Towns and cities across the country will receive a boost to their recycling services, with more than £1bn funnelled into improving critical infrastructure and collections.

Under an outdated regime, the bill for disposing of items like milk bottles, cereal boxes and soup tins is currently footed by local councils. 

Through the new Extended Producer Responsibility for Packaging scheme, businesses who produce packaging will pay towards recycling costs.

The scheme works by charging fees to 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.

Government says 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 £1.1bn 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.

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.”

The government says the Extended Producer Responsibility for Packaging scheme is a crucial part of its packaging reforms, which industry estimates will support 25,000 new jobs and underpin £10bn 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.

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.