Forum topic: MP slams pay of Edmonton incinerator bosses
MP slams pay of Edmonton incinerator bosses
Karl Brown
26 May 2022 14:14 6458
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Some interesting implications from the latest incinerator news picked up from this week’s PGC newsletter, “Reported elsewhere”. The relevant press article link here is in case anyone missed it https://www.guardian-series.co.uk/news/20043011.mp-slams-pay-edmonton-incinerator-bosses/?ref=twtrec . For me it raises three important points.
Firstly:
“In Parliament yesterday, the Chingford and Woodford Green MP questioned why the salary of the highest paid director at LondonEnergy Ltd (LEL) doubled to £600,000 in 2020. Sir Iain was referring to the most recently published accounts of LondonEnergy Ltd, for 2019/2020, which show the highest paid director’s salary rose from £313,687 to £619,624.” (PGC readers should note that this sum excludes pension contributions well north of £30k.)
In response, the NLWA issued a statement today calling Sir Iain “misinformed”. Their spokesperson added: “The figures quoted… are an anomaly for the financial year 2019-20, due to one managing director leaving the company and a new person taking up the role.
PGC readers can note the outgoing MD left after 11 months of the financial year, which puts his annualised package well north of £700k pa. Given that strategy is set elsewhere (by NLWA) and there is no business development or marketing need since it is a statutory body and so business necessarily comes to your door, pretty much all that remains is an operations role, for which there is an Operations Director. Just exactly what you then do for near three quarters of a million pounds pa is well worth questioning. It’s not as if the seven boroughs have surplus cash and no other budget demands.
Secondly:
NLWA also add in respect of London energy Limited that, “Board members do not share in any profits from the business, nor will they ever benefit financially from the decision around the new facility.”
A cynical read could see this wording as possibly being too cleverly-legalistic in ruling out dividend payments to such individuals and also any commission or other benefit from the actual facility decision, but nothing else, eg a salary, future fees from such as consulting, or several other possibilities.
I would certainly see no harm in councils definitively ruling out future employment by LEL of councillor board members.
Thirdly
“Three councillors, two Labour and one Conservative, sit on the LEL Board to ensure that the company provides the most effective services for residents.
The board of directors' most important function is to approve or send back for amendment management's recommendations about the future direction of the corporation. Given that the direction is set by the NLWA who’s chair, deputy chair and MD also sit on the LEL board, this task may be somewhat challenging for an independent LEL board.
Neither is it entirely clear given a boards responsibility to stakeholders, primary of whom in the case of LEL is NLWA and the seven councils, hence residents, why and how a balanced board needs to specifically include three councillors. The quote suggests that they were not recruited for specialist skills or experience or other balanced board need, but rather their position as councillors. Hence the question, which councillors are best and why. There are hundreds to choose from.
Whether a Labour / Conservative part balance was sought is also not clear but will be a challenge to maintain if so on the present basis with the loss of previously Conservative Barnet Council to Labour meaning that their two NLWA seats, which expired yesterday (25/5/22), will see two labour nominations put to the NLWA.
One of those previous NLWA representatives, Cllr Zinkin, is also a LEL board member. How that particular governance issue is to be managed will be intriguing and could signal a number of important aspects.
The loss of Cllr Zinkin, NLWA’s deputy chair, brings out the issue of succession planning I have raised previously on this site. The lengthy term of the current chairmanship is more that of a monarch rather than a typical western business chair / CEO subject to continuous improvement challenge. That does not come risk free. A 5-6 year cap on term looks entirely appropriate, as does the need for a clear succession plan.
The article indicates that the Leader of the House will take matters up with ministers on behalf of the Chingford MP.
Firstly:
“In Parliament yesterday, the Chingford and Woodford Green MP questioned why the salary of the highest paid director at LondonEnergy Ltd (LEL) doubled to £600,000 in 2020. Sir Iain was referring to the most recently published accounts of LondonEnergy Ltd, for 2019/2020, which show the highest paid director’s salary rose from £313,687 to £619,624.” (PGC readers should note that this sum excludes pension contributions well north of £30k.)
In response, the NLWA issued a statement today calling Sir Iain “misinformed”. Their spokesperson added: “The figures quoted… are an anomaly for the financial year 2019-20, due to one managing director leaving the company and a new person taking up the role.
PGC readers can note the outgoing MD left after 11 months of the financial year, which puts his annualised package well north of £700k pa. Given that strategy is set elsewhere (by NLWA) and there is no business development or marketing need since it is a statutory body and so business necessarily comes to your door, pretty much all that remains is an operations role, for which there is an Operations Director. Just exactly what you then do for near three quarters of a million pounds pa is well worth questioning. It’s not as if the seven boroughs have surplus cash and no other budget demands.
