Time For Intervention – Reflecting On 2016

stewart-davies_augeanIn his first column as ESA chairman, Stewart Davies reflects on 2016 and how we can create a platform for making better use of resources, strengthening the economy and improving environmental outcomes in 2017


2016 has witnessed a huge amount of political turmoil. Politics feels like it’s become unpredictable, with huge shifts in geopolitical trends challenging financial, economic and trade policies. As these global headwinds have buffeted others, they have also impacted the waste and recycling industry. June’s referendum result has added uncertainty in the sector in a number of ways. Changes since the Brexit vote have impacted international trade and have the potential to alter radically our sector’s strategic direction, while at the same time giving us an opportunity to revisit the technical regulations and standards which govern us.

January 2016 now seems like a long time ago. Difficulties in recycling markets continued to weigh us down and the need for a long-term strategy to give us certainty of outlook seemed greater than ever. Defra had limited resources to address strategic questions and so ESA, with our members’ interest in evidence-based policy, investigated some of the biggest blockages holding the industry back, and what could be done to make things work better both for our sector and for the UK as a whole.

The biggest blockages came from the fragmented supply chain and from waste crime. The former prevents us from realising economies of scale, while the latter leads to 2m tonnes of household and commercial waste leaking away from the legitimate, regulated industry and into the hands of criminals every year. These blockages are stopping the investment we need to grow our industry. ESA believes that there are four main areas where intervention can make a big difference.

Combat Waste Crime

The first is doing more to combat waste crime. The Government has poured more resources into this in recent years, with some clear successes, but the problem remains widespread. We need fundamentally to examine what is driving crime in our sector and the right interventions to be made to stop it.

The second is to promote end markets for recycled materials, to create a stronger “pull-factor” in the recycling market. We need substantial changes to encourage our manufacturers to use recyclates in their products if we are to achieve a more circular economy.

The third is to realise economies of scale. There is huge scope to reduce duplication and to realise greater efficiencies. This could happen through more joint working and cooperation between local authorities. It could also happen through improved coordination between the management of the household and commercial waste streams.

phonesThe fourth area of focus for our strategy was to increase the role of extended producer responsibility (EPR). We need the producers of products and packaging to be truly responsible for their goods at the end of life. In the short term this has the potential to ease financial burdens on our cash-strapped councils and in the longer term it has the potential to drive resource efficiency and realise outcomes that are better for the UK’s economy and better for the UK’s environment.

June’s referendum outcome has undoubtedly changed the terms of the debate for our sector, as with many others. ESA is clear that the areas for intervention that we recommend and evidence through our strategy work will be of huge benefit to our sector, regardless of the terms of our exit from the EU.

A Strategy Vacuum?

At the start of the year there appeared to be a strategy vacuum facing our industry in England. As we now approach the end of the year there are multiple opportunities to feed into governmental strategic thinking. Defra’s 25-Year Environment Plan is one such opportunity. The industrial strategy coming out of BEIS and across government will be another, and the needs assessment from the National Infrastructure Commission will be a third.

All of these provide us with a platform to set out the role for making better use of waste as a resource, strengthening the economy whilst improving environmental outcomes.

In the new year the Government will consult on a 25-year plan for the environment. Waste and recycling will need to be part of that plan and ESA’s strategy work in 2016 means it is well advanced on providing the evidence base to make an effective input to it. 2017 could be the year that EPR forms a centrepiece of the Government’s thinking on waste as waste resources become further recognised as a fundamental constituent of the UK’s future industrial strategy.

Prior to being appointed as chief executive at Augean, Stewart had roles at ICI, British Steel, Corus and Rugby Cement. He took up an interim role as MD of the Local Government business unit in Serco’s Integrated Services division, followed by a position as MD of Government Property and FM services. A further role as bid director at Serco, and MD of Romec preceded his appointment at Augean. Stewart was elected chair of ESA in October 2016 and has been Business Commissioner of the Sustainable Development Commission (2006-10) and Governing Board member of Innovate UK (2009 to 2015).

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