扒哥吃瓜

The notice of assessment letter sent to local authorities in January outlines:

• the total extended producer responsibility (EPR) for packaging payments PackUK anticipates making for the financial year 2026 to 2027
• when payments will be made

This guidance provides more detail on how this anticipated payment has been calculated.听

Notice of assessment letters provided in January 2026 relate to anticipated payments to be made in the financial year 2026 to 2027 only.听

The payment amount shown in your notice of assessment letter reflects what PackUK (the scheme administrator) anticipates paying to your local authority at this time, however your actual payment may still differ from this figure in some limited circumstances, including:

• in the event of a successful complaint or appeal from producers or听 local authorities
• if PackUK does not receive sufficient funds from producers

Final payment amounts will be confirmed in your quarterly grant determination letters, which your authority will receive before each scheduled payment (please refer to your notice of assessment letter for the payment schedule). 鈥�听听听

PackUK may collect updated data and improve modelling methods used to assess payments in future years. This may contribute, along with other factors, to changes in the distribution and values of future payments to听local authorities.

Two amendments have been made to the 2025 to 2026 (year 1) methodology to calculate 2026 to 2027 (year 2) payments.听听This includes a direct change for Wales only.

Firstly, a 1.93% uplift has been applied to account for the impact of inflation. This inflation adjustment is equal to the increase in the Consumer Price Index between 2025 to 2026 and 2026 to 2027 in the . Read Section 5 for further details.

Secondly, for Wales only, an adjustment in the calculation of payments to Welsh local authorities has been made. This will account for the regulatory requirement placed on Welsh local authorities to meet a minimum statutory municipal recycling rate. This approach aims to account more directly for the distinct regulatory context in which Welsh local authorities operate.

PackUK has undertaken a supplementary calculation for local authorities in Wales. This assesses the impact that complying with this regulatory requirement has on service costs.

This supplementary calculation informs an adjustment that PackUK applies to the assessment of payments to local authorities in Wales. The adjustment is made to account for the relative efficiency of services in Wales and is proportionate to the progress that local authorities in Wales have made against statutory minimum recycling rates.

Find more information about the supplementary calculation to account for statutory recycling target (Wales only) in a later section.

All other elements of the calculations remain the same as year one.

We anticipate updating this guidance on a yearly basis.

1.听Scope of payments

This section provides a description of the costs that PackUK has accounted for in determining a local authority鈥檚 payment.鈥�鈥�听

鲍苍诲别谤听听(迟丑别听EPR听for packaging regulations), PackUK (the scheme administrator) must assess听local authority听EPR听for packaging payments for 2026 to 2027, including:

1. Efficient disposal costs in total and for each packaging category - including all expenses relating to the proper disposal, recycling, or treatment of waste, ensuring it is done in an environmentally friendly and cost-effective manner. It also includes the costs of providing public information about the management of household packaging waste, including the costs associated with both the planning and the execution of any information campaigns.听
2. Waste income from the expected sale of household packaging waste for each packaging category.听
3. Net efficient disposal costs for each packaging category - this is calculated by considering the efficient disposal costs minus the expected income from the sale of household packaging waste.听听
4. Chargeable disposal costs - for the 2026 to 2027 assessment year, this will be the total net efficient disposal costs for all packaging categories.听听

Under regulation 70(6) of the听EPR听for packaging regulations, 鈥渆fficient disposal costs鈥� are disposal costs that an authority would incur providing an efficient waste management service. A relevant authority provides an efficient waste management service if the disposal costs of the authority are as low as reasonably possible, taking into account:鈥�听

• the waste management service provided by the听local authority鈥�鈥�听
• any other factors specific to that听local authority, or to the area in relation to which it exercises its waste management functions, which in the opinion of PackUK are likely to affect its disposal costs听

Efficient disposal costs include costs incurred for the:听

• collection from kerbside, communal collections, bring sites and household waste recycling centres (HWRCs), where relevant听听
• handling, sorting, treatment, and disposal of household packaging waste net of relevant income, including administration and communication costs such as the costs to the authority of providing public information about the management of household packaging waste
• planning and carrying out information campaigns听

鈥淣et efficient disposal costs鈥� means the efficient disposal costs in an assessment year, less the expected income for that year from sale of household packaging waste.鈥�听

2.听Local authority packaging cost and performance model (LAPCAP)听

Costs听local authorities听incur in the management of household packaging waste have been assessed using a model developed by Defra on behalf of the 4 UK nations. This model is called听LAPCAP.听LAPCAP听calculates the net efficient waste management costs of managing household packaging waste for each individual听local authority.鈥�听听

The legislative requirements underpinning the development of the model are set out in the听EPR听for packaging regulations. In determining net efficient disposal costs for the 2026 to 2027 assessment year,听LAPCAP听may consider:听听

• frequency, pattern and type of collections of household packaging waste in the area of that听local authority听(鈥渢he relevant area鈥�)听
• population density in the relevant area听
• type and accessibility of dwellings in the relevant area听
• levels of deprivation in the relevant area听
• 听government policies and the regulatory requirements affecting waste management to which the authority is subject听
• any other factor PackUK considers relevant to the assessment听

The full legislative requirements for the assessment of听local authority听costs, and therefore听LAPCAP, are detailed in the听EPR听for packaging regulations.

