6.23 JWAs will not have precepting powers. Formula Grant will continue to be paid to relevant constituent authorities even where a JWA may be discharging waste functions on behalf of that authority. Waste infrastructure capital grant however, could be allocated directly to a JWA where it discharges waste disposal functions and the relevant upper tier or unitary authority has given its consent.
6.24 A proposal to establish a JWA must include detail on the funding arrangements for the new authority. Therefore, authorities will need to consider and determine how a proposed JWA will be financed and how costs will be apportioned to the constituent authorities.
6.25 As a first step, authorities will need to examine and assess expenditure, income and assets. Expenditure is likely to include staffing costs, operational costs and capital costs. Income is likely to include revenue from chargeable collection schemes, recycling credits and contracts. Assets are likely to include vehicles, infrastructure and bins or boxes etc.
6.26 Servicing of any relevant debts (if any of the constituent authorities have debts relating to the waste functions they are transferring to the JWA) will also need to be taken into account.
6.27 Where a JWA is taking on the disposal function from two waste disposal authorities or more, then the authorities may wish to consider the use of a levy (which would need to be set out in the Order) whereby the JWA levies funding from its constituent authorities on an annual basis, mirroring the approach used by the six statutory waste authorities. Authorities will need to consider what criteria they would use as the basis for any such levy.
6.28 A levy is unlikely to be suitable for JWAs taking on collection functions only, or the collection and disposal functions in a two tier area. In these situations, authorities may wish to develop and use a cost sharing agreement which uses a number of specific formulae to determine the share of costs between the constituent authorities.
6.29 JWAs will have the same borrowing powers as normal local authorities (capital expenditure financed by self financed borrowing or where that borrowing is part of a programme of capital expenditure approved by Defra or another Government Department - "supported borrowing"). They will be able to borrow capital funding provided that they can demonstrate that they can service the debt.
6.30 JWAs will need to prepare annual budgets for approval by the constituent authorities. For the first year of operation, the constituent authorities will need to prepare a first year budget. Proposals for the establishment of a JWA will need to include details of this budget and how it will be funded by the constituent authorities.