Future of the Scottish Landfill Communities Fund: consultation analysis

3. Analysis Part A – SLCF Future Considerations

Chapters 1-3 of the consultation document set out the background and current arrangements of SLfT and SLCF.

Question 1: Without substantial change, it will not be possible for the SLCF to continue operating. In your view, what would be the implications of closing the SLCF?

Number of responses: 26

Responses to this question highlighted concerns about the negative impact of losing community funding and investment, including increased inequality and disproportionate effects on rural and island communities. At a strategic level, it was noted that closing the SLCF could undermine the Scottish Government’s environmental and climate policy goals. Several respondents also called for a successor or transitional funding mechanism.

Loss of Community Funding and Local Investment

A majority of respondents (14) cited concern about the significant loss of funding for community-led projects. Respondents emphasised that the SLCF has been a crucial source of support for grassroots initiatives, especially in areas that may struggle to attract other forms of investment.

Some respondents noted that the SLCF was seen as one of the few accessible and flexible funding sources for small organisations, particularly in rural areas. Respondents who highlighted this issue suggested that its closure would exacerbate an already challenging funding environment for community organisations.

Need for a Successor or Transition Fund

Eight responses (8) advocated for a restructured or replacement scheme that aligns with current environmental and social priorities. Respondents stressed the importance of continuity to maintain momentum in community and environmental initiatives.

"We recommend a transition, not termination, towards a new or evolved fund that retains the spirit of the SLCF while reflecting today’s environmental priorities." Resource Management Association Scotland

Widening Inequality and Disproportionate Impact on Rural and Island Communities

Five responses highlighted that rural and island communities would be disproportionately affected, exacerbating existing inequalities. Respondents cited that these areas often have fewer alternative funding sources and are more reliant on SLCF support for local development and environmental stewardship. For example, one respondent noted that:

“Closing the SLCF will have a significant impact upon those communities and projects that are supported through the funding. The ease of access to the funding has seen millions distributed to support projects that benefit the environment, health and welfare, social inclusion, personal development and sporting participation as just a few examples of its impact. The benefits that the scheme has provided over the years should not only be measured in terms of the funds distributed.”

LT funding ltd.

Some respondents suggested the closure could erode trust between communities and government, particularly in disadvantaged areas where the fund has helped address inequality. The Scottish Islands Federation commented:

“Communities located near landfill sites, especially in remote or economically disadvantaged areas, benefit disproportionately from the SLCF. Removing this support could exacerbate existing inequalities and hinder local empowerment.”

Scottish Islands Federation – Marine Litter Working Group

Undermining Environmental and Climate Goals

Five respondents expressed concern that ending the SLCF would hinder progress on biodiversity, climate change, and waste reduction targets. It was noted that the fund has supported numerous projects aligned with Scotland’s environmental ambitions, and it was suggested that its closure could stall or reverse this progress.

“The SLCF is one of very few reliable and accessible sources of funding in Scotland that supports projects focused entirely on biodiversity, and its closure would remove a crucial lifeline for many projects that contribute directly to Scotland’s nature and climate targets.” RSPB Scotland

Some respondents warned that closing the SLCF would weaken the ‘polluter pays’ principle that polluters should compensate affected communities, for environmental and societal damage cause by landfill. It was argued that any weakening of this principle would undermine environmental justice.

Other Themes

Some responses commented that the consultation should have focused on other important issues surrounding SLfT, including the connection between increased SLfT rates and flytipping, and the need to consider broader SLfT policy reform.

Question 2: Are there changes that could be made to the tax credit element of the SLCF that would allow the fund to continue?

Number of responses: 23

Respondents to this question broadly supported reforming the tax credit element of the SLCF to ensure the fund’s sustainability. Key themes included increasing the diversion percentage or tax credit, potential alternative funding streams, and aligning incentives with environmental outcomes. Respondents also emphasised the need for administrative efficiency to ensure more funding goes directly to eligible projects.

Increase the diversion rate and Tax Credit Percentage to Sustain Viability

A common theme (mentioned by five respondents) was the suggestion to increase the diversion percentage, which is currently a maximum of 5.6%, that landfill operators can contribute to the SLCF. Respondents suggested that with the declining landfill tax base post-2025, a higher diversion rate would have minimal fiscal impact but could significantly enhance the viability of the SLCF.

