The Environmental Audit Committee said the targets for recycling and recovery are 'unambitious by European standards' yet still pose 'a significant challenge for local authorities by demanding rapid improvement on traditionally low recycling rates'.
During an inquiry held by the committee, a series of witnesses pointed out how funding is a critical issue for councils as they are banned from making direct charges in most circumstances.
Budgets are also hit by the general increase in quantities of household waste, while prices in the waste sector have been growing above inflation.
MPs also warned of tension between the top-down approach of the targets within the waste strategy, and the bottom-up approach of best value.
This could lead to 'district councils fighting plans for incinerators put forward by the counties or regions if district councils are concerned regional plans are jeopardising their ability to meet best value performance indicators.'
MPs noted how inadequate funding and a lack of clear government guidance are hindering councils, and said it was 'extremely concerned the measures taken to date do not reflect the urgency of the need for improvement'.
And they said councils need more defined responsibilities and improved powers to tackle the growth in fly-tipping.
The committee wants the government to use the opportunity presented by the Anti-Social Behaviour Bill to address the weaknesses in the anti fly-tipping regime.