颁耻谤谤别苍迟濒测听LAPCAP听does not include costs associated with business waste, street bin waste or litter, in accordance with those regulations. 听

Find worked examples for the LAPCAP model on 扒哥吃瓜.

Payments will cover the cost of the packaging element of the waste stream for eight high-level packaging material types.

The packaging categories set out in the听EPR听for packaging regulations are:听

• 驳濒补蝉蝉听
• 补濒耻尘颈苍颈耻尘听
• 蝉迟别别濒听
• paper and card听
• 辫濒补蝉迟颈肠听
• 飞辞辞诲听
• fibre-based composite听
• other materials听

Drinks containers made from polyethylene terephthalate (PET), steel, or aluminium between 150ml to 3l in size are excluded from听EPR听for packaging disposal fees until 2028. They will be in scope from 2028 only if a Deposit Return Scheme (DRS) is not in place by that time. Packaging collected in the food and garden waste streams are also excluded.鈥� 鈥�听

The following waste streams are included in听LAPCAP:听听

• dry recyclate collected commingled or separately from kerbside, bring sites or听HWRCs听including the packaging materials listed in the听EPR听for packaging regulations听
• residual waste including the packaging materials listed in the听EPR听for packaging regulations听

If听local authorities听provide dry recyclate offtake and residual waste treatment and disposal, the net efficient disposal costs calculation will include provision for a transfer station.听听

Tipping away payments听

Tipping away payments apply when the county council, acting as the waste disposal authority (WDA), is unable to provide the district and borough councils, waste collection authorities (WCA), with a suitable location to tip waste within a reasonable distance of the boundary of their area.听听

罢丑别听LAPCAP听model excludes provision for costs related to tipping away payments. In cases where a tipping away payment is necessary, the听LAPCAP听model assumes that the听WDA听will continue to make this payment. 罢丑别听LAPCAP听model determines a听WCA鈥檚 efficient costs. If the听WCA听has to transport waste further than reasonable, this would be deemed inefficient, and a tipping away payment from the听WDA听to the听WCA听is still justified.

3.听LAPCAP听尘别迟丑辞诲辞濒辞驳测

This section describes how the model calculates the net efficient disposal costs听EPR听for packaging payment for each听local authority.鈥�鈥�听

LAPCAP听uses a combination of听local authority specific data and comparative data to calculate听EPR听for packaging payments for each听local authority听in the UK.鈥疐or example:听

• tonnes - reported in Waste Data Flow听
• comparative data - groupings based on reported cost data from a sample of听local authorities听听听听

LAPCAP鈥檚 methodology can be summarised in a simplified way听^{[footnote 1]} as follows:

Recylate collection cost + recyclate handling, sorting and transport costs - income from sales of recyclate

+

Residual collection cost + residual handling, sorting and transport costs + residual treatment and disposal + disposal overheads

= Net payment to听local authority

For WCAs and WDAs respectively disposal and collection costs are omitted where appropriate and an adjustment is made to account for recycling credits unless there is information that other local arrangements are in place.听听

More detail on how the model handles two tier authorities and recycling credits is provided in the separate sections below.鈥�鈥�听

The model is made up of 4 modules, which come together to produce output data. This output data is used in the calculation above to produce final outputs. The 4 modules are:鈥�鈥�听

• 尘别迟补诲补迟补鈥�听
• waste flow听
• gate fees听
• cost per tonne

The metadata module

This provides the听local authority听characteristics, such as:听

• 苍补尘别听
• 肠辞耻苍迟谤测听
• type of听local authority听
• rurality level听
• deprivation level听
• household numbers by property type听
• collection system for every听local authority听in the UK听

This data is used as inputs to the other modules.

The waste flow module

The waste flow module converts听local authority听reported data on movements of waste into the relevant packaging tonnages for the model. It draws on the web-based system used by UK听local authorities听for municipal waste data reporting to government. The module uses tonnage data from听听combined with packaging waste composition data from the听,听听补苍诲听听to estimate:听

• tonnages of packaging waste collected by each collection method, for example, from kerbside, bring sites and听HWRCs听听
• tonnages going to each disposal method听

Scheme type refers to the collection of the material tonnage in the following service:听

• 肠辞尘尘颈苍驳濒别诲鈥�舛寞听
• 尘耻濒迟颈-蝉迟谤别补尘鈥�舛寞听
• two stream鈥�听

Scheme type data is based on听WRAP听local authority听portal data held for 2021 to 2022. This year has been used to align with the most recent audited tonnage data set available at the outset of the听LAPCAP听model build.听听

Understanding the collection schemes used by听local authorities听is needed to accurately distribute tonnage based on scheme data.听

In November 2024,听local authorities听were given the opportunity to confirm their scheme type for the 2021 to 2022 period. Where applicable, the feedback has been incorporated to ensure consistency. Further updates will be applied for Year 2 of the听EPR听for packaging scheme.听

This module provides all inputs on tonnages and movements of waste for the model. Where composition data is not sufficiently detailed, additional sources have been used including:听

