Aggregates Levy Blow to Local Communities in Wales

The decision of the Welsh Government to close the Aggregates Levy Fund (ALF) has been greeted with regret by MPA Wales, and marks the end of community and environmental benefits associated with the Levy across the UK. When the Levy was introduced in 2002 it was intended* that around 10% pa of Levy revenue would be spent on a variety of community and environmental projects as a means to deliver environmental improvement across the sector, and reflect the local impacts of mineral extraction. The Welsh ALF had invested £20m into community and environmental projects within quarrying communities over the last 15 years and has helped build strong and lasting relationships between the industry and local people.

The Levy itself is a tax raising measure which has no proven direct environmental benefits: companies pay £2 per tonne of aggregates sold regardless of their environmental impact or performance. The ALF was set up to use revenues from the Levy for positive environmental and community purposes and any suggestion that the Aggregates Levy was an “environmental” tax is negated, it is now just about revenue raising.

Defra announced the end of the English equivalent, the Aggregate Levy Sustainability Fund (ALSF) in England in 2011 and the Welsh Government has until now been the only devolved administration which had maintained a Levy Fund. The UK Government receives c£350 million of Aggregates Levy pa and, following the announcement by Lesley Griffiths AM, Cabinet Secretary for Environment and Rural Affairs, that a budget for the Welsh programme will not be carried forward into 2017, none of this revenue will now be available for use by communities in quarrying areas and for environmental projects. MPA has consistently supported the operation of the ALF as a means to support the delivery of local community benefits and environmental improvements associated with the minerals sector. Following the scrapping of the English scheme in 2011, MPA has called for the introduction of a smaller scale scheme which could still bring significant public benefits, but this proposal has so far been rejected by Government.

Nick Horsley, MPA Director Wales, commented “The decision of the Welsh Government is extremely disappointing for mineral operators. The ALF has been an integral part of the Aggregates Levy scheme and was a way for a small proportion of the revenue raised by the Levy to bring real benefit to local communities in quarrying areas. As the minerals sector is one of the last remaining heavy industries in Wales, the end of the Fund removes a positive mechanism that built dialogue and joint working between industry and local people which helped to raise awareness of the contribution the industry makes to the economy.”