Packaging manufacturers and retailers need to fund the cost of recycling more, according to The Recycling Association chief executive Simon Ellin.
The National Audit Office has produced its report, The Packaging Recycling Obligations, that found that the Government has no evidence that the system has encouraged companies to minimize packaging or make it easy to recycle.
But The Recycling Association believes that increasing the funding for recycling by producers could lead to more and better quality recycling.
Simon Ellin said: "This report from the National Audit Office highlights the need for those who produce packaging to do more to fund its recycling.
"At the moment, approximately 10% of the cost of recycling is funded by retailers and manufacturers via the PRN system. But we would like to see this increase to at least 80% and probably 90%.
"That would give the retailers and manufacturers a proper incentive to create packaging that is easy to recycle while also providing greater investment for UK recycling infrastructure. It would also lead to better quality of recycled material so that it can more easily be remanufactured into a new product.
"Defra plans to introduce a new Resources & Waste Strategy later this year and we hope that the cost of recycling will be included in this through more Extended Producer Responsibility."
The report also highlighted how the Government has no way of knowing whether exported material is recycled.
Simon Ellin added: "Almost all of the material that our members export is recycled. There is an international market for materials, often returning it to the place of manufacture to be turned into a new product. This paper, plastic and metal is paid for by buyers as a raw material to be recycled, more often-than-not, in state-of-the-art recycling facilities.
"But the report is right to highlight those rogue operators who ship material that cannot be recycled in the hope of making a quick buck. The report highlights the need for more regulations to crack down on those who export illegal material, as well as the need for improved funding for the environment agencies in the UK to ensure they are better able to catch these criminals.
"We export material as part of a global market, and it is vital that we send a high-quality commodity to these countries. Improved regulation will allow us to do this."