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5.4 Funding the AWP
Funding of the necessary investment for new waste-management
infrastructure and operations may be obtained in a number of different ways, including
private finance, through a PPP or PFI arrangement (refer to Annex 3), or traditional direct
funding by the local authority. The Scottish Executive has established the Strategic Waste
Fund (SWF) to allow specific grants to be paid to local authorities to assist with additional
costs to meet the requirements of the AWP (refer to SWF Guidance available from the Scottish
Executive, contact details in Annex 5). Additional funding may also be available in some
cases from other sources, e.g. landfill tax credits, New Opportunities Fund 'Transforming
Waste', EU structural funds and the sale of packaging waste recovery notes (PRNs).
Further information is available on the web site: http://www.sepa.org.uk/nws/funding/index.htm
The cost of implementing the BPEO identified in this plan is far in excess of current local
authority waste-management budget expenditure. The Scottish Executive's Strategic Waste
Fund, worth £230 million over the financial years 2003-2004, 2004-2005, 2005-2006, to
assist the implementation of the AWPs. Despite this new funding, it is clear that this will
be insufficient to implement each element of the AWPs.
Table 5.1 - Projected Available Strategic Waste Funding
| Year |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
| Amount |
£3 m |
£4.2 m |
£16 m |
£30.2 m |
£90.2 m |
£111.7 m |
Source: Scottish Executive Environment Department
There is an expectation that much of the required infrastructure will be brought forward by
the private waste-management industry. In order to achieve this, the private sector will have
to be confident that they can re-coup this investment through waste-management contracts
with waste producers, in this case local authorities.
One of the aims of the AWP is to establish what facilities are required and the quantities
of waste available to provide private sector financiers with the confidence to invest. An
additional mechanism to encourage investment by the private sector is the Waste
Management/Recycling PFI Project. This mechanism enables local authorities to engage the
private sector in large-scale capital investment projects that would normally be beyond the
resources available to local authorities. It is expected that the Waste Management/Recycling
PFI Project will play an important part in financing implementation of the BPEO.
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