Bradford and Calderdale Councils announced they been granted leave to bring a judicial review the Government decision to withdraw £62m from the waste project.
The decision, which was made in February, reportedly cost the authorities £5m.
The councils said they had no prior consultation or notice of the decision, which came only weeks before the contract was due to be signed with consortium, Pennine Resource Recovery, which had expected to start construction of an energy-from-waste plant in Bowling Back Lane, Bradford, within months.
The credits from the Government were vital to the affordability of the scheme, according to the councils, which are now seeking a reconsideration on “lawful and properly-informed ground and/or compensation for the significant and avoidable financial loss that has been suffered”.
The plant was expected to process 193,000 tonnes of waste per year, diverting most of Bradford’s and Calderdale’s waste away from landfill and provided enough electric power to heat 20,000 homes, as well as dramatically increasing recycling rates for both local authorities.
Councillor Andrew Thornton, Bradford Council Executive Member for Environment and Sport, said last night: “We welcome the High Court granting us permission for the judicial review.
“By its withdrawal of the waste PFI credits at the eleventh hour Defra pulled the rug from under our long-term solution for dealing with the district’s waste in a sustainable way. This project would have diverted almost all of our waste away from landfill in the face of rising landfill taxes. This is why we felt we had no choice but to challenge Defra’s decision through the courts.
“What is especially enraging about this whole thing is that just weeks after government pulled its support for this project they put landfill tax up by 12.5 percent, significantly increasing the cost of waste disposal for Bradford’s Council Tax-payers.
“Defra say that they don’t need this plant to meet their national target for diverting waste from landfill. If that is the case then why do they continue to increase landfill tax? That’s just a tax on local councils and a double-whammy for our council tax payers.”
Bradford Council said Defra was reviewing the support for the waste project last November, but did not tell them. Had it done, costs of £2.7m could have been saved.
The review process could take 12 months and the interim waste contract is in place until 2017.