The latest Budget has unveiled significant reforms aimed at improving waste management and recycling practices in the UK.
However, industry leaders are expressing concerns that the proposed funding and policies may not adequately address the challenges faced by local authorities and waste management sectors.
Funding and EPR concerns
The government is introducing Extended Producer Responsibility (EPR) and updating the Plastic Packaging Tax (PPT) in an effort to boost recycling rates and reduce reliance on landfills.
According to the Treasury, local authorities are set to receive around £1.1 billion of new funding in 2025-26 through the implementation of the EPR scheme.
However, the Local Government Association (LGA) has warned that payments from the EPR “are unlikely to cover the extra costs that arise when households put recyclable waste in the wrong bin,” which places additional financial pressure on councils.
The North London Waste Authority has echoed these concerns, stating that the “revised base fees for EPR are too low” and will negatively impact the finances of local authorities.
This backdrop of concern was highlighted in the context of Rachel Reeves delivering the first Budget by a female Chancellor, alongside Labour's first Budget in fourteen years.
Changes to plastic Packaging Tax
Among the significant announcements, the government confirmed that businesses will be permitted to use a mass balance approach to evidence recycled content in chemically recycled plastic for the PPT.
Jim Bligh, Director of Corporate Affairs and Packaging at the Food and Drink Federation, noted, “This decision was great news. Food and drink manufacturers want and need a circular economy for packaging recycling.”
He added that this change “will open up new markets for advanced recycling in the UK, creating green jobs and investment opportunities, while increasing the amount of recycled content used in food-grade packaging.”
The PPT rate for 2025-26 will also increase in line with CPI inflation to incentivise businesses to use recycled materials rather than new plastic in packaging.
Biffa CEO Michael Topham welcomed the PPT decision but stated, “To deliver a step-change in demand for recycled plastic, a progressive PPT is essential.” He emphasised, “Biffa has campaigned for this change for years and we will continue to raise it with the government.”
However, Jacob Hayler, Executive Director of the ESA, expressed disappointment that the Treasury “ignored advice” to escalate the PPT over the next five years to £500 per tonne.
He stated, “This will continue to constrain markets for recycled plastic, which in turn will damage Labour’s circular economy ambitions.”