Changes to the Landfill Communities Fund are likely because charitable groups have failed to hit a Whitehall target for cutting unspent funds.
The Treasury has announced a review, saying that environmental bodies had reduced cash piles by 17% by April 2014 but not the 25% it was seeking. This target was an extension of an original goal of a reduction of 15% by April 2012.
The Landfill Communities Fund (LCF), which was introduced alongside the Landfill Tax in 1996 and allows site operators to claim a credit against their tax liability, has generated £1.2bn to date.
Environmental bodies, often supported by landfill site owners, use these contributions to pay for a variety of projects such as maintenance or improvement of public amenities and conservation of species or habitats.
In the 2014 Budget, some £5m from the LCF pot of £71m was diverted to the Environment Agency to support the fight against the illegal treatment of waste. At the time the Government said this reflected the fact that environmental bodies had not made sufficient inroads into unspent funds.