The Externality

There is an invoice. It was sent to ten different addresses, and nobody totalled it.

In a wood in Kent, approximately 30,000 tonnes of illegally deposited waste sit across four acres of what was, until recently, a Site of Special Scientific Interest. The Environment Agency estimates the cleanup will cost up to 15 million pounds. The contract has been let. Lorries are removing roughly twenty loads per day. Site preparation began in March 2025; waste removal started in June 2025 and is expected to take more than one year.^1,2

Hoad's Wood is the only large illegal waste site in England that the EA has committed to clearing. A ministerial direction from the then Environment Secretary, Steve Barclay, was required to authorise the expenditure.³ Three men were arrested in February 2025 in connection with the dumping; they have not been charged at the time of writing.⁴ The EA describes the likelihood of recovering costs from those responsible as "very low."²

The first report in this series established that the disqualification register cannot tell you how many banned directors ran waste companies.⁵ The second report documented the mechanism: a transfer form that does not check the register, a relevant convictions regime that excludes civil-administrative disqualification, and a financial provision requirement of zero pounds for non-landfill waste sites.⁶ This report asks the third question.

What does the public pay when a waste company dissolves? And has anyone ever added it up?

Up to 15 million pounds

Start with what we know.

The EA's procurement ceiling for the Hoad's Wood cleanup is 15 million pounds, as published on the Find a Tender service in 2024.¹ EA CEO Philip Duffy estimated that 15 million should be made available, while local media report a range of 10 to 15 million.² The cleanup is underway. The final figure is not yet known.

A significant portion of that cost — estimated at up to 4 million pounds — is landfill tax.⁷

I need to show that arithmetic, because the arithmetic is the finding.

The standard landfill tax rate, set by HMRC from April 2025, is 126 pounds and 15 pence per tonne.⁸ Approximately 30,000 tonnes of waste must be removed from Hoad's Wood.¹ If all of it were sent to landfill, the tax would be approximately 3.8 million pounds. Not all of it will go to landfill — some may be recycled or sent to energy-from-waste. The actual tax bill will depend on routing. But the order of magnitude is confirmed by multiple sources: approximately 4 million pounds of the cleanup cost is landfill tax, paid by the EA to HMRC.⁷

The EA is paying HMRC to clean up waste that was deposited to avoid legitimate disposal costs — costs of which landfill tax is a major component.

Stay with me. This is not rhetorical. The landfill tax was introduced in 1996 to discourage waste going to landfill — and it has worked. The first report in this series documented the consequence: at 126 pounds per tonne, the tax creates a spread between legal disposal and illegal dumping that generates an expected return exceeding 2,000 to 1.⁵ The tax discourages legal landfill. It also, structurally, incentivises illegal disposal. When the EA cleans up an illegal site, the removed waste enters the legitimate disposal system and attracts the same tax rate as any other waste. The tax on the crime and the tax on the remedy are identical.

If the landfill tax rises — as it has, from 84 pounds per tonne in 2016 to 126 pounds in 2025⁸ — illegal dumping becomes more profitable. More waste is dumped. The EA must eventually clear more of it. The EA pays the higher landfill tax on the cleared waste. The cost of the remedy rises in proportion to the incentive for the offence.

According to British Brief, Lord Russell described this arrangement as one in which "one arm of government is robbing another" and said it "borders on the ludicrous."⁷ Calum Miller MP noted that the EA receives approximately 15 million pounds annually for waste crime enforcement, while the Treasury collects approximately 500 million from landfill tax — a ratio of 33 to 1.⁷

No exemption exists for EA-directed cleanup of illegal waste. The Lower Rate of 4 pounds and 5 pence per tonne applies only to qualifying inactive or inert waste — materials that pass a Loss on Ignition test with less than 10 per cent organic content.⁹ Mixed household and construction waste from an illegal dump does not qualify. Land Remediation Relief under HMRC guidance provides corporation tax deductions, not landfill tax exemption, and applies to companies cleaning contaminated land — not to a government agency clearing a crime scene.¹⁰

The Treasury has not committed to creating an exemption.⁷

The counter-argument is not trivial. If EA-directed cleanup waste were exempt from landfill tax, any operator could arrange for waste to be "discovered" and routed through an exempt channel. Universal application prevents gaming. The safeguard that would prevent it — EA-certified remediation orders with judicial or ministerial authorisation, limiting the exemption to formally directed cleanups — has never been designed. Not because the safeguard is impossible. Because no single payee bears enough of the cost to commission its design.