Secondly:
NLWA also add in respect of London energy Limited that, “Board members do not share in any profits from the business, nor will they ever benefit financially from the decision around the new facility.”
A cynical read could see this wording as possibly being too cleverly-legalistic in ruling out dividend payments to such individuals and also any commission or other benefit from the actual facility decision, but nothing else, eg a salary, future fees from such as consulting, or several other possibilities.
I would certainly see no harm in councils definitively ruling out future employment by LEL of councillor board members.
Thirdly
“Three councillors, two Labour and one Conservative, sit on the LEL Board to ensure that the company provides the most effective services for residents.
The board of directors' most important function is to approve or send back for amendment management's recommendations about the future direction of the corporation. Given that the direction is set by the NLWA who’s chair, deputy chair and MD also sit on the LEL board, this task may be somewhat challenging for an independent LEL board.
Neither is it entirely clear given a boards responsibility to stakeholders, primary of whom in the case of LEL is NLWA and the seven councils, hence residents, why and how a balanced board needs to specifically include three councillors. The quote suggests that they were not recruited for specialist skills or experience or other balanced board need, but rather their position as councillors. Hence the question, which councillors are best and why. There are hundreds to choose from.
Whether a Labour / Conservative part balance was sought is also not clear but will be a challenge to maintain if so on the present basis with the loss of previously Conservative Barnet Council to Labour meaning that their two NLWA seats, which expired yesterday (25/5/22), will see two labour nominations put to the NLWA.
One of those previous NLWA representatives, Cllr Zinkin, is also a LEL board member. How that particular governance issue is to be managed will be intriguing and could signal a number of important aspects.
The loss of Cllr Zinkin, NLWA’s deputy chair, brings out the issue of succession planning I have raised previously on this site. The lengthy term of the current chairmanship is more that of a monarch rather than a typical western business chair / CEO subject to continuous improvement challenge. That does not come risk free. A 5-6 year cap on term looks entirely appropriate, as does the need for a clear succession plan.
The article indicates that the Leader of the House will take matters up with ministers on behalf of the Chingford MP.
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MP slams pay of Edmonton incinerator bosses
PGC Webmaster
01 Jun 2022 23:05 6462
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As well as the valid questions about the extremely high salaries associated with the incinerator raised by Iain Duncan Smith MP and further analysed above by Karl Brown, there remain very important questions relating to the environmental and business cases for building a replacement. In response to an article in the Waltham Forest Echo by NLWA chair Clyde Loakes, which essentially amounted to "Don't bother your pretty head with these things, just get on with your knitting", last month's Echo carried two letters which are worth disseminating further.
The long game
Dear Waltham Forest Echo
The new incinerator will have a lifespan of 50 years, making it a hugely long-term investment. It is vital that we look at the arguments made by Cllr Clyde Loakes [issue #84, p5] from this perspective.
The proposed capacity of the new incinerator is 700,000 tonnes, an increase of 30%. While Cllr Loakes claims the capacity has been designed according to forecast population growth, the waste produced by the seven North London boroughs has declined in recent years. The latest figures published by NLWA show that, in 2020-2021, the area produced 570,394 tonnes of waste, down from 580,656 the previous year, continuing a downward trend that started in 2016. NLWA is also planning to increase recycling rates from the current dismal 30% to 50%, still below the 65% rate demanded by London Mayor Sadiq Khan, which will further lower the need for incineration. While Cllr Loakes insists the facility will not need to run at full capacity, it will also generate electricity and heat for local homes in the Meridian Water Development. If the NLWA successfully boosts recycling and scales back incineration, how will these residents heat their homes? As for air quality, he assures us that particulate matter produced by the incinerator will be 1,000 times lower than the World Health Organisation's safe limits. However, according to our own DEFRA, there is no safe limit for particulate matter. Cllr Loakes also promises world-class technology to limit harmful gases and particles, as well as the installation of carbon capture in 2035, but I'm sceptical if these will work as promised.
Clr Loakcs claims that, without the new incinerator, taxpayers will be hit with extra costs because we will have to rely on privately operated incinerators or landfill, but the new incinerator will cost us millions. NLWA did not consult us to find out if we are willing to pay for this expensive and unnecessary project.
Carina Millstone
Chingford resident
Sins of omission
Dear Waltham Forest Echo
In his attempt at "setting the record straight" in your March edition NLWA chair Clyde Loakes skirts around the findings from the all-party parliamentary group on air pollution that waste incinerators present a "significant health hazard". He neither mentions Waltham Forest's low recycling rates nor the fact that the NLWA's own data shows most "leftover" waste being burnt is recyclable or compostable. He also does not mention the Committee on Climate Change's view that incinerator-generated energy is "worse than coal". He omits London's projected 950,000 tonnes annual incinerator over-capacity, as worked out by Sadiq Khan's office. The fact that costs have more than doubled and don't account for future required carbon capture retrofit have escaped him.
