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Support for Land Remediation EUROPEAN COMMISSION Brussels, 11-06-2003 C(2003)1741fin Subject: State Aid N 385/2002 – United Kingdom Support for Land Remediation Sir, 1. PROCEDURE By letter dated 7 June 2002, registered at the Commission on 10 June 2002, the UK authorities notified, pursuant to Article 88(3) EC, the “Support for Land Remediation” scheme. By letters D/54211 and D/56476, dated 31 July 2002 and 15 November 2002, the Commission requested additional information concerning the above-mentioned measure. The UK authorities submitted the information requested by letters dated 27 August 2002 and 19 January 2003, registered at the Commission on 20 September 2002 and 23 January 2003. On 4 February 2003, a meeting between representatives from the UK authorities and the Commission took place. Following this meeting, the UK authorities submitted supplementary information on the above-mentioned scheme by letters dated 20 March 2003 and 14 April 2003, registered at the Commission on 20 March 2003 and 23 April 2003. The Right Hon Jack Straw MP Secretary of State for Foreign and Commonwealth Affairs Downing Street LONDON SW1A 2AL European Commission, B-1049 Brussel - Belgium Telephone: exchange 299.11.11. The scheme has the following characteristics: 2. OBJECTIVE OF THE SCHEME The objective of the “Support for Land Remediation” scheme is to bring contaminated land, brownfield land and derelict land back into productive use by addressing the detrimental effects of previous usage. The remediation of such land would enable the UK authorities to increase the supply of land suitable for subsequent development while simultaneously reducing the pressure for development on greenfield land. By protecting scarce natural resources and by removing contamination, pollution and dereliction, the scheme promotes important Community objectives such as environmental protection and sustainable economic development. 3. DESCRIPTION OF THE SCHEME 3.1. Rationale for the scheme 3.1.1. Terms and definitions1 Contaminated land is any land which appears to be in such a condition - by reasons of substances in, on or under the land - that – significant harm is being caused or there is a significant possibility of such harm being caused; or – pollution of controlled waters is being, or is likely to be caused. Brownfield land – more recently referred to as ‘previously developed land’ - is land which is or was occupied by a permanent structure and associated fixed surface infrastructure. Previously developed land may occur in both built-up and rural settings. The definition includes defence buildings and land used for mineral extraction and waste disposal where provision for restoration has not been made through development control procedures. Derelict land is land that is so damaged by industrial or other development such that it is incapable of beneficial use without treatment. Greenfield land is land that has not previously been developed. The terms outlined above are fundamentally different, but not mutually exclusive, and are often used to describe the same piece of land. For example, land can be derelict, brownfield and contaminated at the same time. On the other hand, not all brownfield or derelict land is contaminated, although it is frequently the case that some contamination is present. 1 “Dealing with contaminated land in England. Progress in 2002 with implementing the Part IIA regime.” United Kingdom Environment Agency, September 2002, p. 5 f. 3.1.2. Contaminated, brownfield and derelict land: More than just a hazard to the environment The harmful effects of contaminated land, brownfield land and derelict land go significantly beyond their obvious impact on the physical environment. In urban areas in particular, these sites have often been left as unsightly wasteland or derelict buildings that have an environmental, economic and social detrimental effect on the surrounding area. Surrounding communities often suffer from a decline in business activity, lost employment opportunities, reduced tax revenues, as well as a tarnished community image. 3.1.3. Remediating contaminated, brownfield and derelict land Remediating contaminated land, brownfield land and derelict land regularly involves transforming land in order to make it suitable for new uses like housing.2 Research has demonstrated that a large proportion of contaminated land, brownfield land and derelict land in the UK justifies remediation. Nevertheless, such land is particularly difficult to develop compared with greenfield land that has not been used previously, which places it at a competitive disadvantage. 3.1.4. Encouraging the reuse of contaminated, brownfield and derelict land: Protecting greenfield land As part of the UK Government’s urban renewal process, the reuse of contaminated land, brownfield land and derelict land is strongly favoured to using greenfield land. Recently released figures indicate that around 66,000 hectares of contaminated, brownfield and derelict land are still available for redevelopment in England. The UK Government has set a national target to increase the proportion of new homes built on such land to 60 per cent by 2008. 3.1.5. The UK approach to remediation: Involving market participants The UK Government’s approach to the remediation of contaminated land, brownfield land and derelict land builds upon close cooperation with market participants. Direct remediation and redevelopment of such land by the public would tie up a significant amount of public capital and human resources. At the same time, 2 Due to inadequate access or harmful neighbour uses such as heavy industry, not all sites are suitable for sensitive uses like housing. They will then be remediated for a wide range of industrial and commercial purposes. the public sector often lacks the commercial skills to effectively engage in remediation and redevelopment activities on a significant scale. The partnership approach with the private sector advocates the time-limited use of public funding in order to lever resources from the private sector to address remediation. By leveraging private sector money, a relatively small amount of public money can bring in significant amounts of private money and private sector knowledge which might be lost were the process to be led exclusively by the public. 3.1.6. Overcoming private risk-aversion The remediation of contaminated land, brownfield land and derelict land is severely complicated by the increased risks associated with real or perceived contamination. And contamination is only one of many physical characteristics that may prove to be an obstacle to the reuse of contaminated, brownfield and derelict land.3 The perceived costs of treatment act as a significant barrier to successful remediation and redevelopment. The risk profile for private sector participants - caused by contamination, the need to remove old and derelict structures before developing the sites and the difficulties in determining the full extent of potential liabilities - becomes unacceptable. The UK Government intends to introduce public money to overcome these barriers and to attract market participants to the remediation and redevelopment of contaminated, brownfield and derelict land. Public funds will only be made available for the cleaning up of such land prior to any further redevelopment and any potential increases in the value of the land after remediation will be clawed-back. 3.1.7. The outcome desired: A regenerated physical and socio-economic environment The public-private partnership approach to remediation delivers a stimulus to private sector participants to engage in the redevelopment of contaminated land, brownfield land and derelict land. The redevelopment goes hand in hand with the cleaning up of the land, thereby reducing pressure on the development of greenfield land. At the same time, the redevelopment and remediation of contaminated, brownfield and derelict land fosters the physical transformation of surrounding areas, the reconstruction of their economic base and the improvement of social conditions for local communities. As a result, land and 3 Such sites may also include structures requiring demolition, old foundations causing obstructions, redundant or current services, or presence of rubble or infill of unacceptable quality in terms of stability or structural properties. property values will increase and a lasting momentum for private sector led development - without further need for public assistance - will be built. The consequent change of the image and perception of the areas will create a level of confidence in their future, which will in turn secure future private sector investment. Public money is used to kick-start this process. 3.2. Administration of the scheme The scheme will be implemented at national, regional and local government level by the following administrative bodies (hereafter referred to as “regeneration bodies”) as well as by the Scottish local authorities: Regional Development Agencies: One North East Development Agency North West Development Agency Yorkshire Forward Development Agency East Midlands Development Agency Advantage West Midlands Development Agency South East of England Development Agency South West of England Development Agency East of England Development Agency London Development Agency Highlands and Islands Enterprise Urban Regeneration Agency: English Partnerships Councils: County Councils District Councils London Borough Council Common Council of the City of London Council of the Isles of Scilly 3.3. Legal basis of the scheme The legal basis of
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