2 of 10

Now look at what we do not know.

We attempted to build the complete invoice for Hoad's Wood. Not just the EA's share. Every payee. Here is the result.

THE INVOICE: HOAD'S WOOD (PUBLIC COST)

Two. Of ten potential payee categories, two have published numbers. The EA cleanup cost and the calculated landfill tax. The other eight are documented absences — costs that are being incurred but have not been published, aggregated, or attributed.

This is the best-documented illegal waste site in England. It has a ministerial direction. A procurement notice on Find a Tender. Three arrests. National media coverage. An eighteen-month remediation programme. A parliamentary debate. A community campaign with a written timeline of every council interaction since January 2020.¹¹

And still, the complete invoice does not exist.

There is a name for this pattern — a name this report will build toward. When a cost is distributed across enough payees, each share falls below the threshold that triggers aggregation, and the total is never calculated. The mechanism is not concealment. It is arithmetic. Call it the Distributed Invoice. Before we define the mechanism fully, watch it operate at a second site.

25,000 tonnes

Forty miles south of Wigan, on Bolton House Road in Bickershaw, approximately 25,000 tonnes of waste sit near terraced houses and Bickershaw Church of England Junior and Infant School. Josh Simons, the Labour MP for Makerfield, says he alerted the EA in January when dumping began at a rate of twenty truckloads per day.¹²

The EA has not committed to clearing Bickershaw.¹²

On 1 July 2025, the waste pile caught fire. The blaze was declared a major incident and burned for nine days. Bickershaw Primary School closed on multiple occasions due to smoke and low water pressure. Greater Manchester Fire and Rescue Service, Wigan Council, and United Utilities responded. Magistrates granted a closure order on 18 July 2025, extended for three months in October.¹²

The landfill tax alone on removing 25,000 tonnes, at the standard rate: approximately 3.15 million pounds. Before transport. Before gate fees. Before remediation of the land beneath.⁸ The total cleanup has been estimated at 4.5 million pounds.¹²

Approximately 30 per cent of the site sits on land vested in the Duchy of Lancaster — one more payee, one more budget, one more line on an invoice nobody has written.¹³

There is no Hoad's Wood invoice for Bickershaw. No ministerial direction. No procurement notice. No EA commitment. The payees — Greater Manchester Fire and Rescue (nine days of fire response), the school (lost teaching days), Wigan Council (closure orders, community liaison, FAQ page), residents (closed windows, health anxiety), the Duchy (land ownership with no published remediation action), the NHS (health monitoring during and after the fire) — are absorbing costs individually, from individual budgets, with no aggregation.

Simons told local media the impact of "blatant criminality continues to be very severe on the community in Bickershaw, from lost days of school when the pile caught fire to closed windows on blisteringly hot days."¹² He compared Bickershaw to Hoad's Wood and asked why one site receives a 15-million-pound cleanup and the other does not.

The Distributed Invoice offers one answer. Hoad's Wood reached the threshold — a ministerial direction, a parliamentary debate, national media — and the EA's share alone was large enough to appear in a procurement notice. Bickershaw has not reached the threshold. Its costs remain distributed, below the line, in budgets that absorb them as ordinary expenditure.

836 million pounds

HMRC estimates it lost 836 million pounds to phoenixing across all sectors in 2022-23 — an approximately 47 per cent increase from the previous estimate of 570 million. Phoenixing losses represent approximately 20 per cent of HMRC's total uncollected tax for that period.¹⁴

How much of the 836 million is from the waste sector?

