Falls in the value of collected recycled materials could have a knock on effect for local councils, with the possibility of council tax rises and delays to infrastructure building.
The Local Government Association (LGA) has written to all local authorities to determine the extent of the problems they may be facing, an LGA spokesman said.
The global economic downturn has caused prices to fall in the materials markets and clearly this has potential implications for councils. The LGA will take up any concerns our members have with the Government, he said.
Some responses have been collected already revealing a mixed response to the situation.
However, the spokesman added: Prices can fluctuate significantly and consequently it is too early to speculate on what the impact may be on council finances. What the uncertainty does confirm is the need for the Government to make good its pledge to return the proceeds from landfill tax to local authorities so this money can be invested in recycling facilities.