Future of the Scottish Landfill Communities Fund: consultattion

1. Executive Summary

1.1 Background

Scottish Landfill Tax (SLfT) is a devolved tax on the disposal of waste to landfill which has been in place since 2015. It underpins the Scottish Government’s efforts to find economical alternatives to landfill that will minimise waste and help to create a more circular economy.

By making landfill a relatively expensive option, SLfT encourages the prevention, reuse and recycling of waste and helps keep valuable resources circulating in the Scottish economy.

The Scottish Landfill Communities Fund (SLCF) was introduced alongside SLfT, modelled on the then Landfill Communities Fund previously operating across the UK. This fund provides funding for community or environmental projects in recognition of the dis-amenity of landfill activity.

The continued reduction in landfilled waste in Scotland means that SLfT revenue is declining. The Scottish Environment Protection Agency (SEPA) reported that two million tonnes of waste was landfilled in 2023, a reduction from 4.2 million tonnes when SLfT was introduced in 2015. As a result, SLfT revenues have declined from £149 million in 2015-16 to £68 million in 2023-24. This long-term trend of decreasing SLfT revenues reflects the success of efforts to encourage diversion of waste from landfill, driven by the SLfT and the introduction of the ban on the landfilling of biodegradable municipal waste from the end of 2025.

However, as SLfT revenues are directly linked to the SLCF funding, when revenues decline contributions to the SLCF also reduce. Contributions to the fund have more than halved since 2015 and the Scottish Fiscal Commission (SFC) forecast that contributions will drop to around £1.4 million in 2026-27.

The arrangements for the operation and administration of the SLCF are set out in legislation. The associated costs of administering the fund in future years will breach the legally permitted limits, as a result of the declining contributions. This leaves the SLCF operationally unviable from 2026-27 onwards.

This consultation seeks views to inform decision making on the future of the SLCF from April 2026 onwards.

1.2 Purpose

This consultation seeks your views on the future of the SLCF, given the forecast decrease in waste disposed of at landfill sites because of Scotland’s transition to a more circular economy. The information gathered via the consultation and subsequent analysis will inform decisions about the future of the fund which will be communicated alongside the publication of the consultation analysis report. Decisions will be taken in advance of 2026-27, to ensure that all relevant organisations and interested parties are informed in good time.

1.3 Scope

This consultation will run for 12 weeks until 6 June 2025 and offers an opportunity to give your views and ideas as to the future of the SLCF.

Views are also sought on a range of issues to inform relevant impact assessments and ensure that these are fully considered in relation to the future of the SLCF. Responses are encouraged from all interested parties.

The Scottish Government would also like to take the opportunity to seek views on how communities affected by residual waste treatment facilities should be supported as part of Scottish Government’s ongoing development of the Residual Waste plan to 2045, due to be published in 2027.

The Scottish Government will carefully consider all responses to the consultation, prior to taking a decision on the future of the SLCF and support for communities impacted by residual waste treatment facilities.

The consultation document details the background and current arrangements of the SLfT and the SLCF. This information is included in sections 1-3. The wider context of SLfT as part of Scotland’s circular economy and future considerations are noted in section 4 of the document. Section 5 includes questions related to impact assessments to gather information on potential impacts of the closure of the SLCF on specific groups. Further information on how to respond to the consultation is provided in section 6.