Fact Sheet 8: Financial Savings

In their recent literature and in many of the public meetings, both NYCC and AmeyCespa have quoted, as one of the prime reasons, for the Allerton incinerator the “massive saving to local taxpayers of £320m over the next 25 years”.

Let us examine this claim.

The ‘saving’ (£320m or £12.8m per year) is in comparison to a ‘Do Minimum’ scenario. This means don’t manage, change or influence the current situation for 25 years and just assume all trends continue. What management team in any commercial organization would be foolish enough or brave enough to use this as their only baseline for comparison and to then use this theoretical ‘saving’ as the major plank in their marketing?

Long term planning is recognized as extremely difficult and the only certainty is that it will be wrong. This is particularly the case when there are a number of ‘wild cards’ of which one has little or no control. Any forecast therefore is only as good as the assumptions used and it should be tested/challenged rigorously with a realistic sensitivity analysis for all major variables.

Included in the NYCC calculations are some very risky, outdated and poorly researched assumptions, which when proven wrong, will cancel out most of the so called ‘savings’. For example, are you aware that underpinning the £320m is an assumption that household waste will increase over the period? This has been included despite the fact that all recent trends indicate the exact opposite. The total volume of waste since 2006 has been falling; recycling is increasing; waste per capita is falling and the rate of decline is accelerating. This alone probably means that the NYCC estimate is incorrect by the end of the period by approximately 30% (equivalent to 100,000 tonnes per annum) and that the incinerator is vastly oversized, if indeed justified at all!

There are many other obvious examples of flaws including their assumptions or omissions regarding:

  • Kerbside recycling levels
  • Landfill tax
  • Carbon emission tax
  • Comparative gate fees

It is clear that the £320m theoretical ‘saving’ on which NYCC have built their case will not materialize. Furthermore, even using the Council’s own figures (£1.48bn cost) the Allerton project will be costing double that of alternative schemes, which have been presented to Council Officers and which involve no risk, no capital expenditure (no incinerator) and will give us the flexibility to adapt to the changes as they occur in technology, society and the market.

In essence, if we abandon the AmeyCespa plan and choose an alternative approach, we could save not a theoretical £320m but a more certain £900m or even £1.2bn.

Why would you vote for a plan, which locks us into 25+ years of risks and uncertainty and which will cost us a minimum (using the council’s own optimistic figures) of twice as much as more viable, less contentious, alternatives?

In a period of austerity, when all councils will be making cuts to balance their budgets these substantial savings cannot be ignored!

Councillor – please ask the obvious questions and examine the so called Business Case carefully. In our opinion the NYCC figures are the product of the ‘Smoke & Mirror’ school of logic.

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