Recycling services across England are set for a major upgrade, with £1.1 billion being allocated to local councils to improve collections and infrastructure, Circular Economy Minister Mary
Creagh announced today.
The funding comes from the new Extended Producer Responsibility (EPR) for Packaging scheme, which shifts the cost of recycling from taxpayers to the businesses that produce packaging materials like milk cartons, cereal boxes, and tin cans. Until now, local councils—and ultimately, residents—have footed the bill.
Circular Economy Minister Mary Creagh said:
“This government is cleaning up Britain and ending the throwaway society.
Under the Plan for Change, we are pumping more than £1 billion into local recycling services.
This will revolutionise how we deal with our waste and ensure more of today’s rubbish is recycled into tomorrow’s packaging”.
Key features of the reforms:
- Producers Pay: Businesses will be charged based on the recyclability of their packaging—more for harder-to-recycle items and less for reusable or eco-friendly options.
- Local Investment: Councils will receive direct funding to enhance recycling collections, build new infrastructure, and upgrade existing facilities like Veolia’s Southwark plant.
- Green Jobs & Growth: The reforms are expected to support 25,000 new jobs and stimulate £10 billion in private sector investment over the next decade.
Minister of State for Local Government and English Devolution, Jim McMahon OBE MP said:
“Clean and tidy streets are something everyone wants to see, and these common-sense reforms will help councils achieve that.
Whether it’s channelling more money into recycling or reforming the outdated funding system, we are fixing the foundations of local government so that it can focus on what matters most to people across the country”.
Gavin Graveson, CEO Veolia UK said:
“We welcome the Government’s progress on the crucial suite of legislation that will help raise recycling rates, decarbonise and incentivise domestic infrastructure investment.
We look forward to supporting our local authority partners to invest in the essential services they provide to collect and recycle more materials, as well as supporting brands and producers to not only design for recyclability, but also include recycled content in their products. That’s how we’ll build a world-leading, profitable and sustainable circular economy”.
Executive Director of the Environmental Services Association, Jacob Hayler said:
“Our members stand ready to invest billions, alongside local authority partners, in the next generation of recycling services, infrastructure and jobs, which will provide a rapid boost to England’s stalled recycling rates. The new producer responsibility regime for packaging, alongside other measures to simplify recycling services, will unlock this investment and support our ambition to achieve a circular economy in the United Kingdom over the next decade”.
Jim Bligh, Director of Corporate Affairs and Packaging at The Food and Drink Federation, said:
“This announcement is welcome news for both industry and consumers, coming just before producers receive their first invoices for EPR. It marks a vital step towards delivering the improvements in the UK’s recycling system that we all want and need. With a £1.4 billion annual investment from packaging producers into EPR, we’re pleased to see the government’s commitment to ensuring these funds will be used to upgrade infrastructure and resurrect our flatlining recycling rates”.
Cllr Adam Hug, environment spokesperson for the Local Government Association, said:
“It’s positive to see the costs of managing packaging waste shift to the industry creating this waste.
Councils are proud to run some of the best recycling services in the world, with high levels of public satisfaction despite significant financial pressures.
This success is built on council’s local knowledge and strong links with communities, and we hope the new scheme will support that work and help reduce the amount of packaging ending up in household bins”.
Libby Peake, head of resource policy at Green Alliance, said:
“For too long, the costs of dealing with packaging waste and recycling have fallen unfairly on local councils and, ultimately, taxpayers, when they have no control over the packaging businesses use. It’s absolutely right that costs are now shifting to the companies who create packaging and can figure out how to use less of it in future. This is an important step in the move away from an inefficient and wasteful system”.
Support from Councils and green groups:
- The Local Government Association endorsed the shift in costs from councils to producers.
- Green Alliance’s Libby Peake said the move would help end an “inefficient and wasteful system” by holding businesses accountable for packaging waste.
What’s next?
Deposit Return Scheme to launch in 2027: Consumers will be incentivised to return bottles and cans for recycling.
Simpler Recycling rollout:
- Workplaces – already live (March 2025)
- Households – begins March 2026
The government is also developing a Circular Economy Strategy—to be published in autumn—alongside sector-specific roadmaps through a newly formed Circular Economy Taskforce.
Councils are expected to use the funding exclusively for recycling improvements. Oversight body PackUK will monitor spending and can reduce future allocations if funds are misused.