The West London Waste Authority met on Friday 19 January 2024 to approve the budget for the upcoming financial year, which includes an increase in levies for constituent boroughs. The Authority also reviewed its business plan and received updates on contracts and operations.

2024/25 Budget Approved

The West London Waste Authority has approved its budget for the 2024/25 financial year, which includes a projected increase in levies for the six constituent boroughs. The budget, detailed in the 2024/25 Budget report, anticipates a 8% growth in levies, amounting to £5.5 million, bringing the total to £72.5 million. This increase is attributed to factors including inflation, higher waste tonnages, increased insurance premiums, and variances in business rates and Lakeside gate fees.

Despite the overall increase, the Authority highlighted that the growth in levies, when offset by anticipated income from the Public-Private Partnership (PPP) contract, is reduced to 1.9%. The budget also allocates £2.8 million over three years, with £1.2 million in 2024/25, from the Authority's share of PPP income to fund programmes aimed at delivering carbon and financial savings to boroughs.

Key decisions made regarding the budget include:

• Approval of the 2024/25 budget: The overall budget was approved.
• Approval of the budget for work funded by PPP income: This confirms the allocation of funds for strategic projects.
• Approval of Pay As You Throw (PAYT) rates and levy: The PAYT levy, comprising two components, will total £57.4 million.
• Approval of the Fixed Cost Levy (FCL): The FCL is set at £15.2 million.
• Approval of recommended trade and construction prices: The Treasurer has been delegated authority to adjust these prices in-year if necessary.
• Approval of new proposed capital budgets: This includes significant investment in containers for the Social Value and Reuse programme.
• Approval of spend on containers for the Social Value and Reuse programme: £450,000 has been allocated for this initiative.
• Approval of the target level of reserves: The target level of reserves has been set at £18 million to manage risks and avoid supplementary levies.
• Noting of the Medium and Long Term Financial Plan: This plan outlines the Authority's financial strategy for the coming years.

Concerns were raised by borough representatives regarding the increase in levies, particularly after their own budgets had been set. Harrow Council noted that the increase of £517k for 2024/25 was significantly higher than the 1.6% forecast presented the previous year. Hillingdon Council suggested a more balanced approach to reserves, given the challenging local government financial settlement. Ealing Council acknowledged the inflationary pressures but sought further detail on contractual inflation assumptions.

The budget report also detailed significant increases in insurance premiums, which have risen by 518% since 2016, impacting the Supplies and Services budget. The Authority has set aside £2 million in reserves to self-insure for risks associated with Abbey Road and West Drayton should insurance not be secured.

West London Waste Authority 2023-24 Business Plan Update

The Authority received an update on its 2023/24 Business Plan, which focuses on strategic priorities for transforming waste management. Emma Beal, Managing Director, highlighted that structural changes are nearing completion, aiming to increase resilience and capability in the face of complex legislative changes. A significant concern raised was the substantial financial risk posed by the upcoming Emissions Trading Scheme (ETS), which could cost boroughs up to £3 million per annum from 2028. The Authority is urging boroughs to encourage their Environment and Finance Directors to help shape the 2024/25 programmes to mitigate these risks.

The Authority resolved to note the financial risk of the ETS and to encourage borough engagement in shaping the 2024/25 programmes.

Contracts and Operations Update

Tom Beagan, Assistant Director Operations, provided an update on the Authority's waste treatment arrangements and procurements. Most contracts are performing well, with the Severnside Energy Recovery Centre (SERC) and its associated transfer stations operating effectively. Investments are being made at the Victoria Road site, including a new fire suppression system and planned replacement of waste cranes, to improve efficiency and safety.

A recent change in law now allows householders to dispose of small amounts of 'DIY' waste free of charge at Household Waste Recycling Centres (HRRCs). Abbey Road HRRC has implemented changes to manage this, with a projected annual loss of income of around £50,000.

The Authority resolved to note the report.

Finance Update November 2023

Sapna Dhanani, Finance Manager, presented an update on the financial and operational performance for 2023/24. The Authority is currently showing a deficit, largely due to higher than budgeted contracted rates for waste disposal, significantly increased business rates, and the inclusion of SERC insurance costs within Supplies and Services.

Despite these challenges, the forecast annual position includes an estimate of PPP contract income, with two-thirds to be disbursed to boroughs. Key Performance Indicators (KPIs) show mixed performance, with two in amber and three in red. Issues with food waste collection volumes and staff turnover were highlighted as areas of concern.

The Authority resolved to note the current financial position, forecast for 2023/24, and the KPIs to date.

Audit Committee - Terms of Reference

The Authority approved proposed amendments to the Terms of Reference for the Audit Committee. These changes, aligned with CIPFA's guidance, aim to enhance governance, risk, and control arrangements. Key amendments include allowing all six Authority members to be part of the Audit Committee, introducing a Vice-Chair role, and expanding the committee's responsibilities to provide greater clarity and align with best practice. The committee will now meet at least twice a year, with pre-meeting reviews by the Chair, Vice-Chair, and Independent Member.

The Authority resolved to approve the amended Terms of Reference for the Audit Committee.