They made millions from it. They threatened our health and poisoned the land. Among the filth they buried were industrial quantities of syringes, bloody bandages, oily waste from scrapped cars, shredded plastic and asbestos. Fleets of lorries travelled from as far afield as Birmingham to drop their loads at the sites the two men ran in south Wales, to avoid paying landfill tax. Yet these men, though responsible for one of the biggest illegal dumping crimes ever prosecuted, suffered nothing worse last week than suspended sentences, community service and fines and confiscation orders that together amount to around a tenth of the money they are known to have made.

Over the past few months, we have begun to notice the scarcely regulated pollution of our rivers and seas. But hardly anyone is aware of what’s been happening to the land. If anything, it’s even worse. The illegal dumping of waste, much of it hazardous, most of it persistent, is now a massive crisis in the UK, caused by shocking failures of government. Large areas of land and crucial groundwater sources are being contaminated by illegal tipping, and barely anyone in power seems to give a damn.

The disposal of waste in this country relies to a large extent on self-regulation. It’s up to you to check that the person to whom you hand your waste is a registered and responsible carrier. But a study into fly-tipping and unregistered waste carriers in England by Ray Purdy at Oxford University’s law faculty and Mat Crocker, the former deputy director of waste at the Environment Agency, shows that checking is nigh on impossible. Hundreds of different businesses use identical names on the Environment Agency’s official register, which often bear no relation to the names under which they advertise or trade. Many provide false names and false locations, including abandoned buildings, sports venues and, in one case, a Premier Inn. Technical glitches, unfixed after five years, ensure the site is scarcely functional.

Astonishingly, Purdy and Crocker discovered that the Environment Agency had no data for online traffic, and no research into how many people were aware of the register’s existence. There is no facility on the register to report businesses working illegally. Across the past three years, though 140,000 businesses have applied to be listed as waste handlers, the Environment Agency has refused only 19. Despite widespread evidence of fraud and several prosecutions, it subsequently revoked just two registrations. The frequent spelling mistakes in company names and addresses suggest that not even the most basic checks have been conducted.

But this is the least of it. Purdy and Crocker’s research shows that most businesses don’t appear on the list at all. Of the thousands of waste disposers they sampled, they discovered that almost two-thirds were not registered, and therefore operating unlawfully. All together, they estimate, there are over a quarter of a million unregistered waste handlers in England.

Investigating adverts placed by people offering to remove your rubbish, Purdy and Crocker reported that many of those who appeared to be sole traders (“man and van”) in fact belonged to organised networks. Of 10,426 ads on Gumtree they followed, they found that over 4,000 had been bought by just two organisations, which together spend about GBP300,000 a year advertising on the platform. Yet these ads claim to be promoting small local businesses. Each of the vans in a network, the researchers estimate, could allow the organisation to evade GBP132,000 of taxes. The return on investment for a company running 100 fake sole traders, they reckon, is somewhere between 40 to 1 and 80 to 1. Here, as in Italy, it seems we have a waste mafia. But unlike the Italian mafia, ours seldom needs to resort to intimidation or violence, because no one stands in its way.

All together, the report suggests, between 1m and 6m tonnes of waste in England are handled outside the lawful system every year. Illegally dumped waste contaminates the soil, the water and – when it is deliberately burned or spontaneously combusts – the air with a vast range of toxins, most of which are likely to be unmonitored and unrecorded. The more hazardous the waste, the greater the incentive to cut corners.

We have no idea what the impact on our health and that of the rest of the living world might be, or what the results of this staggering regulatory failure would cost to clean up. During a rare prosecution in 2019, a court was told that a large illegal waste dump in a quarry close to Chew Valley Lake in Somerset might end up costing us as much as GBP9bn in remediation, if the contaminants leach into the water supplying Bristol and other settlements.

Rusting drums photographed at an illegal dump in Pirbright, Surrey, beside a string of nature reserves, are suspected to contain extremely toxic polychlorinated biphenyls. An unidentified yellow substance has been reported leaking from the site into local streams. If some of this sludge emanates from the barrels, the possible consequences are scarcely calculable. According to the ENDS Report, local campaigners claim that Surrey county council and the Environment Agency have known the identity of the people using this site since 2009, but have failed to take legal action against them.

On the rare occasions when the Environment Agency, or its equivalents elsewhere in the UK, can find the money for a pair of wellington boots and a hi-vis jacket and send someone out to check, they tend to offer repeated warnings before taking action. Even then, the most common punishment is a fixed penalty notice. If a case gets to court, people who might have made a fortune from their illegal activities are fined a few hundred pounds. In a recent prosecution, a man was found to have run an illegal dump that contained over 600 tonnes of waste, and evidence was presented that he had been burning hazardous materials. He was fined GBP840. The Environment Agency announced, “We hope this case will send a clear message”. It will, but not the one it intends.

It’s a familiar story: of almost total regulatory collapse. The failure of the Environment Agency’s waste register looks similar to the farce of company registration, devastatingly exposed by Oliver Bullough. This story reminds me both of the catastrophic failure to protect elderly and vulnerable people against fraud and of the dumping of raw sewage and farm manure into our rivers and seas.

All these failures are inevitable outcomes of 40 years of “cutting red tape”, of slashing the budgets of regulatory agencies, of outsourcing and self-reporting. We were promised freedom. But the people our governments have set free are criminals. Yet another filthy business is cleaning up.

• George Monbiot is a Guardian columnist