The firm which was due to manage a controversial recycling scheme in Scotland has gone into administration. Circular Economy Minister Lorna Slater told MSPs the collapse of Circularity Scotland was a “disaster” for its 60 workers. The company was in charge of the deposit-return scheme (DRS), which has been delayed until 2025. Ms Slater blamed the firm’s demise on conditions imposed by the UK government such as the exclusion of glass. Opposition parties said she was refusing to take responsibility for the collapse of the firm and called on the Scottish Greens co-leader to quit as the government’s circular economy minister.
Ms Slater told the Scottish Parliament: “We have learned today that a process is underway to appoint administrators to CSL [Circularity Scotland Ltd] leaving their staff in an extremely difficult position. “This is an unforgivable consequence of the UK government’s 11th hour intervention which undermined our deposit-return scheme, made progress impossible and is now resulting in these jobs being lost.” She added: “We set out what we were going to do, the UK government changed their mind at the last minute.” A UK government spokesman said delaying the Scottish scheme was entirely a decision made by the Scottish government, and that the decision to exclude glass was made after the drinks industry raised concerns about it differing from plans in the rest of the UK.
He added: “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”. It emerged last week that Circularity Scotland was on the brink of collapse, with staff sent home and the board unable to say whether they would be paid this month. Drinks manufacturers and retailers subsequently said they did not have the confidence to continue funding the firm due to the “political uncertainty”.
The future of Circularity Scotland had been thrown into doubt when the Scottish government announced the deposit-return scheme, which was supposed to launch in March of next year, would not be introduced until October 2025 at the earliest. The delay came after the UK government agreed to grant an exemption to internal market rules but only if the scheme excluded glass to bring it into line with similar proposals for elsewhere in the UK that are also due to launch in October 2025.
The chief executive of Circularity Scotland had said there was no reason why the Scottish scheme could not go ahead as planned next March despite glass not being included. And there had been widespread concern among many Scottish businesses about the way the DRS was implemented long before the UK government said it would not allow glass recycling to be included. The scheme would have seen a 20p deposit added to the price of single-use drinks containers sold in Scotland. The customer would then get that deposit 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.
The BBC has heard claims from sources close to Circularity Scotland that workers have not been paid a full month’s wages. However, Ms Slater told the chamber it was her understanding that staff had been paid for the work they have done. She said staff had also been offered support from Partnership Action for Continuing Employment – the government’s redundancy support service. Circularity Scotland’s official logistics service partner for the DRS project, Biffa, was set to open a state-of-the-art recycling facility in Portlethen in Aberdeenshire with the creation of up to 60 jobs.
The site was due to be operational this summer. However, it was deserted and gates closed on Tuesday afternoon. A recycling system might not seem like the obvious trigger for a showdown between governments. But the deposit return scheme – already rocked by delays and industry concerns – has become the subject of a furious dispute between ministers in Edinburgh and London. The Scottish government says the scheme has been scuppered by conditions set by UK counterparts; opponents say that is an excuse to cover for the fact the plans were unworkable. It has all come at a cost for the businesses which have invested in infrastructure and return points, and now at the expense of dozens of jobs at the firm set up to run the scheme.
A source close to Circularity Scotland said no rescue package or redundancy was available for staff, who haven’t been paid in full for the last month. And they said the firm had been caught in the crossfire between Westminster and Holyrood – which could have prevented the Scottish government from stepping in to help as they might with another firm. Later on Tuesday, Ms Slater survived a vote of no confidence in the Scottish Parliament over her handling of the DRS by 68 votes to 55. Former minister Fergus Ewing was one of those to vote against Ms Slater, with the SNP MSP saying business had lost confidence in the minister. He could face sanction for breaking the party whip, but the SNP has refused to comment on matters of internal discipline.
The motion was tabled by the Scottish Conservatives, whose MSP Maurice Golden said Ms Slater was “refusing to take any responsibility” for the collapse of the DRS. Speaking ahead of the vote, he said: “Circularity Scotland themselves, like the UK government and other stakeholders, were absolutely clear that the scheme could have remained viable and gone ahead without glass, but instead she pulled the plug. “The loss of jobs and the eye-watering sums invested – for which Scottish firms should be compensated – are entirely due to her stubborn and petulant decisions. “No minister who has failed on such a scale can possibly command any confidence and she must now go.”
