National Federation of Builders says proposed landfill tax reforms will make construction projects unviable without boosting recycling

The government’s proposed changes to landfill tax will not create a circular economy, according to the National Federation of Builders (NFB).

The NFB in a short report warned that the changes would not only make some construction projects unviable but would also be ineffective in driving waste away from landfill sites.

The government earlier this year consulted on the reform of landfill tax in England and Northern Ireland, with the government proposing to introduce a single rate of tax by 2030.

There are currently two rates of landfill tax: the standard rate of £126.15 per tonne and the lower rate, which broadly applies to inert, less polluting materials, is £4.05 per tonne.

The government is proposing introducing a single rate and scrapping the lower rate – which would have a significant impact on the housebuilding and construction sector, which currently pays £4.05 to dispose of each tonne of topsoil.

The Home Builders Federation earlier this month said the tax will add £15,000 to the cost of building every home. 

The NHF report today said the measure would also be ineffective in its goal of enabling a circular economy.

It said: “The problem is, there is little infrastructure for pathways other than landfill for many materials. Recycling is expensive and technologies to aid it take a long time to develop; and there are very few facilities to exchange excavated materials for later reuse.”

The report highlights issues with lack of site capacity and lack of enforcement. It said an increase to the lower rate would provide incentives to commit waste crime and tax evasion.

Instead the NFB points to examples in other countries of alternative ways of boosting recycling. It makes several recommendations including; creating digital records for buildings, rewarding firms for recycling and reuse, increasing landfill capacity, tackling waste crime offenders and retaining disposal permits.

Rico Wojtulewicz, head of policy and market insight at the NFB, said: “If the government is set on introducing a landfill tax, it must first understand how the waste system operates and why, as well as the removing the barriers for re-use or recycling.

“If the ambition is a circular economy and not a tax grab, the government will need to move at pace with new policies. For example, the Ministry of Housing, Communities and Local Government must fix planning to enable soil exchanges and quarry backfilling, the Environment Agency will need to fix the waste permit system, while investing in enforcement techniques, and Defra need to go back to the drawing board to identify where and how more re-use can exist.”