1. Data submitted by producers in the Report Packaging Data (RPD) system for 2024 鈥� there are categories in the waste composition studies that contain indeterminate small amounts of in-scope wood, 鈥榦ther鈥� and fibre-based composite packaging.听RPD听data is used to determine the appropriate proportions here based on which values lead to alignment of in-model tonnages with these producer-reported tonnages.听听
2. 罢丑别听听report for plastic is used to determine the proportion of听PET听bottles in England, Scotland, Wales and Northern Ireland that are excluded from听EPR. This is applied to the听WRAP听2017 data to split this category into in-scope and out-of-scope material. Before the implementation of听DRS, the relevant exclusion from听EPR听for packaging payments in year one and year 2 Lapplies specifically to drinks containers made from polyethylene terephthalate (PET), steel, or aluminium, ranging in size from 150ml to 3 litres. This exclusion remains in place until 2028. The waste composition study categories for steel and aluminium that is excluded on this basis are sufficiently detailed that we do not require additional data.听

The gate fees module

The Gate Fees Survey provided by WRAP gives reported gross and net gate fees for a selection of local authorities. As part of the modelling, there is a requirement to net off the income from the sale of recyclate, and to apportion costs between EPR-eligible materials. However, he Gate Fees Survey does not provide this level of granularity. The gate fees module is required to calculate the cost per tonne of disposing of each waste material at different facilities, by taking into account material values.

It does this by apportioning reported rebates per facility (i.e. gross minus net gate fees from the Gate Fees Survey) between materials and using this to calculate an in-model net gate fee per material going to each facility type. These calculated net gate fees include bulking, haulage and transfer costs. More detail on the process of calculating net gate fees is provided below. Average gate fees are used because it is not considered possible at this time to reliably model the factors influencing gate fees in different鈥� local authorities.鈥�鈥�

In future we will explore introducing more sophisticated methodologies to more accurately model the different gate fees听local authorities听pay. We also plan to adjust calculated gate fees to account for transfer and haulage costs differing between听local authorities.听

Step 1: Calculating median gross gate fees for different disposal methods听

For dry recyclate sent to听MRFs, the gate fees module calculates a median gross gate fee for each nation. This uses data from the 2022 to 2023听听for the costs of handling materials sent to听MRFs.听听

For reprocessors, re-use, exporter re-use and exporter recycling the gate fees module calculates a single median gross gate fee for each material type. It uses data听 provided by Welsh Local Government Association (WLGA) and WIDP which is then applied to all听local authorities听across the UK. All these disposal methods are assigned the same median gross gate fee for each material type due to data limitations.听听

Step 2: Accounting for income: calculating rebate values for each material going to each facility type听

This section explains how we calculate a rebate value for each material at each facility type. A single rebate value is calculated for each facility type and material type and is then applied to all听local authorities听across the UK. The rebate value is used to calculate net gate fees in the next step.听

Income from the sale of dry recycling from听MRFs, reprocessors, re-use, exporter re-use and exporter recycling is calculated by taking the difference between the median gross and median net gate fees and apportioning this rebate value across different materials. The median net gate fee in this case is the median of the reported gate fee from the same data sources mentioned above which were used to calculate the median gross date fee (WRAP听gate fee survey, WLGA and WIDP). This is different from the calculated net gate fees which the module gives out as its main output.听 鈥�听

For each facility type we use the difference between gross and net gate fees to determine a total rebate for all materials (for example, the rebate for a tonne of mixed recycling going to a MRF). We then calculate how much of this total rebate should be assigned to each material based on material prices from听听and tonnages of each material type going to each facility from the Waste Flow Module. Data from Lets Recycle are available on a month-by-month basis for several years.听 Prices from the financial year 2022 to 2023 are used to correspond to the gate fee data.听听

In summary, each听EPR听for packaging material category is assigned a per-tonne rebate value for each facility type that is then used to calculate costs for each relevant听local authority听across the UK.鈥疐or more information on this calculation please see the worked examples.听听

Calculating net gate fees using the rebate values听听

Net gate fees for each material for each facility type, and in each nation for听MRFs听(for example, plastic going to听MRFs听in Scotland or glass going to reprocessor anywhere in the UK) are calculated by taking the median gross gate fee for that facility type and subtracting the relevant rebate value (in this case rebate of plastic going to MRF in Scotland, rebate of glass going to reprocessor).听

Disposal costs for each听local authority听is then determined by multiplying the calculated net gate fees by material tonnages going to each facility from the Waste Flow Module.听

For residual waste sent to all facility types, (such as energy from waste, mechanical biological treatment, landfill) the gate fee module calculates a median net gate fee for each facility type directly from the听WRAP听Gate Fee Survey. This median net gate is then multiplied by the material tonnages going to each facility from the Waste Flow module to determine disposal cost. This means that in practice (and in terms of impact on base fees) costs and any income from these facilities is just apportioned evenly across materials according to tonnage. Please refer to the worked examples annex for a detailed breakdown of how this is calculated.听

Differences in cost per tonne figures between different听local authorities听can be driven by differences in assumed waste composition going to each disposal method and the varying income from material sales based on these differences.听听

Although national compositions are used, we do make individual adjustments, for example where we know materials are collected separately. This can have an impact on cost per tonne figures for some disposal methods, including听MRFs. For more information, please refer to the worked examples document.听

An addition is made to all MRF gate fees (for sorting commingled streams and separately collected materials) to cover the additional cost of compliance with the following:听

• 听
• 听
• 听

The additional payment relates to the day-to-day operational costs as estimated in the听EPR听for packaging impact assessment and increases to regulator fees.听

