UK Government Spending Review 2025: Implications for the Waste and Recycling Sector
The Government has released its annual spending review, which has raised significant concerns within the waste management and circular economy sectors.
The review, presented by Chancellor Rachel Reeves in parliament, highlighted substantial budget cuts for the Department for Environment, Food and Rural Affairs (DEFRA), which could have serious implications for waste policy and implementation.
Key Points:
- Defra Budget Reductions: Defra is set to experience one of the largest budget cuts among government departments, with its resource spending projected to decrease from £4.8 billion in 2025-26 to £4.7 billion by 2028-29. This represents an average annual real-term cut of 2.7%.
- Local Authority Funding Uncertainty: While the Spending Review includes funding for local authorities to implement Simpler Recycling as part of the Collection and Packaging waste reforms, the lack of specific budget allocations raises concerns about the feasibility of these initiatives.
- Capital Investment Focus: The capital funding of £16 billion allocated to Defra over the review period is primarily directed towards farming, nature recovery, and flood defences, with minimal investment in waste infrastructure or circular economy projects.
- Operational Challenges: The reduced budget for Defra may hinder its capacity to develop policies, provide regulatory oversight, and support implementation, posing significant challenges for the waste sector.
- Environmental Advocacy Response: Environmental groups have expressed disappointment with the limited focus on waste management and circular economy initiatives, calling for stronger government commitments in these areas.
It has been confirmed, however, that local authorities will receive substantial increases in grant funding over the coming years, as the government plans to implement various measures, including recycling reforms.
Chancellor Reeves announced an additional £3.3 billion for councils in 2028/29 (compared to five years earlier).
RECOUP will continue to monitor these developments closely. You can find summary articles from resource.co and REB Market Intelligence here and here.