Some respondents suggested that the SCLF should be cost neutral, in so far as

landfill operators receive 100% tax credit instead of the current 90% tax credit. However, one respondent acknowledged that increasing the tax credit should be considered against its impact on the Scottish Budget.

Broaden the Scope of Taxation to eligible waste streams

Four respondents commented that the Scottish Government should consider broader environment related taxation on, for example, energy from waste (EFW) and residual waste treatment, which in turn would allow the continuation and expansion of the fund and greater alignment with circular economy goals.

Alternative or Supplementary Funding Sources

Consultees also suggested that revenues generated from various environmental levies could be used to either supplement or replace the existing tax credit mechanism. Potential sources of funding included taxes on plastic bags, the Scottish Aggregates Tax, and revenues from Extended Producer Responsibility (EPR) schemes.

It was also noted that should the UK Government’s proposed transition to a single rate of landfill tax be introduced, this may be replicated in Scotland, which could result in increased revenues for the SLCF.

Other

Costs

Three responses called for streamlining of the administration of the SLCF, with the aim of ensuring that a greater proportion of funds reach communities. Suggestions included reducing overheads and devolving the fund to local authorities.

Question 3: Are there changes that could be made to the funding objectives element of the SLCF that would allow the fund to continue?

Number of Responses: 22 Most responses to this question broadly supported the evolution of SLCF objectives to better reflect Scotland’s climate and circular economy priorities, however there was no consensus on how this could be achieved. Certain responses advocated narrowing the fund’s scope to improve efficiency and impact, particularly by prioritising high-uptake objectives. Some respondents called for expanding eligibility beyond landfill-adjacent areas, while others proposed reducing the eligibility radius to better target affected communities. A minority preferred retaining the current objectives, citing concerns about increased demand without additional funding.

Broaden the Funding Priorities

Eight respondents advocated for changing the SLCF’s objectives in some way to better align with Scotland’s current environmental priorities. Three respondents suggested that the future focus of the SLCF should move from proximity to landfill sites to carbon reduction, biodiversity, and circular economy initiatives. A key theme from the responses was that the fund should evolve beyond its original focus to remain relevant and impactful.

“The approved purposes of the SLCF should evolve... Shifting focus to projects that demonstrably reduce carbon emissions... Encouraging circular economy initiatives such as reuse, repair, and community recycling efforts.” Resource Management Association Scotland

Prioritise Specific Objectives

Several respondents suggested that simplifying the fund’s structure, either by reducing the number of objectives or streamlining eligibility, could reduce administrative costs and help sustain the fund.

Five responses suggested narrowing the scope of eligible objectives in some way. Two suggested focusing on those with the greatest impact or uptake, particularly Objects C (public amenity) and D (biodiversity).

Two responses also suggested removing or deprioritising certain objectives, such as Object A (land remediation), which were seen as costly or less aligned with the fund’s purpose. It was suggested that Object F (services) could also be removed. It was suggested that reducing the objectives could reduce the administrative burden and improve cost-efficiency.

Conversely, four respondents stressed the importance of maintaining or even strengthening support for biodiversity projects. Object B (recycling and reuse) was seen as underfunded elsewhere and vital to Scotland’s environmental goals.

No Change to Objectives

Three respondents (mostly Approved Bodies) felt that the current objectives were broad, well-understood, and effective. These respondents expressed concern that changes could increase application volumes without increasing available funding, however, no specific changes were cited. Respondents further commented that changes would not address the core financial viability issues.

Changing Eligibility

A few responses proposed expanding eligibility to include communities affected by other waste infrastructure, such as Energy from Waste (EfW) facilities, or to allow projects across multiple sites.

One response proposed reducing the eligibility radius from 10 miles to 5 miles to better target communities most affected by landfill operations. This was framed as a way to improve community relations and reduce application volumes.

One response advocated for tying funding more directly to the local authority area where the landfill is located, ensuring that the most affected communities benefit directly.

Other Themes

A few responses highlighted the potential for the SLCF to support public education and behavioural change around recycling and environmental responsibility. This included ideas like better signage, public recycling infrastructure, and awareness campaigns.

Question 4: Are there changes that could be made to the regulation and administration element of the SLCF that would allow the fund to continue?