Overhead costs听

All听local authorities听are paid the same per household overhead costs. These costs reflect the administration, contract management and other听local authority听costs of managing waste disposal functions and听HWRCs. Local communication campaign costs are also included.听

Overheads are calculated on a per household basis and on the average cost per tonne per household. Data on household numbers comes from 2021 data from the听听() and听听(). We calculate a single per household cost using the data from the Request for Information (RFI) then multiply by the听ONS听and SNR household number estimates to get total overheads for each听local authority.鈥� 罢丑别听RFI听is a survey sent to听local authorities听to request information on the collection of up-to-date actual cost data of waste collection and disposal services, where relevant for the use of听LAPCAP.听

Overheads per tonne can differ between听local authorities听due to the differences in the number of tonnes collected per household. If the average household in one听local authority听generates more waste than the average household in another听local authority, the overhead per tonne will differ.听

Overhead costs are not included in gate fees for听HWRCs听and treatment and disposal such as landfill, incineration, and energy from waste (EfW)^{[footnote 2]}听so are added to reflect the full听local authority听cost of managing waste disposal functions.听

Private finance initiative (PFI) contracts听

PFI contracts involve听local authorities听transferring the responsibility of financing and managing waste infrastructure, such as waste transfer stations, recycling centres, and EFW plants to private companies.听Local authorities听pay the private companies based on the performance and of the services provided over the contract period.听听听

Where听local authorities听with PFI contracts responded to听WRAP鈥檚 Gate Fee survey, their data has been incorporated in the model. Therefore, these costs are reflected in the overall average figures used in the analysis. Data held by Defra and the Waste Infrastructure Delivery Programme (WIDP) relating to Mechanical Biological Treatment (MBT) gate fees has been included in gate fee costs.听听

Flexible Plastic Fund (FPF) FlexCollect Scheme听

FlexCollect is a pilot project to test and refine methods for collecting and recycling flexible plastic packaging at the household level.听听

For those听local authorities听known to be running a formal plastic film pilot as part of the FlexCollect UK scheme an additional payment has been made to cover the reported cost of operating the pilot in 2025 to 2026. 罢丑别听LAPCAP听model outputs calculate听local authorities鈥� FlexCollect payment, this is included in the notice of assessment letter.

The cost per tonne module

The cost per tonne module calculates the efficient costs of collecting packaging waste for all听local authorities听from:听

• recyclate and residual kerbside collections听
• bring sites听
• HWRCs听

This module groups听local authorities听to calculate cost per tonne figures for waste that is collected from each of these sources, reflecting the fact that collection costs vary depending on a听local authority鈥檚听characteristics. The costs include:听

• front-line staff听听
• vehicles (running costs, maintenance, fuel and annualised capital expenditure)听
• containers provided to householders (annual replacement and annualised capital expenditure)听
• overheads including management, admin, equipment, IT, local communication campaigns.鈥�听
• capital expenditure, which is reflected in the cost-per-tonne values. It is annualised - for example, if a local authority听buys a vehicle with a five-year life expectancy, we attribute one fifth of the costs per year. 听

Cost per tonne figures for kerbside recyclate and residual collection are determined by using a grouping method. The grouping method creates 10 groups of听local authorities听for residual collections and 10 groups for recycling collections. To create these groups, reported cost data^{[footnote 3]}听from a sample of 49听local authorities from across the UK plus actual cost data from Welsh听local authorities, provided by the WLGA, analysed to identify the common characteristics which most strongly influence these collection costs. These characteristics are listed in the听local authority groupings (residual and recycling) section of the guidance and examples of how this works can be viewed in the worked examples annex.听

To group听local authorities听expected to incur comparable costs per tonne of waste collected, the model uses:听

• findings from this analysis听
• legal requirements on the factors we must consider听
• data on听local authority听characteristics from the metadata module听

Calculating a cost per tonne听

LAPCAP听groups听the local authorities听according to their characteristics to create:听

• 10 groups of听local authorities听for recycling collections听听
• 10 groups of听local authorities听for residual collections 听听

More information on these is in the section听local authority听groupings (residual and recycling). The average cost per tonne for sampled听local authorities听in each group is used to determine cost per tonne figures for every group. 听

HWRC costs have been based on听 data provided by our sample WDAs plus the unitary authorities in the听RFI听sample. Our ambition is to obtain a wider sample in the future.听听听

Due to limited听RFI听cost data available for HWRC and bring sites听LAPCAP听uses a method where the overall average cost per tonne across all听local authorities听is applied.

