With the Six Nations underway and the clash between the auld enemies promising the usual blood and thunder on Saturday, it’s very topical to talk about hospital passes.
But you could argue that the one given to PackUK by the government to run its controversial extended producer responsibility (EPR) packaging tax will make anything we are likely to see on the pitch at Murrayfield on Saturday seem mild by comparison.
Earlier today, hundreds of food and packaging industry bosses gathered in Birmingham for the Packaging Innovations Conference, with just one topic on their minds.
Anger over the chaos surrounding the packaging tax has reached new levels since the organisation’s shock admission that a major shortfall in money raised for year-end invoices may force it to reissue bills, hitting producers with demands for higher payments.
None of us like surprises
“None of us like surprises”, was the unfortunate phrase used by PackUK’s strategy director Esther Carter, who had clearly drawn the short straw in being sent out to explain the reason for the almighty cock-up.
The sad fact is the fiasco isn’t really a surprise at all. Instead, it’s the predictable result of a series of inbuilt weaknesses in the government’s funding platform for EPR, all of which should have been spotted much earlier. Thousands of companies now face massive uncertainty over their financial budgets, at a time when they can least afford it.
At the heart of the issue is the revelation that PackUK – Defra’s arm’s-length body running the scheme – has been inundated with far more appeals against October’s first round of EPR invoices than it had initially expected.
The subsequent shortfall in funds which were meant to support local authority recycling has left the body facing the humiliating prospect of either asking producers for more money or going “cap in hand” to ask the government to bail out the scheme.
As Carter told the audience today: “What has not always been clear to people is that PackUK is required to balance the books at the end of each year.”
But thanks to the massive shortfall in payments, it now has to do that by going back to companies for whom EPR is already a huge burden, to ask for even more money.
Disasters don’t come much bigger than this. Serious questions have to be asked (and answered) about how this situation was not foreseen much earlier.
One source says: “When you’re talking about £1.4bn in the first year, you don’t have to be much out for it to be a disaster. It’s like navigating your ship one degree off course. We know that doesn’t often end well.”
It’s highly unlikely that Carter’s word on this will be the last, as anger among companies and trade bodies continues to grow over this latest EPR controversy. We will also have to see whether companies really should expect to listen out for the thump of new invoices landing on their mats.
For the well-intentioned bosses running the packaging tax, there are more testing days ahead.
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