Number of responses: 22

Responses to this question highlighted strong support for centralising the administration of the SLCF to reduce duplication, cut costs, and improve efficiency. However, concerns were raised about the potential loss of local knowledge and community relationships fostered by current Approved Bodies. Several respondents emphasised the need to streamline application and reporting processes to improve accessibility, particularly for smaller and rural organisations. Others called for a reduction in regulatory burdens and more proportionate oversight to free up resources for community projects. Improved transparency and clearer outcome reporting were also suggested to enhance trust and demonstrate the fund’s impact.

Centralise Administration

Eight respondents proposed consolidating the administration of the SLCF under a single Scottish body. This was seen as a way to reduce duplication, cut administrative costs, and create a more consistent and efficient process. Suggestions included using existing public bodies such as SEPA or Zero Waste Scotland to manage the fund centrally.

“Consider consolidating administration under one central Scottish body… A smaller, better-targeted fund can still be efficiently and effectively administered.”

Resource Management Association Scotland

Reduce Administrative Costs and Streamline Processes

Two respondents indicated that existing public agencies with experience in grant distribution, such as NatureScot or Historic Environment Scotland, could take over the administration of the SLCF. This would reduce the need for a separate network of Approved Bodies and potentially lower administrative costs.

Some respondents expressed frustration with the complexity of the current system. They called for a more user-friendly application process, with proportionate reporting requirements and fewer bureaucratic hurdles. This would make the fund more accessible, especially for smaller organisations and those in rural areas.

“Streamlining application and reporting processes and reducing the amount of supporting documentation required… would reduce the burdens on both applicants and Approved Bodies.”

RSPB Scotland

Retention of Local Knowledge

While centralisation was widely supported, three respondents warned against the loss of the local knowledge and relationships built by current Approved Bodies. They emphasised the value of community-level insight in ensuring funds are effectively targeted and responsive to local needs.

“This would result in the loss of a huge amount of experience and local knowledge on the part of the Approved Bodies.”

Scottish Wildlife Trust

Complexity and Accessibility Issues

Some respondents, mostly from the third sector, described the fund as overly complicated and restrictive. They highlighted difficulties in understanding eligibility criteria, navigating multiple Approved Bodies, and dealing with inconsistent guidance. These barriers were seen as discouraging participation and limiting the fund’s reach.

“It’s quite complicated being managed by so many different bodies. They all encourage you to also apply to other awarding bodies but also say that only one of them can fund you at one time. That is a real challenge with limited resources.”

Circular Communities Scotland

Reduce Regulatory Burden

Respondents further suggested that the current level of regulatory oversight may be excessive and costly. Many respondents noted that the regulation works well, however, in order for the future of the SLCF to be viable, proposed reducing the frequency of audits or compliance checks and adopting a more risk-based or proportionate approach to regulation. It was suggested that this could free up more funds for community projects.

“It would make sense to decrease the level of scrutiny from annual to say every three years… effectively releasing further funding for projects due to cost savings.”

EB Scotland Limited

Transparency and Outcome Reporting

A few responses called for improved transparency in how the fund is managed and clearer reporting on the outcomes achieved. This was seen as important for demonstrating the value of the fund and building public trust.

Other Themes

One respondent proposed a review of how the fund’s base costs are calculated. They suggested that identifying efficiencies in this area, combined with a potential increase in the tax credit rate, could help sustain the fund.

Other less common responses to this question included suggestions such as devolving funding to local authorities, promoting the fund more effectively, or supporting local waste initiatives.

Question 5: Are there alternatives to a tax credit-based model which the Scottish Government should consider?

Number of Responses: 15

Responses to this question highlighted a range of views on alternatives to the current tax credit-based model. Several respondents supported a centrally managed fund to simplify administration, though concerns were raised about potential inefficiencies. Others proposed diversified funding approaches, including levies, Extended Producer liability (EPR) schemes, and Pay As you Throw (PAYT) models, to align with climate and circular economy goals. Some emphasised preserving the strengths of the existing model, particularly its community ties. There were also calls to integrate funding with broader environmental policies and shift responsibility toward businesses through polluter-pays mechanisms.

Centrally Managed Fund and Alternative Funding

Three respondents reiterated support for a centrally managed fund, potentially administered by organisations such as Zero Waste Scotland (ZWS) or SEPA. Four respondents proposed directly allocating a proportion of SLfT revenues instead of the current voluntary tax credit system that is administered by individual Approved Bodies. It was suggested that this would reduce administrative complexity. However, responses also raised concerns that a centrally managed fund would be at risk of being removed or experience bureaucratic delays, undermining its effectiveness.