HMRC does not publish a sector breakdown.¹⁴ The figure covers all industries. Media reports note that phoenixing is "particularly prevalent among retail firms." Construction and hospitality are mentioned anecdotally.¹⁵ Waste does not appear in the breakdown because the breakdown does not exist — for the same reason the Insolvency Service does not track director disqualifications by sector, as the first report in this series documented.⁵

The 836 million is one payee's total. HMRC's total. It generates headlines because it is aggregated within a single department. The Autumn Budget in November 2025 announced a new Abusive Phoenixism Taskforce — fifty investigators, 25 million pounds over five years — in direct response.¹⁶ One department's aggregated number produced one department's policy response. That is the Distributed Invoice at work: aggregation within a department triggers action; distribution across departments triggers nothing.

Now add the other payees.

The Receipt

The first report showed the receipt for a single illegal dump: 1,600 pounds revenue, 1 pound expected penalty, 2,000:1 return.⁵ The second report showed the receipt for a corporate rebirth: 297 pounds plus a permit transfer charge.⁶

This is the receipt nobody has written.

THE RECEIPT: ONE PHOENIX CYCLE (PUBLIC COST)

Nine payee categories. Some with published per-agency figures. None with a cross-agency total. The total public cost of waste-sector phoenix trading has never been calculated — not by the NAO, not by DEFRA, not by any published academic analysis the research supporting this report could identify.²¹

The NAO's 2022 investigation into government's actions to combat waste crime — the most comprehensive review available — reports each agency's costs separately. It finds that the EA "does not currently have the data it needs to identify and assess the full extent of all waste crime." It records that the single multi-agency investigation Operation Nosedive cost more than 3 million pounds.²¹ But it does not sum the cross-agency total. The NAO examined the problem through each department's lens, and each department reported its own line.

924 million pounds

Research commissioned by the Environmental Services Association estimates that waste crime costs the English economy 924 million pounds per year — a figure frequently rounded to 1 billion in parliamentary debates and media coverage, representing a 53 per cent increase from the 2015 estimate of 604 million.^17,22

It would be reasonable to ask: if someone has already calculated a figure approaching 1 billion, why does this report claim the total has never been added up?

Because the 924 million and the Distributed Invoice measure different things.

The ESA-commissioned figure is a modelled estimate of economic impact — competitive distortion, environmental damage valuation, health impact estimates. It is a macro-economic model of what waste crime costs the economy.²²

It is not a cross-agency public spending audit. It does not tell you what HMRC lost in unpaid tax from waste-sector phoenix operators. It does not tell you what Wigan Council spent responding to the Bickershaw fire. It does not tell you what Greater Manchester Fire and Rescue Service allocated to nine days of continuous attendance. Several of these costs are counted separately — HMRC's 836 million phoenixing estimate, for instance, is its own publication, not a component of the ESA's 924 million.^14,22

The total is not 924 million. The total is 924 million plus the costs the 924 million does not count.

The invoice has more payees than any single estimate includes. That is the finding.

158 million pounds

One line on the receipt deserves brief attention, because it shows how the Distributed Invoice operates even within a single cost category.

In January 2021, Eunomia Research and Consulting estimated the annual cost of lithium-ion battery fires in waste and recycling facilities at 158 million pounds — 201 such fires per year, representing approximately 48 per cent of all waste facility fires. Waste operators bear an estimated 90 per cent of costs; fire services and environmental damage account for the remainder.¹⁹ That figure covers lithium-ion battery fires only. The cost to fire services of attending waste fires from other causes — fires whose origin is "unknown" or "suspected arson," the fires that the National Fire Chiefs Council joined the Joint Unit for Waste Crime specifically to address²⁴ — has not been separately estimated. Another payee. Another gap.

