In a recent Cardiff Council meeting, the leader of the Liberal Democrats group, Cllr Rodney Berman, raised alarm over a landfill tax dispute that could cost the local authority millions of pounds, marking it as the most significant financial crisis the council has faced in 20 years. The dispute, dating back to 2017, originated from HMRC stating that the council had undercharged companies for landfill tax relating to materials brought to its Lamby Way site. The confusion arose from changes in landfill tax rules, with the council initially facing a liability of £45 million, later negotiated down to £12 million, which increased to £16 million with interest.
Cllr Berman strongly criticised the council’s handling of the situation, calling it a tale of incompetence and secrecy. He emphasised the need for transparency and accountability by proposing an independently chaired enquiry into the dispute and urged the release of confidential documents pertaining to the issue. Cardiff Council defended its actions, stating that the dispute had been disclosed in various reports over the years.
The complexity of the dispute involved two companies – Bridgend Biomass/South Wales Wood and Neal Soils – which had differing tax rates imposed on the material they brought to the landfill site. Despite the contentious nature of the situation, Cardiff Council clarified that there was no suggestion of illegal activity, only a disagreement over categorisations and definitions.
The financial repercussions of the dispute are substantial, with Cardiff Council set to pay the full amount through capital borrowing, impacting services in the city. Opposition councillors expressed concerns about the council’s handling of the dispute, questioning the allocation of resources towards legal and accountancy fees rather than negotiations. The debate led to a proposed amendment, supported by Conservative councillors, calling for a thorough investigation into the matter.
Cllr Chris Weaver, the cabinet member for finance, stressed the importance of a comprehensive examination of the dispute while safeguarding the council’s position. He noted the involvement of Audit Wales to ensure transparency and accountability in the process. Despite facing criticism and controversy, Cardiff Council remains committed to resolving the issue and securing a favourable outcome for the taxpayers of Cardiff.