MPA calls for a third to a half of annual ALSF funds to be allocated to local authorities in quarrying areas

12 April 2010

New research by the Mineral Products Association (MPA) has revealed that local communities are failing to benefit fully from the Aggregates Levy Sustainability Fund (ALSF), the main purpose of which is to support community and environmental improvement schemes in areas affected by aggregates extraction.

In the last eight years since the introduction of the Aggregates Levy (2002/3 to 2009/10) the Levy has raised a total of £2500 million. Of this total, £168.1 million (6.7 per cent) has been used to finance the ALSF, of which £18.95 million has been allocated to and spent by local authorities. This means that the proportion of the Levy going to benefit communities in quarrying areas is less than 1 per cent (0.75 per cent) of total Aggregates Levy revenue.

MPA is calling for the ALSF spending on local communities in quarrying areas to be at least 33 per cent and up to 50 per cent of the total annual fund per annum from 2011/12 onwards, and for measures to be introduced to ensure that this funding is used for its intended purpose – to directly benefit local communities in quarrying areas.

Simon van der Byl, Executive Director of the MPA said "A key objective of the ALSF is that Aggregate Levy funding is returned to benefit communities in quarrying areas. Currently the share of Aggregates Levy revenue and ALSF funding in these areas is far too low. Additionally, the funding allocated to local authorities should not be diverted for other spending as is currently sometimes the case.

"We believe that the key use of the Fund should be for local communities, therefore Government must focus more resource in this area. The record of using less than 1 per cent pa of the Aggregates Levy revenue for local community benefit is far too low.

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We are encouraged that in a recent Parliamentary debate Environment Minister Dan Norris indicated that his Department was looking at better targeting of ALSF into quarrying communities."

Simon van der Byl added "For as long as the Aggregates Levy remains in force, we will continue to place high emphasis on the proper distribution of the ALSF. We will be making representation to the new Government to both retain the Fund and give local communities a fairer share of the tax take."

Notes

1. The Mineral Products Association (MPA) is the trade association for the aggregates, asphalt, cement, ready-mixed concrete, lime, mortar and silica sand industries. The MPA represents 100 per cent of GB cement production, 90 per cent of aggregates production and 95 per cent of asphalt and ready-mixed concrete production. Each year the industry supplies £5 billion of materials to the £110 billion construction and other sectors. The MPA has a growing membership of over 261 members across the UK. Industry production represents the largest materials flow in the UK economy.

2. The MPA remains opposed to the Aggregates Levy, but strongly supports the operation of the Aggregates Levy Sustainability Fund as long as the Levy exists. It has become increasingly obvious that the Aggregates Levy isn’t working environmentally and will add significant additional costs to the construction sector and clients as industry struggles out of recession. The Fund is supposed to be the main means by which the Levy brings environmental benefits to local communities.

3. In his speech at the ALSF Conference on 3 March organised by Natural England Nigel Jackson, Chief Executive of MPA, set out five key MPA positions on the future of the Aggregates Levy and ALSF:

• Firstly - that the existing freeze on its indexation should be extended indefinitely and certainly until there is a proven and sustained recovery.

• Secondly - that the undoubted improvements the industry has made in its operational and environmental performance are properly evaluated and recognised by seeking to reduce the quantum of the levy itself.

• Thirdly – that the ALSF continues for as long as the levy is in place but its strategic management and delivery is reviewed to align more with the principles of sustainable development and that significantly more funding is directed to benefit local communities impacted by aggregate extraction.

• Fourthly - that the creeping migration and diversion of funds away from the original and core purposes of the fund into general exchequer is arrested and reversed.

• And finally – attribution, the industry want plaques and launch ceremonies as these help raise the profile of the industry and help make the link between the use of the fund and the industry.

4. Since the introduction of the Aggregates Levy in 2002/3, the Levy has raised a total of £2500 million. Of that a total of £168.1 million has been spent on the ALSF in England. If these totals £18.95 million has been allocated and spent by local authorities. Therefore, the proportion of ALSF going to local authorities to benefit communities in quarrying areas is 6.7 per cent of ALSF 0.75 per cent of total Aggregates Levy revenue.

5. On 30 March 2010, DEFRA Minister Dan Norris said: "…should the Department be in a position to continue the fund beyond 2010-11, I have asked my officials to consider the option of targeting the communities element so that moneys for local communities reach those most affected by aggregates extraction."