Drinks producers will not fund Circularity Scotland

Drinks manufacturers and retailers have said they "don't have the confidence" to continue funding the firm set up to run Scotland's deposit return scheme.

The British Beer and Pub Association, the British Soft Drinks Association and the Scottish Retail Consortium said "political uncertainty" had disrupted the plans.

They said the future of Circularity Scotland Limited (CSL) was at risk.

On Thursday, staff were sent home from CSL without confirmation of pay.

In a joint letter, the organisations wrote: "Our members have collectively invested significant time and tens of millions of pounds in good faith to help establish a scheme administrator in Scotland to meet a deadline originally set by the Scottish government."

They added that "a high degree of political uncertainty" had now disrupted plans and timings, putting the future of CSL at risk.

"Given this ongoing political uncertainty we don't have the confidence required to provide further voluntary funding for the company," they said.

"It is now a matter for the CSL Board to determine how it wishes to administer the company's affairs."

They added that drinks producers remained committed to working with the UK and devolved governments to deliver an aligned and interoperable DRS that efficiently and effectively met the needs of UK consumers, businesses and the environment.

Staff were sent home from CSL earlier this week and the board is unable to confirm if they will be paid for the month or if they will be able to return to the office.

The company was in charge of the deposit return scheme (DRS) which has been delayed until 2025.

The situation is believed to affect about 50 workers. The board said bosses were "working tirelessly" to find a solution and said it recognised it was an "extremely difficult time" for staff.

The Scottish government's flagship recycling scheme was supposed to launch in March next year.

But a week ago it was announced it would be delayed until October 2025 at the earliest.

The BBC understands that this further delay has made the company unviable in its current form.

CSL has issued a proposal to stakeholders saying it does not see a future with its current staffing levels.

The proposal has the company remaining solvent, almost in "hibernation" until the end of next year and then would be reactivated to go live in 2025.

The DRS was designed to improve recycling rates for certain bottles and cans by providing a financial incentive to recycle and pick up litter.

A 20p deposit would be added to cost of items sold in Scotland and then the customer would get that money back when they took the empty container to a return point, either over-the-counter at a shop or using an automated reverse vending machine.

Circularity Scotland Ltd was set up in 2021 as a not-for-profit company to administer the scheme, funded by drinks producers.

But the DRS hit the buffers earlier this year when the UK government raised concerns it was incompatible with its own planned scheme, meaning Scotland would need an exemption from the Internal Market Act.

Scottish Conservative MSP Maurice Golden said of the latest development: "This statement raises enormous question marks over the future viability of Circularity Scotland, and will cause deep alarm to its employees.

"But, equally, I fully understand the position of businesses, who are not willing to continue to bankroll CS while Lorna Slater's shambolic deposit return scheme is on hold."

He said Ms Slater was to "blame" for the "almighty mess" and that she refused to engage with businesses who had warned her that the scheme was unworkable.

"Scottish businesses are due compensation for the heavy losses incurred due to her rank incompetence," he added.