4.听Local authority听groupings (residual and recycling)

The factors used to group听local authorities^{[footnote 4]}听for kerbside recyclate collections are:听

• collection frequency 鈥� for example every week, fortnightly, 3-weekly听
• rurality (% urban) - rurality % based on highly rural, rural and urban听听
• proportion of flats percentage of housing units in each area that are flats compared to other residential properties based on the 2021听ONS听census and National Records for Scotland estimates听听
• deprivation - proportion of indices of deprivation (IMD) band D and E, lower layer super output areas (LSOA) in the authority听
• UK 肠辞耻苍迟谤测听 听
• tonnes collected per household - calculated by听LAPCAP听to help determine听local authority听waste collection groupings as the tonnes collected from the kerbside as dry recycling or residual waste听
• collection scheme proportion 鈥� the proportion of households served by each specific waste collection scheme for commingled, multi-stream and two-stream听
• food collection flag 鈥� a binary indicator, set to 1 if a听local authority听has reported collecting waste through a dedicated food waste collection stream, and 0 otherwise听听听

For kerbside residual collections this module uses the following factors to group听local authorities. The same definitions apply to these factors as above:听

• collection frequency鈥�听
• rurality (% urban)鈥�听
• proportion of flats鈥�听
• deprivation鈥�听
• country鈥�听
• tonnes collected per household鈥�听
• garden collection flag 鈥� a binary indicator, set to 1 if a听local authority听has reported collecting waste through a dedicated garden waste collection stream, and 0 otherwise听
• bring site flag 鈥� a binary indicator, set to 1 if a听local authority听has reported collecting waste through bring sites, and 0 otherwise听

Authorities are grouped by finding their closest comparators for each of these variables.听Local authrities听are placed in groups with others听that share the most similarities across the factors ^{[footnote 5]}. 鈥�鈥�鈥�听

All local authorities within a group are allocated the same cost per tonne calculated from an average of the RFIs in each group. Differences in cost per tonne figures within a group can be caused by differences in assumed waste composition听- this is calculated on an individual local authority basis. For example, if a local authority is known to have a separate glass collection, a separate calculation is performed based on tonnage reported for that one component.

Rurality and Deprivation听

Local authorities听are assigned to a rurality deprivation group, a dry recycling group and a residual group. The cost per tonne for each stream is based on the group the听local authority听is in. More information on this is provided in the听local authority听groupings section.听

Household numbers听听

Household numbers are used in 2 ways in the model:鈥�听

• to determine overheads听听
• to group听local authorities听for collection costs听

Data on numbers of households is from the:听

• 听for England and Wales听
• 听for Scotland听听
• 听for Northern Ireland听

These datasets will be kept under review to ensure听LAPCAP听includes the best possible data.听听

To determine overheads, the cost per household comes from the RFIs supplied by听local authorities听with disposal functions, for example Unitary authorities and WDAs. These overheads also include the costs for managing听HWRCs听and bring sites. Cost per household is then multiplied by numbers of households in each听local authority. 听

When grouping听local authorities听for collection costs, 3 factors use household data:听

1. Proportion of flats which uses听2021 council stock data for England.听
2. Proportion of communal collections which use听听regarding the number of households served.
3. Tonnes per household which uses听听regarding the number of households served.

Although household data comes from different sources, this data is the most consistent and best available data.听听

Due to the difference in cost drivers between dry recycling and residual waste, a single听local authority听can be in one group for its dry recycling collections and bring sites and another group for residual and听HWRCs.听

Statutory joint waste disposal authorities (SJWDAs) and county councils

SJWDAs and county councils don鈥檛 appear in听local authority听groupings because these groupings are only used to determine collection costs. We do not currently have an equivalent grouping method for disposal costs due to the variety of different factors that drive these costs and limited data on these factors.鈥� 鈥�

Changes to groupings in future years听

Collection cost groupings are something that we plan to recalculate each year of听EPR听for packaging. For example, if a听local authority鈥檚 grouping characteristics change from year 1, this could mean the听local authority听moves groups when groupings are recalculated.听

Due to the nature of the analysis, changes in the characteristics of some听local authorities听could affect the grouping of others, even if those authorities鈥� characteristics have not changed themselves. The cost per tonne for each stream is based on the relevant group the听local authority听is in.听

A table showing the groups that each听local authority听is in is provided in Annex B.

5.听Bringing it all together 鈥� calculating the provisional output听

Several functions combine the outputs of the 4 modules to produce the provisional outputs. For instance, gate fees are combined with disposal tonnages to calculate disposal costs. These costs are then provided as outputs split by various factors, including waste stream, packaging category and听local authority.

More information on this can be found in the worked examples annex but the following figure and explanatory text provide a summary^{[footnote 6]} of how outputs from the 4 modules come together:

Recylate collection cost + recyclate handling, sorting and transport costs - income from sales of recyclate

+

Residual collection cost + residual handling, sorting and transport costs + residual treatment and disposal + disposal overheads

= Net payment to听local authority

The cost per tonne module gives estimated kerbside, HWRC and bring site collection costs per tonne of residual and recycling waste for each听local authority. These outputs are then combined with tonnages from the waste flow module to calculate the:听

• dry recycling kerbside collection cost听
• residual kerbside collection cost听
• HWRC collection cost and bring site collection cost听

This is done for each packaging category material and for the total collection costs across all household packaging waste.听

For dry recycling kerbside collection costs, the impact that volume has on collection costs is taken into account.听听

This is done in the following way:听

1. Multiplying the cost per tonne figure (provided by the cost per tonne module) by the total tonnage each听local authority听manages in dry recycling kerbside collections.听听
2. This calculates the total cost of collecting dry recyclate (packaging and all other waste).听听
3. This total cost is then apportioned across materials based on the proportion of each material by volume.听听
4. The estimated volume of each material in the dry recycling stream is calculated through the tonnage and a corresponding bulk density value (data provided by听WRAP听and supported by the data collected in the Bulk Density Factors Desk Review 2022). More information on this can be found in Annex C.听
5. Volume apportionment is applied across all materials (both in scope and out of scope) as all materials are collected from the same collection vehicles.听

Please refer to the worked examples for more detail.