1996

In 1996, the Environment Act 1995 ended the regime under which waste site operators could surrender licences without restriction, leaving cleanup to the public purse. After 1996, operators must demonstrate that no pollution is occurring before a licence can be surrendered.²⁵

The reform closed the front door.

The phoenix cycle uses the side door. Dissolution and liquidation bypass the surrender process entirely. When a waste company enters liquidation, the liquidators can disclaim the environmental permit as "onerous property" — a legal term meaning the permit is worth less than the cost of complying with it. The permit is extinguished. The monitoring obligation dies with it.²⁶

The contamination does not pause for liquidation proceedings. Leachate continues to generate. Groundwater migration continues. Gas emissions continue. But nobody is measuring.

Six operational landfills were abandoned between 2023 and 2025, according to the EA's Chief Regulator, suggesting that the risk of landfill abandonment is increasing.¹⁷ Walleys Quarry in Staffordshire is the documented case. The timeline: on 28 November 2024, the EA issued a closure notice. In February 2025, the company entered voluntary liquidation. On 28 February, the liquidators disclaimed the permit. By March, the EA was exercising statutory powers under Regulation 57 of the Environmental Permitting Regulations just to maintain basic environmental controls.²⁶

Four months. From operating landfill to orphan site.

But Walleys Quarry was a landfill. Financial provision was in place. The EA confirmed: "The current work being undertaken at the site is being funded by the financial provision that Walleys Quarry Ltd provided in accordance with its environmental permit."²⁶ CLP Envirogas Limited continues operating the gas management system. The bonds or cash deposits set aside during operation are paying for aftercare even though the company that provided them no longer exists.

The mechanism works where it exists.

For non-landfill waste sites — transfer stations, treatment facilities, material recovery facilities, storage sites — the financial provision requirement is zero. Report 049 documented why: DEFRA committed in 2018 to introducing financial provision for non-landfill sites and has not done so.⁶ This report documents what that zero costs.

At Walleys Quarry, even with financial provision in place, the non-preferential creditor deficit is 3.2 million pounds. HMRC is owed 1.6 million in unpaid taxes. The EA is owed 591,993 pounds — the regulator is itself a creditor. Newcastle-under-Lyme Borough Council is owed 132,097 pounds.²⁷ The financial provision pays for environmental monitoring. It does not cover the debts. Three payees — HMRC, the EA, the council — absorb their losses from their own budgets.

Now imagine the same scenario at a non-landfill site. No financial provision. No funded aftercare. No mechanism to maintain monitoring during the orphan period. The contamination runs. The meter runs. Nobody is reading it.

England has approximately 20,000 historic landfill sites recorded in the EA's national dataset — with the caveat that "more sites may exist as records are believed to be incomplete."²⁸ Academic research has identified that 46 per cent of groundwater Source Protection Zone 3 areas contain historic landfills that would not be permitted under modern regulations.²⁹ These are the sites whose licences were surrendered before 1996, whose operators walked away when walking away was legal, and whose contamination clocks have been running, in some cases, for decades.

The Distributed Invoice

Mancur Olson demonstrated in 1965 that when costs are diffused across many actors while benefits are concentrated among few, collective action to address the costs will not occur.³⁰ Diffuse costs and concentrated benefits are well-understood. What Olson's framework assumes, however, is that the actors know the cost. They know the total. They find it individually irrational to act, because each actor's share is too small to justify the effort of organising.

The Distributed Invoice identifies a prior step. Before actors fail to act on a known cost, they fail to know the cost at all.

Here is the mechanism, in four steps.

Step 1: Distribute. When a waste company dissolves, the costs it was legally responsible for scatter across eight or more public bodies. HMRC absorbs unpaid tax. The EA absorbs enforcement and cleanup. Councils absorb emergency services. Landowners absorb site remediation. Fire services absorb waste fires. The NHS absorbs health monitoring. The Insolvency Service absorbs investigation costs. The court system absorbs criminal proceedings.

