DRS administrator Circularity Scotland facing collapse

The company set up as Scotland’s deposit return scheme (DRS) administrator, Circularity Scotland, could be on the brink of collapse, potentially facing administration.  

Following a row over an exemption from the Internal Market Act between the Scottish and UK Governments, the scheme’s launch was shelved until October 2025, and staff of the company may not be paid this month, according to reports.  

Ministers at Westminster argued in effect that the scheme could only go ahead if Scotland excluded glass by only granting the DRS exemption for PET plastics and metal single use drinks containers.

The Scottish Government said the DRS would not be able to be launched if glass was not included in the scheme, a view that was not shared by Circularity Scotland, who said that scheme would remain viable.  

Following the latest delay, the not-for-profit company has been plunged into crisis, according to the Daily Record. An insider said staff had been sent home last week and employees are fearful that they will not be paid this month.  

A spokesperson for Circularity Scotland said: "The board of Circularity Scotland have been working to manage the impact of the Scottish Government's announcement and find a way for the business to continue to operate.

"While this work is ongoing, we instructed staff to go home on Thursday, June 8.

“The unfortunate reality is that, at this point, we are not able to confirm whether our staff will be paid for this month or whether they will be able to return to the office.

"The board recognises that this is an extremely difficult time for our people and is working tirelessly to find a solution. We have remained in communication with our staff throughout and will provide updates to them at the earliest possible time.”

Circular economy minister Lorna Slater said: “As a direct consequence of the eleventh hour decision by the UK Government to impose unworkable conditions on Scotland’s Deposit Return Scheme, we were no longer able to proceed as planned. I have written to Circularity Scotland to thank their staff for their hard work to get to a position where the Deposit Return Scheme was ready to launch in Scotland and to express our deep regret that we are now in this position. 

“Circularity Scotland is a not-for-profit company led and funded by industry, and it would not be appropriate for the Scottish Government to fund it. Deposit Return will still go live in Scotland, and across the UK, in 2025, so it is in industry’s interest to preserve the expertise and skills that Circularity Scotland has built up.”

A UK Government spokesperson said: “The operation of Circularity Scotland is a matter for them and the Scottish Government.

"Earlier this year the drinks industry raised concerns about the Scottish Government’s Deposit Return Scheme differing from plans in the rest of the UK.

“The UK Government listened and worked at pace to accept the Scottish Government’s request for a UK Internal Market (UKIM) exclusion on a temporary and limited basis to ensure the Scottish Government’s scheme could proceed while aligning with planned schemes for the rest of the UK.

“The Chief Executive of Circularity Scotland was categorical that the scheme remained viable on this basis and that many other successful schemes run without glass. But the Scottish Government decided not to proceed and instead further paused the scheme until October 2025. 

“Delaying the Scottish scheme was entirely a decision made by the Scottish Government."

Scottish Liberal Democrat climate emergency spokesperson Liam McArthur MSP said: “First businesses, now staff. There is no end to the list of organisations and individuals caught in the crossfire and losing out because our two governments are incapable of working with one another.  

"Deposit return schemes have operated successfully around the world. Our governments must now work together to ensure that Scotland can follow suit and end this cycle of chaos."

Conservative MSP Maurice Golden said: “The SNP and Greens who have botched this scheme from the outset must have known this could happen.

“Now their inexcusable failure means good people face losing their jobs through no fault of their own.

“Lorna Slater has repeatedly failed to acknowledge her role in this farce, and it’s time for her to face up and take some responsibility.

“The Scottish Government has shrouded Circularity Scotland and the wider process in secrecy, and this is what happens when proper scrutiny and accountability cannot be applied.

“A DRS could have been launched in Scotland next year with the support of business and consumers, but the SNP-Green government preferred to pick a fight with the UK Government instead.”