Some respondents also proposed a multi-faceted approach involving alternative levies such as creating an incineration tax or hypothecating aggregates taxation to fund the SLCF.

Three respondents proposed a broader suite of funding mechanisms, including EPR schemes, PAYT models, and called for the creation of dedicated funds aligned with climate and circular economy goals. These were seen as more systemic and potentially fairer than landfill tax credits and focused on systemic change and long-term sustainability.

Additionally, one respondent suggested leveraging or expanding existing funds such as the Islands Programme, Nature Restoration Fund, Peatland ACTION, and the Islands Cost Crisis Emergency Fund, many of which intersect with circular economy priorities.

Concerns about changing systems

Three responses emphasised the value of the current tax credit-based model, particularly its ability to engage landfill operators and leverage private funding. There was concern that moving away from this model would fundamentally alter the nature of the SLCF and could disrupt long-standing relationships between waste companies and communities. It was suggested that discontinuation of the current structure may lead to the erosion of valuable community relationships and expertise built over time.

“Care must be taken not to lose the valuable experience and trusted community relationships established through existing “approved bodies”.

CIWM Scotland

“It would not be advisable to disregard the long-built relationships between waste companies and communities to the benefit of both.”

EB Scotland Limited

Creation of Alternative Funds and Funding streams

There were some calls for the creation of alternative funds or the widening of the scope of the SLCF. These included a dedicated Nature and Communities Fund to ensure continued support for biodiversity and community projects and a dedicated Island Circular Economy Fund.

Environmental and Policy Integration

Some respondents highlighted the need to integrate waste funding with broader environmental and climate policy instruments. This included aligning with the Circular Economy (Scotland) Act 2024, Just Transition funding, and regional climate strategies.

Polluter Pays and Business Accountability

A small number of responses suggested shifting the burden from taxpayers to businesses, especially those failing to support or enforce recycling. Respondents suggested that this could involve fines or levies on non-compliant businesses.

Question 6: Are there other alternative approaches not listed above that Scottish Government should consider?

Number of Responses: 15

Responses to this question highlighted a range of alternative funding approaches to replace declining landfill contributions. Suggestions included introducing a community levy on Energy-from-Waste facilities, broadening revenue through environmental taxes, and devolving funding to local authorities to improve efficiency. Respondents also proposed establishing new circular economy and reuse funds, enhancing coordination across funding streams, and promoting sustainable food waste management. These ideas reflect a strong desire to maintain community and environmental investment while aligning with Scotland’s broader climate and waste reduction goals.

Responses to this question highlighted the following alternative approaches.

Introduce a Community Levy on Energy-from-Waste (EfW) Facilities:

• A third of responses (5) proposed a levy on EfW plants, some proposed modelling the levy on the wind farm community benefit schemes.
• This levy could generate a new revenue stream to replace declining landfill contributions.
• Suggested integration into a rebranded community or environmental fund.

“A levy of £10,000 per installed MW of EfW capacity could yield £1.2–£1.5 million annually – effectively replacing declining landfill-linked contributions.” Resource Management Association Scotland

Broaden Revenue Sources through Environmental Taxes

• Proposals included introducing or redirecting environmental taxes to support community and environmental initiatives.
• Suggested taxes included:
• Plastic bag levies
• Aggregates tax
• A new waste incineration tax

Devolve Funding to Local Authorities

• Some respondents advocated for devolving funding to local authorities.
• Aimed at reducing administrative overhead and improving local impact and efficiency.

Establish a Broader Circular Economy or Reuse Fund

• Recommendations included creating a new fund with a wider remit, such as:
• A Scottish Circular Economy Fund
• A Reuse & Repair Fund
• Focus on supporting higher-priority actions in the waste hierarchy.

“Compliment the ‘Recycling Innovation Fund’ with a new and ambitious ‘Reuse & Repair Fund’ aimed at waste reduction, reuse and repair—the actions at the top of the waste hierarchy.” Circular Communities Scotland

Improve Integration and Coordination of Funding

• Calls for better coordination of funding streams.
• Suggestions included:
• Development of opportunity maps
• Integration with other local or national funding mechanisms
• Intended to deliver more coherent and strategic environmental outcomes.

Promote Sustainable Food Waste Management

• A few responses focused on reducing food waste.
• Proposed stronger regulations and incentives for:
• Supermarkets
• Restaurants
• Emphasis on waste reduction and community redistribution.