Step 2: Below threshold. Each payee absorbs its share as a line in its own budget. Waste fires sit in the fire service budget. Emergency waste collection sits in the council budget. Enforcement sits in the EA budget. No single payee's share is large enough to trigger a cross-agency inquiry. The EA's 15.6-million-pound enforcement budget is its largest ever — a 50 per cent increase.¹⁷ It is still a rounding error in the context of total public spending.

Step 3: No aggregation. No entity is mandated to total the cost across all payees. The NAO examines individual departments. The EA reports its own costs. HMRC reports its own losses. The 2022 NAO investigation — the most comprehensive review of waste crime in England — reported per-agency. Not cross-agency.²¹

Step 4: No total. Without a total, no headline. Without a headline, no political pressure proportionate to the actual cost. HMRC's 836 million generates a taskforce because it is one department's aggregated number. The cross-agency total — which includes HMRC's share plus the EA's share plus councils plus landowners plus fire services plus NHS plus the Insolvency Service plus courts — has never generated a policy response because it has never been calculated.

The distribution is the silencer.

This is not Olson's problem. Olson's actors know the total and choose not to act. The Distributed Invoice's payees do not know the total because no institutional mechanism exists to produce it. The measurement gap precedes the action gap. You cannot fail to act on a number that does not exist.

The proportionality objection

The strongest version of the counter-argument is this: cross-agency cost aggregation is expensive and rarely done for any policy area. DEFRA does not total the cross-agency cost of agricultural pollution. The Department for Transport does not total the cross-agency cost of road accidents beyond its own valuation. The absence of a cross-agency total for waste-sector phoenix trading is standard departmental accounting practice, not evidence of a silencing mechanism. If the total is modest — say, 200 million pounds per year — the cost of the audit may exceed the value of the finding.

This argument has a structural problem. The claim that the total might be modest can only be evaluated by calculating the total. The argument against aggregation is itself a product of not having aggregated. If you distribute a cost below the threshold of measurement and then argue that measurement is unnecessary because the cost is probably small, you have constructed a mechanism that prevents the evidence that would determine whether the mechanism matters.

The Distributed Invoice is self-reinforcing. It prevents the measurement that would determine whether measurement is worthwhile.

The Hoad's Wood invoice, one more time

Return to the ten payees. The EA's share: up to 15 million pounds, published. The landfill tax: estimated at up to 4 million, calculated. HMRC's evaded tax from the operator: unknown. The Insolvency Service's investigation cost: unknown — no published link between the Hoad's Wood arrests and any IS director disqualification proceedings. The court costs: pending, with three arrests and no charges filed. The NHS cost for air quality monitoring and health assessment (hydrogen sulphide was detected on-site and UKHSA is providing analysis): not published. Ashford Borough Council's community liaison and odour investigation costs: not published. Landowner losses across the fragmented private plots: not published. Road damage from dump trucks during the period of illegal activity: not published.^1,2,4,11

Two of ten payee lines have published figures. At a site with a 15-million-pound cleanup budget. After ministerial intervention, three arrests, and parliamentary debate.

The invoice has been partially sent — in two pieces, by two senders (the EA and the journalists who calculated the landfill tax). The other eight pieces are sitting in eight budgets, unlabelled, unconnected, untotalled.

The Levers

Three changes would alter the arithmetic this report describes.

1. Total the invoice.

A cross-agency audit of waste-sector phoenix trading costs — HMRC losses, EA enforcement, council emergency expenditure, landowner remediation, fire service attendance, NHS health monitoring, IS investigations, court proceedings — would produce a number. The number might be modest. It might not. The point is that nobody has done the addition, and the political response is calibrated to each payee's individual share rather than the combined total. The NAO has the mandate, the methodology, and the cross-departmental access. It examined waste crime in 2022 and reported per-agency. A cross-agency cost study would close the specific information gap this report identifies.

