers to improve the quality of service delivery:
29/09/09
As for local authorities, in the short-term, they should review how they could
better make use of their licensing authority. As this step, however, will
increase conflicts of interest under the dual responsibility model, it may be
wise to transfer licensing authority to the regional or national levels in the
longer-term.
If, as proposed elsewhere in this review:
� Ambitious targets are set for household waste management (see Main Summary
Report);
� Local authorities are given responsibility for household waste collection (see
Annex 3.0);
� Service standards are set for commercial and industrial waste collection (see
Main Summary); and
� Levies on residual waste management are set so as to internalise externalities
and improve the management of waste (see Annex 56.0),
then the key issue in terms of licensing waste collectors is likely to become one of
ensuring the collectors are registered and operating in line with Articles 26 and 34 of
the Waste Framework Directive.
As an additional point, as mentioned above, it is not clear why local authorities play
different regulatory role in respect of producer responsibility for packaging to their
role in other producer responsibility schemes. It may be that there are good reasons
for this (the diffuse nature of the responsibility), but there might also be some
inefficiencies in the regulation of these schemes, not least to the extent that the
regulated parties across the different waste streams are, in some cases, one and the
same entity.
Finally, it is difficult to completely separate concerns regarding the role which local
authorities play in the market from their role, in the regions, as developers of