ICSM Business News: Circularity Scotland goes bust owing creditors £86 million pounds leaving the workforce unpaid in a scandal that’s rocked the Scottish Government

By Harry Mottram: Norway does it, Sweden does it, Canada does it and even Australia does it. They and many other nations have refund bottle recycling schemes where consumers return their empty plastic and glass bottles for 20p or an equivalent sum. Just like we used to do back in the day in the UK when you got 2d back for a bottle of Corona. Except not in Scotland where a planned bottle recycling system has collapsed with a Government Hollyrood backed partner firm behind it appointing administrators this week. And before anyone points the finger at the Scots – England hasn’t even got a viable plan as yet to introduce a similar scheme.

Circularity Scotland responsible for running Scotland's Deposit Return Scheme (DRS) collapsed with debts and liabilities of more than £86m with preferential creditors unlikely to receive much out of the assets valued at around £2m. Biffa – a waste management firm that was to be contracted to run part of the scheme is owed an eye-watering £56m with German firm Reverse Logistics owed £5m. Circularity Scotland’s workers according to a string of media reports are owed a month’s wages and have lost their jobs before the DRS has got going – it was due to start this summer.

From California to Latvia Deposit Return Scheme have been running for years – and few people would dispute they are not a good idea as they cut down litter and are self-funding – but there’s a catch with the Scottish one and it’s called English-Scottish rivalry if we believe the Scottish Government minister in charge of the plans. Circular Economy Minister Lorna Slater has blamed regulations created by Westminster that made the DRS non-viable. The Scottish Conservatives point the finger at the ruling Green Party who are in government with the Scottish Nationalist Party (SNP), the Scottish administration point the finger at the UK Government for foisting extra regulations at the last minute on the scheme and everyone blames the Green Paty’s MSP Slater for not seeing the problems coming and allowing Circularity Scotland to run up huge debts. It’s a mess and as always, it’s the creditors, lenders and workers who pay the price.

Ian Carrotte of ICSM said it was a tragedy as in many countries the same scheme runs well and there is universal support for the principle. He said: “There is always an element of concern when councils and indeed Governments get involved in running businesses or working with partner companies. Remember what happened to Bristol Energy or to the councils in Thurrock, Croydon and Woking. They naively pumped millions of council tax payers’ cash into ill-starred firms that went belly up. For potential suppliers of these type of council funded schemes – caution is the word.”

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