Therefore, the calculated volume of out-of-scope materials directly affects the cost apportionment of听EPR听for packaging materials. For example, if a given听local authority听collects a large amount of low-density non-packaging in their dry recycling stream, this will mean a lower proportion of collection costs are allocated to higher-density packaging materials. This adjustment recognises that volume is commonly the limiting factor in dry recycling collections.听听

Dry recycling composition varies between听local authorities听due to various factors, such as:听

• type of recycling collection scheme听
• what materials are recycled听
• demographic听

The data we use comes from Waste Data Flow therefore the information provided impacts varying factors. This can mean that the subsequent collection cost per tonne for kerbside dry recycling can vary even for听local authorities听within the same group.听听

Costs are inflated to the desired year using the Office for Budget Responsibility (OBR) Retail Prices Index (RPI) inflation forecasts.听

Residual handling, sorting, and transport costs and residual treatment and disposal costs are calculated using the:听

• national UK average net gate fees for the different disposal methods from the gate fees module听听
• tonnages for each packaging category material from the waste flow module听

The handling, sorting and transport net of income of dry recyclate is calculated using the gross gate fee^{[footnote 7]}听and material specific rebate^{[footnote 8]}听taken from the Gate Fee Module as a cost per tonne. This is multiplied by the tonnage for each packaging category taken from the Waste Flow Module. The gross cost and adjustment for income is shown in your notice of assessment letter.听

Disposal overheads have been determined by multiplying the average disposal overhead costs per household (taken from the local authorities who returned RFIs, including disposal overheads costs) by the numbers of households in each听local authority. 鈥�听听

These overhead costs reflect the administration, contract management and other听local authority听costs of managing waste disposal functions.听听

Data on the number of households is from the:听

• 听for England and Wales听听
• 听estimates from 2021 for Scotland听
• 听for Northern Ireland

6. Use of inflation indexes听

For year one of EPR for packaging, the Retail Prices Index (RPI) from the Office for Budget Responsibility (OBR) has been used to:听听

• deflate disposal cost data (WLGA data, Gate Fees survey and material pricing) from 2022 to 2023 to 2021 to 2022 so they are in line with the year cost data were collected from local authorities听
• inflate all 拢 per tonne costs from 2021 to 2022 to 2025 to 2026 (year one of EPR for packaging).听听听

For year 2 of EPR for packaging, the year 1 model was not updated further. A further adjustment was then applied to individual and total net local authority costs from 2025 to 2026 to 2026 to 2027 prices using the Consumer Prices Index (CPI) from the OBR.听听听

RPI has been used within the model as it is commonly used to update contracts prices between local authorities and waste management companies. CPI has been applied to the local authority net costs calculated from the model as this index is commonly used across Government, including for inflation targets.

7.听Allocation of costs across two tier authorities (England only)鈥�听

Costs for different household packaging waste management services are allocated in the model across two tier authorities according to the table below. This follows relevant legislation which assign responsibility for delivery of these services.

Table of costs for different packaging waste management services are allocated in the model across two tier authorities

Local authority听cost	Unitary	WCA	WDA	Statutory joint waste partnership听WCA	Statutory joint waste partnership听WDA
Collection of dry recycling from kerbside	Yes	Yes	No	Yes	No
Collection of residual waste from kerbside	Yes	Yes	No	Yes	No
Bring sites	Yes	Yes	No	Yes	No
Collection of dry recycling from HWRC	Yes	No	Yes	No	Yes
Collection of residual from HWRC	Yes	No	Yes	No	Yes
Transfer stations/bulking and haulage of recyclate	Yes	No	Yes	No	Yes
Transfer stations/bulking and haulage of residual	Yes	No	Yes	No	Yes
Tipping away payment	n/a	No	No	No	No
Handing and sorting of recyclate	Yes	No听(unless we have information that the听WCA听has taken responsibility)	Yes听(unless we have information that the听WCA听has taken responsibility)	No	Yes
Income from recyclate netted off	Yes	No听(unless we have information that the听WCA听has taken responsibility)	Yes听(unless we have information that the听WCA听has taken responsibility)	No	Yes
Treatment and disposal of residual waste	Yes	No	Yes	No	Yes
Recycling credit	n/a	No 听(Value of credit payment to听WDA听netted off total听WCA听payment)	Yes听(Where known to pay credits to听WCA)	No	No
Other interauthority payment for waste	n/a	No	No	No	No

8.听Adjustments for recycling credits鈥�(England only)听听

The Environmental Protection Act 1990 requires WDAs to pay waste recycling credit payments to a WCAs in its area when the听WCA听retains waste for recycling.鈥�听

The scheme seeks to ensure that any savings from the reduced waste disposal costs for a听WDA听(when waste is recycled) are shared with the relevant听WCA, and in so doing incentivise recycling for WCAs.鈥�听

Unless otherwise agreed^{[footnote 9]}, WDAs are obliged to pay recycling credits where claimed by the听WCA.听 罢丑别听WDA听must pay the听WCA听its net saving of expenditure.听 Where this value is not known the听听^{[footnote 10]}听provide a default value with a 3% indexation.鈥�鈥�鈥�鈥�听