2. Exempt the remedy.

The landfill tax on EA-directed cleanup of illegally deposited waste could be exempted — or redirected — through a mechanism limited to formally directed remediation: ministerial or judicial authorisation, EA-certified remediation orders, with safeguards against the gaming risk the Treasury implicitly invokes. The exemption would not apply to commercial waste disposal. It would apply to the specific circumstance in which the regulator is cleaning up a crime. Lord Russell, Calum Miller MP, and Terry Jermy MP have called for such a measure in Parliament.⁷ The Treasury has not committed to it.

3. Price the exit.

This is the mechanism-level intervention identified across all three reports. Report 049 documented the eight-year delay on DEFRA's commitment to financial provision for non-landfill waste sites.⁶ The Walleys Quarry case demonstrates the mechanism working for landfills: the bonds survive dissolution and fund aftercare.²⁶ The proportionality question — what scale of provision is appropriate for a small transfer station — is answerable through a consultation DEFRA committed to in 2018 and has not published. The current amount, zero, was identified as inadequate by the government's own assessment eight years ago.

What Would Change This Analysis

This analysis rests on the absence of cross-agency cost aggregation. Five developments would require revision.

1. If the NAO, DEFRA, or any other body published a cross-agency audit that totalled the public cost of waste-sector corporate failure across departments — HMRC, EA, councils, fire services, NHS, IS, courts — and the total proved modest relative to the individual departmental figures, the Distributed Invoice mechanism would be confirmed as real but the policy case for aggregation would weaken. The finding would be: the total exists, and it is proportionate.

2. If the ESA-commissioned 924-million-pound waste crime estimate were shown to include the same payee lines the Distributed Invoice identifies — HMRC's tax losses, council emergency costs, fire service attendance, NHS health monitoring — then the total would already be approximated within that figure, and the claim that "nobody has added it up" would be inaccurate. The research supporting this report could not find evidence of this inclusion; the 924 million appears to be a modelled economic impact estimate, not a departmental expenditure aggregation.²²

3. If HMRC published a sector-level breakdown of the 836-million-pound phoenixing loss, showing waste's share to be negligible, the implicit connection between waste-sector phoenix trading and tax losses would weaken. The current absence of a breakdown is itself evidence for the Distributed Invoice — even HMRC's aggregated figure does not isolate waste.

4. If a landfill tax exemption for EA-directed remediation were enacted with adequate anti-gaming safeguards, the most specific perverse cost identified in this report — the tax on the remedy — would be resolved. The remaining payee lines would persist.

5. If DEFRA published the financial provision consultation committed to in 2018 and enacted legislation requiring provision for non-landfill waste sites, the costless exit that enables the phoenix cycle would acquire friction. The Distributed Invoice would not disappear — the costs would still scatter across payees — but the size of each payee's share would diminish because the operator, not the public, would have pre-funded the cleanup.

The Landing

This series asked three questions and found three absences.

Report 048 asked how many banned directors ran waste companies. The answer: the register does not count by sector. The Insolvency Service confirmed in a Freedom of Information response that it does not hold the data. A system designed to remove unfit directors from company management does not track whether it has removed them from the sector that dominates its enforcement partner's workload.⁵

Report 049 asked how the successor company takes over the same site. The answer: the transfer form does not ask about the previous operator, the relevant convictions regime does not include civil-administrative disqualification, and the financial provision requirement for non-landfill sites is zero.⁶

This report asked what the public pays. The answer: nobody knows. The cost is distributed across enough payees that no single entity bears sufficient cost to trigger aggregation. HMRC absorbs unpaid tax and publishes its total. The EA absorbs enforcement and publishes its budget. Councils absorb emergency services and publish nothing specific. Landowners absorb site remediation. Fire services absorb waste fires. The NHS absorbs health monitoring. Each payee manages its own line. Nobody totals the invoice.

A register that does not count. A form that does not ask. An invoice that was never sent.

The first absence means the system cannot identify the problem. The second means it cannot prevent the cycle. The third means it cannot measure the cost. Three reports. Three mechanisms of non-measurement. Each functioning exactly as its design permits.

Now you have seen the ledger. All three pages.

What you do with that is yours.