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Wed March 03 2021

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Revived aggregates fund proposed

2 Mar 18 The Mineral Products Association (MPA) has set out proposals for a new aggregates levy community fund (ALCF) to be introduced in England in April 2020.

Proposals for the ALCF will build on the legacy of the previous aggregates levy sustainability fund (ALSF) that was axed in 2011, but at a lower cost.

The MPA, which represents quarry owners and aggregate producers, is proposing that 8p per tonne – or 4% – of aggregates levy revenue be allocated to the new ALCF to fund local community projects and nature conservation projects. It would mean that a quarry selling 200,000 tonnes of aggregates per year would generate aggregates levy credits of £11,200 annually for community use, equivalent to £112,000 for a 10 year operating life.

Designed to support delivery of the government’s ‘localism’ agenda and the recently announced 25-year plan for the environment, proposals set out include the introduction of local aggregate community trusts (LACTs), including operators, community representatives and councils to determine how the money is used.

The MPA cites the precedent of the landfill tax communities fund, through which landfill operators claimed tax credits of £35m in 2016/17 on landfill tax receipts of £903m. The government’s 2017 autumn budget set out a landfill tax communities fund of £33.9m in 2018/19 with a tax credit cap of 5.3% of landfill tax liability for operators.

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The aggregates levy (AGL) was introduced by the government in 2002 to encourage the use of alternative, secondary and recycled construction materials. The Treasury currently takes £2 per tonne of aggregate sold and AGL receipts have typically raised between £300m to £350m a year (£407m in 2016/17).

MPA chief executive Nigel Jackson said: “Between 2002 and 2011, hundreds of projects benefited from the aggregates levy sustainability fund. MPA holds that the decision to end the aggregates levy sustainability fund was wrong in principle given the controversies surrounding the introduction of the aggregates levy in the first place, but despite best efforts, attempts to convince DEFRA ministers of the need for its re-introduction have been fruitless.

“Undeterred, MPA has considered how the scheme could be improved, and drawn up proposals for a new funding model. Building on the substantial legacy of the aggregates levy sustainability fund, but at lower cost with a narrower and more relevant focus, I believe that the new proposals will support delivery of the government’s ‘localism’ agenda and the new 25-year plan for the environment.

“More broadly, the new aggregates levy community fund will focus on local community engagement, biodiversity and nature conservation, and could be widened out to include carbon reduction, heritage and security of supply issues at a later date.  I hope that MPs, councillors and planners in aggregate producing areas and local community and environmental organisations will get behind our proposals and encourage government to support it.”

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