A payment of a recycling credit by a听WDA听falls under the definition of 鈥渄isposal costs鈥� for the purposes of听EPR听for packaging and has therefore been included in the assessments of costs. It is also important that producers are not double charged for waste management activities.鈥� If a听WDA听receives the disposal costs from PackUK to account for the recycling credits paid to the听WCA, the听WCA听cannot claim the cost of recycling that material as part of its own disposal costs.鈥�听

Based on the above,听LAPCAP:鈥�听

• pays WDAs to cover the cost of recycling credits for household packaging waste where the听WDA听is known to pay their WCAs inter-authority payments relating to recycling.鈥�鈥�听
• pays no recycling credits to WDAs and Statutory Joint Waste Disposal Authorities where it is known that no recycling credits or similar arrangements are in place鈥�鈥�鈥�鈥�听

If recycling credits are paid to a听WDA听this has been calculated using the method set out in听听(using the default payment values set out in the Schedule to the Regulations).鈥�鈥�听

Contact PackUK if you have been allocated a payment for recycling credits, or if one is netted off your payment, and you either:听

• have no arrangements for paying or receiving a credit but have an adjustment in your notice of assessment letter听
• pay recycling credits and don鈥檛 have an adjustment in your notice of assessment letter.听 听

Adjustments for recycling credits will not apply for Statutory Joint Waste Disposal Authorities and Statutory Joint Waste Collection Authorities.鈥�听

Calculating recycling credits听

Recycling credits are paid for every tonne of household packaging waste collected in the dry recycling scheme. For an example of how recycling credits are calculated in the model please refer to the worked example annex.

9. Supplementary calculation to account for statutory recycling target (Wales only)

The supplementary calculation for local authorities in Wales for year 2 uses:

• cost data (net of income) reported to the WLGA in 2023/24 for all local authorities in Wales
• 2023 to 2024 data on municipal recycling rates

A calculation is then made to determine efficient costs in proportion to progress made against the statutory minimum recycling rate. This comparative figure is used to inform an adjustment to the calculation made through the LAPCAP model, to calculate the net efficient disposal costs.

The assumption behind this supplementary calculation is that for local authorities that have met the statutory target, the cost of providing that compliant service (as estimated by cost data provided to the WLGA) is reflective of an efficient service cost, which is necessary to deliver the required outcome.

This adjustment is calculated as follows.

1. The total amount payable to all local authorities in Wales is calculated, using the methodology in LAPCAP.
2. Calculate the difference between the 70% statutory requirement and each local authority鈥檚 recycling rate.
3. For local authorities that have met the statutory target recycling rate (70%), efficient disposal costs are assumed to be equal to the cost data provided to WLGA (after adjusting for inflation).
4. Calculate the sum of payments allocated to all local authorities achieving their statutory recycling target, to determine the remaining amount of funding (鈥渇unding shortfall鈥�) that can be distributed amongst those local authorities not achieving their statutory recycling target.
5. For local authorities that have not met the statutory target recycling rate (70%), payments are calculated as their WLGA costs minus a share of the funding shortfall. This, is proportional to both their original WLGA estimate and their shortfall in actual municipal recycling rate in 2023 to 2024 when compared to the statutory target.
6. The revised payment total for each local authority in Wales is then compared to the total provisionally calculated in LAPCAP. This is to determine a percentage adjustment to be made.
7. The percentage adjustment is made to the subtotal calculated through LAPCAP for collection costs, disposal costs, and material income. These totals are then used to calculate the net efficient disposal costs in order to give the total payment amount.

Please refer to the worked examples annex for more detail.

10.听Sampled听local authority听cost data - data collection

In 2023, Defra (supported by 4 contractors) contacted 110听local authorities听to request comprehensive cost information regarding their waste services so that this data could contribute to the build of the听LAPCAP听model for year one.听

To ensure as wide and diverse a range as possible, all UK waste collection听local authorities听were put into one of ten socio-demographic groupings. Additionally, they were further separated based on their dry recycling system and the frequency of their residual collections, creating a total of sixty-seven sub-groups for sampling. The table in Annex E displays the number of听local authorities听in each group.鈥�鈥�鈥�听

Representative (鈥榬equest for information鈥�)听RFI听samples were selected from across the groups. Where a local authority听could not provide data, an alternative similar听LA听was approached instead.听听

All data that was collected and provided was quality assured to ensure accuracy and relevance to the model.鈥�鈥�听

This process generated 52听local authority听datasets of suitable quality to use in the model. Of these RFIs:

• 40 are from England听
• 2 from Northern Ireland听
• 5 from Scotland听
• 5 from Wales听
• 19 from WCAs听
• 28 from Unitary Authorities听
• 5 from WDAs

The following list shows local authorities that provided听RFI听data:鈥�鈥�听

• Armagh Banbridge Craigavon
• Basingstoke
• Blackburn
• Belfast
• Calderdale
• Cheltenham
• Conway
• Cornwall
• Derbyshire
• Dover
• Dudley
• East Hertfordshire
• East Renfrewshire
• East Riding
• Edinburgh
• Fareham
• Hackney
• Haringey
• Harrogate
• Huntingdon
• Isle of Scilly
• Isle of Wight
• Kirklees
• Leeds
• Maldon
• Neath Port Talbot
• Newham
• Newcastle Upon Tyne
• Norfolk
• North Ayrshire
• North East Lincolnshire
• North West Leicestershire
• North Yorkshire
• Plymouth
• Powys
• Oldham
• Orkney
• Oxfordshire
• Pembrokeshire
• Redcar and Cleveland
• Rhondda Cynon Taf
• Rotherham
• Sevenoaks
• South Ayrshire
• Stockton-on-Tees
• Surrey
• Thurrock
• Wandsworth
• Westminster
• Worthing
• Wyre

In addition, cost data was provided to the WLGA from all 22 local authorities in Wales. This is based on 2023 to 2024 cost data and adjusted for inflation to 2026 to 2027.