Cllr Loakes has been the chair of the NLWA some 14 years so one would think he knows his stuff by now. Perhaps he is just so personally invested in this project, including through his role on the board at London Energy Ltd, that he prefers to dismiss expert opinion as "misconceptions" in the era of "social-media propelled misinformation". When the construction contract for the incinerator was awarded, Kate Osamor MP said that "the personal ambition of a few councillors like Loakes has superseded the public good." Go figure.
Karel Schling
Walthamstow resident
The long game
Dear Waltham Forest Echo
The new incinerator will have a lifespan of 50 years, making it a hugely long-term investment. It is vital that we look at the arguments made by Cllr Clyde Loakes [issue #84, p5] from this perspective.
The proposed capacity of the new incinerator is 700,000 tonnes, an increase of 30%. While Cllr Loakes claims the capacity has been designed according to forecast population growth, the waste produced by the seven North London boroughs has declined in recent years. The latest figures published by NLWA show that, in 2020-2021, the area produced 570,394 tonnes of waste, down from 580,656 the previous year, continuing a downward trend that started in 2016. NLWA is also planning to increase recycling rates from the current dismal 30% to 50%, still below the 65% rate demanded by London Mayor Sadiq Khan, which will further lower the need for incineration. While Cllr Loakes insists the facility will not need to run at full capacity, it will also generate electricity and heat for local homes in the Meridian Water Development. If the NLWA successfully boosts recycling and scales back incineration, how will these residents heat their homes? As for air quality, he assures us that particulate matter produced by the incinerator will be 1,000 times lower than the World Health Organisation's safe limits. However, according to our own DEFRA, there is no safe limit for particulate matter. Cllr Loakes also promises world-class technology to limit harmful gases and particles, as well as the installation of carbon capture in 2035, but I'm sceptical if these will work as promised.
Clr Loakcs claims that, without the new incinerator, taxpayers will be hit with extra costs because we will have to rely on privately operated incinerators or landfill, but the new incinerator will cost us millions. NLWA did not consult us to find out if we are willing to pay for this expensive and unnecessary project.
Carina Millstone
Chingford resident
Sins of omission
Dear Waltham Forest Echo
In his attempt at "setting the record straight" in your March edition NLWA chair Clyde Loakes skirts around the findings from the all-party parliamentary group on air pollution that waste incinerators present a "significant health hazard". He neither mentions Waltham Forest's low recycling rates nor the fact that the NLWA's own data shows most "leftover" waste being burnt is recyclable or compostable. He also does not mention the Committee on Climate Change's view that incinerator-generated energy is "worse than coal". He omits London's projected 950,000 tonnes annual incinerator over-capacity, as worked out by Sadiq Khan's office. The fact that costs have more than doubled and don't account for future required carbon capture retrofit have escaped him.
Cllr Loakes has been the chair of the NLWA some 14 years so one would think he knows his stuff by now. Perhaps he is just so personally invested in this project, including through his role on the board at London Energy Ltd, that he prefers to dismiss expert opinion as "misconceptions" in the era of "social-media propelled misinformation". When the construction contract for the incinerator was awarded, Kate Osamor MP said that "the personal ambition of a few councillors like Loakes has superseded the public good." Go figure.
Karel Schling
Walthamstow resident
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MP slams pay of Edmonton incinerator bosses
Basil Clarke
01 Jun 2022 23:52 6463
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Another recent press report on the Edmonton Incinerator:
The full report is at this link . It includes this paragraph
Which suggests to me that the minimum capacity of the incinerator means that the NLWA has a perverse incentive to minimise recycling - at a time when the future of life on Earth requires a rapid shift to a circular economy.
The NLWA - whose task is to maximise recycling - is also very downbeat about the prospects of boosting recycling from flats. They are not doing what they are being paid a fortune to do, which is scandalous!
The full report is at this link . It includes this paragraph
According to the North London Waste Authority’s (NLWA) plans, the new Edmonton incinerator would suffer from “significant technical issues” if it has less than 490,000 tonnes of waste to burn each year, only 100,000 tonnes less than north London produced in 2020/21.
Which suggests to me that the minimum capacity of the incinerator means that the NLWA has a perverse incentive to minimise recycling - at a time when the future of life on Earth requires a rapid shift to a circular economy.
The NLWA - whose task is to maximise recycling - is also very downbeat about the prospects of boosting recycling from flats. They are not doing what they are being paid a fortune to do, which is scandalous!
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