Minister's cold feet on waste plant funding sets precedent

Withholding of PFI cash due to protest is bad news for similar operations planned across country.

Plans to reduce Britain's dependency on landfill sites by using waste to create electricity were thrown into doubt yesterday after the Government raised last-minute objections to a key scheme.

Click here to view graphic showing the nine projects at risk

Caroline Spelman, the Environment Secretary, has written to Norfolk County Council saying she is withholding £169 million of PFI funding for its waste incineration project until the council addresses local opposition.

The move has led to fears that another eight PFI waste projects in the UK could be scrapped – jeopardising an initiative to reduce the 35 million tons of rubbish that go into landfill every year.

It has also led to criticism that the Government is not committed to pushing through large-scale infrastructure projects in the face of local protests.

Norfolk County Council thought it had secured provisional PFI support to help offset the £500 million waste incineration project in King's Lynn, West Norfolk. Under the proposal, 170,000 tons of the country's rubbish which can't be recycled and goes into landfill would be transferred to the new facility and be used to generate electricity.

But the scheme was opposed by residents near the proposed location of the plant, who claimed it would damage people's health and the environment, and lead to reduced incentives to carry out more recycling. Their campaign is supported by the local MP and borough council, which organised a poll in which 65,000 people voted against plans for the incinerator.

Conservative-controlled Norfolk County Council said it had been confident of still getting support from the Government – which had backed the plan – but Ms Spelman has now written to say she is "concerned by the large volume of objections to the proposal".

Norfolk yesterday warned that the Government's new position puts at risk not just their plan but others for dealing with landfill waste. Around half of Britain's 75 million tons of waste goes to landfill and although European targets demand this be reduced by 40 per cent, it is acknowledged that some waste will never be suitable for recycling.

Waste incineration plants which generate electricity are widely considered one of the best solutions to the problem – but have proved unpopular in the communities where they are built.

"By taking this approach, the Secretary of State will send shivers down the spine of all other authorities with major waste treatment proposals in the pipeline," said county councillor Bill Borrett. "It has never previously been a criterion that a major waste treatment proposal had to demonstrate wide support in the locality it was proposed for."

The county council was backed by the Environmental Services Association, which said the "deeply misguided" move would make it more difficult for waste management companies to raise the finance for similar projects.

But Mike Knights, of the campaign against the Norfolk incinerator, said: "The percentage of waste which can now be recycled is such that there would be no need for such schemes."

A Department for Environment, Food and Rural Affairs spokesman said no final decision on the plan had been taken.