Circularity Scotland (CSL), the company set up to manage the Deposit Return Scheme (DRS) has called in the administrators and ceased trading, following theScottish Government’s decision to pause the scheme until 2025.
Blair Nimmo and Alistair McAlinden from Interpath Advisory have been appointed joint administrators
Yesterday Circular Economy Minister Lorna Slater told MSPs, “We have learned today that a process is under way is to appoint administrators to CSL [Circularity Scotland Ltd] leaving their staff in extremely difficult position.” However, she refused to take any responsibility for the failure, despite the fact it was the Scottish Government that paused the scheme on 7th June.
Instead Ms Slater blamed Circularity Scotland’s failure on conditions imposed by the UK government which included the exclusion of glass.
A claim refuted by the UK government with a spokesman saying the decision to pause the scheme was a decision made by the Scottish government.
Before the Scottish Government paused the scheme two weeks ago the Chief Executive of Circularity Scotland, David Harris, had said that, “a scheme without glass is both economically viable and is an opportunity for Scotland to provide a platform for a UK-wide DRS. Regrettably, further delaying the introduction of DRS will hinder Scotland’s progress towards net zero and mean that billions of drinks containers continue to end up as waste.”
Despite this clarification Lorna Slater revealed that the Scottish Government was indeed pausing the scheme until October 2025.
Scottish hospitality and drinks producers and wholesalers have consistently criticised the scheme for being overly complicated and poorly conceived.
Circularity Scotland, a not-for-profit business, had raised £100m of funding, however a statement from Interpath said, “While CSL was in active discussions with key stakeholders to secure additional funding, these negotiations unfortunately proved unsuccessful and so, after exhausting all other potential options, the company’s directors took the difficult decision to file for the appointment of administrators.”
Blair Nimmo, chief executive of Interpath Advisory and joint administrator, said, “The ongoing uncertainty surrounding the future launch of the Deposit Return Scheme prompted the Company’s backers to withdraw future funding, and as such, the directors were left with few options other than to seek the appointment of administrators.”
The joint administrators’ focus will now be on securing and realising CSL’s available assets, for the benefit of its creditors.
However, the issue of who now compensates businesses who have invested in infrastructure and return points is still to be addressed and Biffa, CSL’s official logistical service provider, which has invested £80m in the scheme, has not commented on the news.
Ms Slater also survived a vote of no confidence in the Scottish Parliament over her handling of the DRS by 68 votes to 55 yesterday.
Although the motion was tabled by the Scottish Conservatives former SNP minister Fergus Ewing also voted against Ms Slater, saying business had lost confidence in the minister.
MSP Maurice Golden 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.”
The joint administrators’ focus will now be on securing and realising Circularity Scotland’s available assets, for the benefit of its creditors.