Breaking New Ground? Developing a Scottish tax to replace the UK Aggregates Levy: consultation

Chapter 5: A Sustainability Fund?

5.1 As set out above, it is intended that the devolved tax will align with our ambitions for sustainable economic growth and support our circular economy strategy and objectives. A number of funding initiatives have been, are or will be in place to support these, such as the Circular Economy Investment Fund, Scottish Landfill Communities Fund and Sustainable Communities Fund, to name just a few. More are outlined in our recent circular economy and waste route map consultations.

5.2 Set against this landscape, the Scottish Government would welcome views on the case for establishing an aggregates sustainability fund at the time that the devolved tax is introduced.

5.3 Such a fund would not be a new concept. Alongside the UK levy, an Aggregates Levy Sustainability Fund (ALSF) was introduced in 2002, funded by a proportion – some 10% – of UK levy revenues, which were retained centrally.

5.4 The initial objectives of the ALSF were to minimise demand for new aggregates, promote environmentally friendly extraction and transportation, and reduce the local effects of extraction. These were later expanded to include addressing the environmental impacts of past extraction and compensating local communities for the impacts of this.

5.5 The value of the ALSF varied but was set at £29.3m in England in 2002-03 and 2003-04. In England, funds were distributed through a range of organisations including the Countryside Agency, English Heritage, English Nature, WRAP and various innovation and research programmes.

5.6 Following a spending review the ALSF was discontinued in England in 2011. The fund was discontinued in Wales in 2017, with the Welsh Government citing difficult spending decisions against a background of competing strategic priorities.

5.7 In Scotland, the Aggregates Levy Community Environmental Renewal Scheme (CERS) ran from 2002 to 2008. Through this, the Scottish Government supported 332 environmental projects in communities across Scotland in the vicinity of existing or disused quarries, with some of these projects receiving further funding from other sources. The CERS was later replaced by the Climate Challenge Fund, which provided a comparatively higher level of resources for community initiatives.

5.8 If it were to be taken forward, operational and related aspects would be the subject of further consultation. However, at this stage the Scottish Government would welcome initial views on the case for a fund, on the type of projects it might fund and on how this might align with other circular economy and environmental funds currently in place or planned.

Questions

A21 – Do you support the introduction of a sustainability fund? Please explain your answer.

A22 – What do you think the objectives of such a fund could be?

A23 – If it were to be introduced, what model could be used to deliver such a fund?