Every town and city across the country will receive a major boost to their recycling services, with more than £1 billion funnelled into improving critical infrastructure and collections, Circular Economy Minister Mary Creagh announced today (Saturday 26 July 2025).
Under an outdated regime, the bill for disposing of items like milk bottles, cereal boxes and soup tins is currently footed by local councils with taxpayers paying.
Through the new Extended Producer Responsibility for Packaging scheme, businesses who produce packaging will pay their fair share of the recycling costs.
Delivering on the government’s Plan for Change, the investment will unlock regional growth, create new green jobs across the country, and boost household recycling rates which for years have failed to show significant improvement.
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.
The scheme works by charging fees to the businesses that use packaging to meet the costs of collecting and recycling it. The costs will be higher for hard to recycle materials and less where packaging can be reused or refilled.
This will encourage businesses to reduce the amount of packaging they use, shift to more recyclable materials and design new products that can be recycled and reused more easily, stopping waste from going to the nation’s landfills or incinerators.
For the coming year, councils in England will receive £1.1 billion to improve recycling services for residents. This could be spent on offering local residents more streamlined recycling collections which can ensure more household waste is recycled.
The funds can also go towards building new infrastructure or covering the costs of upgrading facilities where councils send household waste. This includes Veolia’s Integrated Waste Management Facility in Southwark, which handles and processes materials collected from homes, and then sends them to be turned into new products.
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Whether it’s channelling more money into recycling or reforming the outdated funding system, we are fixing the foundations of local government so that it can focus on what matters most to people across the country.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.
The Environment Secretary has been clear that all councils must use this funding to deliver improved packaging waste collection services for their communities, with PackUK empowered to reduce future allocations if evidence shows that funding has been used for other purposes.
The Extended Producer Responsibility for Packaging scheme is a crucial part of the government’s packaging reforms, which industry estimates will support 25,000 new jobs and underpin £10 billion of investment in new sorting and processing facilities over the next decade.
Alongside Extended Producer Responsibility for Packaging, the government is introducing a Deposit Return Scheme in 2027. This will provide a financial incentive to return empty drinks containers to a collection point, such as at their local supermarket, so that bottles or cans will be recycled.
A sensible and pragmatic approach to the collection of materials from households and workplaces is also being introduced. Simpler Recycling for workplaces went live in March 2025 and launches for households in March 2026. It will boost recycling rates and reduce the amount of waste sent to landfill.
The action to clean up Britain doesn’t end there – with the Circular Economy Taskforce working with sectors to create a series of specific roadmaps to improve and reform the approach to using materials, underpinned by a Circular Economy Strategy which will be published in autumn.
