The West London Waste Authority met on Friday 19 January 2024 to approve the 2024/25 budget, which includes an increase in levies for constituent boroughs. The Authority also discussed updates on contracts and operations, the 2023-24 business plan, and a finance update for November 2023.

2024/25 Budget Approved

The West London Waste Authority has approved its budget for the 2024/25 financial year, which includes an 8% increase in levies for the constituent boroughs, totalling £57.4 million for Pay As You Throw (PAYT) and £15.2 million for the Fixed Cost Levy (FCL). This increase is attributed to a combination of factors including inflation, increased contract costs, and higher business rates.

The budget proposal, detailed in the Public reports pack Friday 19-Jan-2024 11.00 West London Waste Authority.pdf, forecasts a total expenditure of £83.2 million, an increase of £10.1 million from the previous year. Key cost drivers include waste transport and disposal, premises costs, and employee expenses.

A significant portion of the budget is allocated to the Waste Transport and Disposal (WTD) costs, which account for the majority of the Authority's spending. The budget for WTD is £55.1 million, an increase of £3.6 million. This is largely driven by increased contract costs due to inflation, an increase in mattress and green waste tonnages, and higher rubble and wood volumes.

The budget also includes a programme of work totalling £2.8 million over three years, funded from the Authority's share of income from the Public Private Partnership (PPP) contract. This programme aims to deliver carbon and financial savings directly to boroughs. For 2024/25, £1.2 million is budgeted for these programmes, focusing on citizen perception, social value and reuse, and digital twin technology.

The Authority also approved a capital budget of £1.25 million for various projects, including £450,000 for containers for the Social Value and Reuse programme. The target level of reserves has been set at £18 million to act as a buffer for managing risks and avoiding supplementary levies.

Boroughs expressed concerns about the increase in levies, with Harrow noting that the notification of the increase came after their draft revenue budget had been agreed. Hillingdon welcomed the early anticipation of PPP income but suggested that any further PPP income arising at year-end should also be considered for disbursement. Ealing noted that while the increase in levies is a challenge, the paper sets out the reasons for the increases and specifically the inflationary pressures experienced by the WLWA.

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 West London's waste management model. The report highlighted that structural changes are nearing completion, and while recruitment remains challenging, these changes are intended to increase resilience and capability in the face of complex legislative changes.

A significant concern raised was the substantial financial risk posed by the Emissions Trading Scheme (ETS), which is expected to come into effect from 2028. Projections indicate it could cost up to £3 million per borough per annum. The Authority is seeking borough savings targets to drive its priorities and encourage collaboration between borough Environment and Finance Directors to shape the 2024-25 programmes.

Contracts and Operations Update

An update was provided on the Authority's waste treatment arrangements and procurements. Most contracts and operations are performing well, with the WLER contract performing well despite challenges over the Christmas period. However, fires continue to pose a major risk to transfer stations, with the number of fires in 2023/24 already exceeding the previous year. Investments in new fire suppression systems are underway.

A change in law now allows householders to dispose of small amounts of 'DIY' waste free of charge at Household Recycling Centres (HRRCs), which is expected to result in a loss of income of around £50,000 per year. The Abbey Road HRRC has a year-to-date diversion rate of 78%, the second highest of the borough sites.

Finance Update November 2023

The Finance Manager presented an update on the financial and operational matters for November 2023. Day-to-day financial performance for the year-to-date shows a deficit, largely due to higher than budgeted contracted rates for waste disposal, significantly higher business rates, and the inclusion of SERC insurance within supplies and services.

The forecast annual position includes an estimate of PPP contract income and a two-thirds disbursement to boroughs. Operational performance KPIs show two KPIs in amber and three in red, indicating areas requiring attention. The report noted that there were no delegated decisions made.

Audit Committee - Terms of Reference

The Authority reviewed proposed amendments to the Terms of Reference for the Audit Committee. Key changes include allowing all six Authority members to be part of the committee, introducing a Vice Chair role, and expanding the committee's responsibilities to align with CIPFA's Position Statement. The amended Terms of Reference were approved.

The Treasurer acknowledged a potential risk of conflicts of interest as the Authority and Audit Committee are comprised of the same members, but considered this acceptable in terms of governance, relying on the External Auditor and Independent Member for assurance.