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Powers to enable the pilots to go ahead are currently being debated as part of the Climate Change Bill. The first pilots, which will be subject to approval by the Environment Secretary, could start from April 2009.

Waste incentive schemes are designed to charge or reward people according to the amount of unrecycled waste a household produces. Schemes could be rebate-only, offering rewards to those producing the least waste, or could be charge-and-rebate based, levying charges on those producing the most waste and using these to reward households which generate the least.

The Government wants the schemes to be 'revenue neutral', so any money raised through charges is paid back as rewards. However, their 2007 consultation showed that 50% of respondents rejected the idea of 'revenue neutral', and were mostly in favour of following the wider European model of direct charging.

Environment Minister Joan Ruddock will be writing to local authorities, inviting them to come forward with proposals for pilot schemes. The deadline will be 8 weeks after Royal Assent to the Climate Change Bill.

Joan Ruddock said:
"Evidence from countries where these schemes already operate is that charges and rebates of around £50 are enough to change behaviour and deliver real benefits for waste reduction.

"The shape of any pilot scheme will be for local authorities to determine - they know what is most likely to work for them in their own local circumstances. But there are some important principles to observe, for example the need to have a good recycling service in place already, and the need to take account of vulnerable households. This draft guidance will aim to support authorities through the process of delivering a pilot scheme, whatever their ideas may be.

"We want to share our thinking about how waste incentive schemes could work and hear the views of others. I encourage everyone with an interest to contribute to the informal consultation. This is draft guidance at this stage and we will look to revise and improve it in the light of the comments we receive."

South Norfolk Experience
The Conservative run South Norfolk District Council stopped the trial soon after ousting the LibDems in the 2007 local elections, citing problems with the technology.

Council Leader John Fuller said:
"Any chip-in-bin system would have to accurately record the weight of every bin, every week, without mistakes, for a whole year. But the system simply didn't work reliably enough.

"A system that sounded good on paper in London failed to work at 7.30am on a cold and wet Monday in December in South Norfolk. It was time to bin the technology."

Councillor David Bills, Cabinet Member for Environment, Health, Recycling and Safety, joined bin crews and saw the problems for himself.
"I spent a day on the rounds with a bin crew and experienced the frustrations of chips not being read which required a manual over-ride to take place. This added to our resolve to put an immediate stop to it, knowing that it would also reassure our residents.

Joan Ruddock added:
"No decision has been made about rolling out powers more widely - we will make a decision only once we have high quality, robust data from the pilots."

Evidence from around Europe
In many countries householders pay according to how much waste they throw away and the evidence shows that this has led to higher levels of recycling and less waste being generated in the first place.  Defra cite the following cases:

In Maastricht, Netherlands, householders buy special sacks to dispose of their waste. Recycling has risen by 15 percentage points and the municipality's overall waste bill fell by 20%.

In Treviso, Italy, householders pay according to how often their non-recycled waste is collected. The scheme has helped achieve a 12% reduction in waste levels.

In Bjuv, Sweden, householders are billed according to the weight of their non-recycled waste. Waste levels fell by 19% and recycling rose by 49% in the first year of the scheme.

Landfill Tax
The cost of landfill is increasing rapidly because of the increase in the landfill tax escalator by £8 (per tonne) per year from 2008 until at least 2010/11 - announced by the then-Chancellor Gordon Brown in March 2007. Partly as a result of this, business waste landfilled is expected to fall by 20 percent by 2010 compared with 2004.