The rubbish management service provided by Oxfordshire Waste Partnership has received a mixed response from an Audit Commission survey.
It said Oxfordshire compared very well to other counties, but that costs of waste collection were 'generally high'.
The partnership (OWP) is a consortium of representatives from the county council and five district councils, and is charged with improving waste disposal.
On a scale of zero to three stars the watchdog gave the service one and said it had not shown value for money.
Audit Commission manager Andy Burns said: "Oxfordshire does very well compared to other counties for the amount of waste it recycles, composts and collects, but overall service quality varies between the councils.
"The partnership's progress to agree how to address Oxfordshire's waste management issues has noticeably improved, but the councils still need to make a lot of difficult decisions before an effective new strategy is in place."
Audit Commission inspectors found: The OWP had not agreed plans and a co-ordinated approach to recycling, composting and waste treatment to reduce the amount of landfill Performance was variable between councils The partnership had no influence over the performance of individual councils Value for money had not significantly improved as a result of partnership working and costs of collection were generally high.
Some 300,000 tonnes of household waste is collected in Oxfordshire each year, with 33 per cent recycled or composted and the rest sent to four landfill sites across the county.
The potential cost of delivering a new approach to waste collection and treatment could be as much as £840m over a 25-year period from 2010 - and the penalties for not meeting targets could be as much as £18m.
The OWP has just drawn up a new waste strategy that includes the aim of recycling or composting at least 45 per cent of Oxfordshire's waste by 2015.
OWP chairman and county councillor Kieron Mallon said: "The commission is right to note there is much more to be done and that effective partnership working between councils is key.
"A great deal of work has gone into drawing up the waste strategy and we are determined and confident the OWP will play a strong and leading role in further boosting the county's success in managing its waste effectively."
Mr Burns added: "In assessing the OWP's prospects for improvement, we have been very mindful of the impressive achievements of the councils collectively to date. So, although we commend OWP and the councils on the rapid recent progress they have made, we think the prospects for improvement are uncertain because there is still a long way to go."
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