11.听Model quality assurance

There are robust processes in place for quality assuring (QA)听LAPCAP. This has included close working with the Government Actuary鈥檚 Department (GAD) to help develop our overall QA process and undertake model verification.鈥�鈥疉ll outputs were checked against the听local authority听sample data as well as other data sets such as RO5^{[footnote 11]}听and data held by the Welsh government.鈥�鈥�听

GAD听has completed an initial independent verification review of the model which focused on whether implemented calculations:听

• are consistent with the documented methodology听
• are free from error听
• use a logical structure听
• adhere to best practice

The review included the following elements:鈥�听

1. Testing of the model code and underlying functions.听
2. Input and output testing 鈥� inputs and outputs have both been provided by Defra, and these have been run through the model to test reproducibility of the results. A detailed code review 鈥� all areas of the model that are in scope have been examined thoroughly as part of a 鈥渓ine by line鈥� review. This is intended to identify whether the code meets the specification, is free from error, uses a logical structure, is commented appropriately, and adheres to best practice.鈥�鈥�听
3. Independent testing 鈥� generating outputs from a completely independent model can provide assurance on the fitness for purpose of the model under review. Results for similar scenarios would be expected to agree within a tolerance based on appropriate judgement.鈥�听
4. Assessing suitability of model documentation for understanding model implementation.鈥�听

GAD鈥檚 findings, based on the scope of听GAD鈥檚 review, show:听

• the model runs without error听
• results are reproduceable听
• they were able to test and independently replicate results听

The findings also show room for improvements in our QA process. We have acted upon this feedback and听GAD听have indicated that since then our QA processes have improved substantially. We have further implemented retro-active QA through regression testing on earlier versions of the model.听

GAD鈥檚 verification review is based on the model at a point in time and did not cover all aspects of the model.听听

GAD鈥檚 role in verifying the model is not to provide sign off that the model is fully quality assured and fit for purpose, the responsibility for this sits with PackUK.

12.听Future updates鈥�听

We will shortly be publishing a roadmap which will outline future improvements to the model after year 2.

13.听Efficiency and effectiveness鈥�听

Under the听EPR听for packaging regulations an authority provides an efficient waste management service if the costs of this service are as low as reasonably possible, taking into account:鈥�鈥�听

• the waste management service provided by the authority听
• any other factor specific to that authority, or to the area to which it exercises its waste management functions, which in the opinion of PackUK are likely to affect its disposal costs鈥�听

Using data received through RFIs and other data sources听local authorities听can be grouped according to similarity of both service provision and local characteristics. PackUK is able to estimate, through averages, what level of expenditure is reasonable for听local authorities听in those groups to provide a waste management service for household packaging. 听

This metric is deemed the lowest reasonable cost for that group. 听

In Wales, the assessment of net efficient disposal costs also accounts for the impact of meeting the statutory minimum recycling target as further factor. This adjustment seeks to account for the extent to which service costs are optimised to support the attainment of the statutory target.

Effectiveness assessments will not be held in the first year of听EPR听for packaging.鈥�听听

Regulation 73 of the听EPR听for packaging regulations also requires PackUK to carry out its assessments in such a way as to incentivise good environmental outcomes.听

By having tonnage-based fees, it incentivises producers to reduce the weight of packaging they put on the market. By not applying a second charge to reused packaging, the system encourages reuse, which helps reduce the amount of packaging that ends up as waste. By netting off an average material value in the听LAPCAP听calculations, the system rewards higher-quality materials that are more valuable as recyclate. 听

14.听Modulation鈥�鈥�听

Disposal fees paid by producers (but not听local authority听payments) may change as a result of modulation coming into effect in year 2 of听EPR听for packaging (2026 to 2027) which will further incentivise sustainable packaging decisions and drive recycling rates. The types of packaging which will be subject to higher or lower modulated household packaging waste disposal fees will be based on recyclability assessments in line with the recently published听Recyclability Assessment Methodology (RAM).

The details of the modulation approach are subject to further design and industry engagement. Changes to disposal fees as a result of modulation will not impact the amount paid to听LAs. 鈥�听

15.听Complaints and appeals鈥�听

Complaints鈥�听

If you have a complaint about the way we operate or the services we provide, please follow听PackUK鈥檚 complaints procedure.听听

Appeals鈥�听

We understand that there may be an occasion where you wish to appeal against a decision that was made by PackUK. Before you can appeal, you must have first brought a complaint under听PackUK鈥檚 complaints procedure.

If new information or data becomes available relating to your original complaint you may ask for a reconsideration.鈥�听

Check PackUK鈥檚 appeals procedure for more details on听how to make an appeal.