BUSINESSES have been left with bills of more than £86million by the collapse of the firm overseeing the Scottish Government’s flagship recycling project, it has emerged.
The scale of the financial wreckage left by the Deposit Return Scheme (DRS) is laid bare in a report filed by the administrators of Circularity Scotland Ltd, which went bust in June.
The Tories said the Green minister in charge, Lorna Slater, had been “astonishingly inept”.
The Statement of Affairs lodged at Companies House last week shows the firm, which was set up to manage the DRS at arms length from ministers, had realisable assets of £2.1m.
However it owed staff, its bank, the taxman and dozens of businesses more than £86.1m.
Unsecured creditors, who are owed up to £78.6m, are likely to get nothing.
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They include the waste management firm Biffa, which is owed £65m for its outlay preparing for the DRS, while Germany’s Reverse Logistic Group is owed £5m for work on IT.
Supermarkets and drinks manufacturers that paid into the industry-run scheme are also set to lose around £6m, with the brewers behind Tennent's, Budweiser and Heineken each owed almost £450,000, and Perthshire’s Highland Spring owed £130,000.
The British Soft Drinks Association is owed more than £3m, HMRC is owed £38,766, and 38 of Circularity Scotland’s staff and former staff are owed £1.1m, including one due £344,611.
The state-owned Scottish National Investment Bank also gave Circularity Scotland a £9m grant using taxpayers’ money which could all be lost.
The Scottish Government has refused to pay compensation, blaming the UK Government for imposing restrictions on the DRS that delayed it so long Circularity Scotland collapsed.
The full figures, reported by the Scottish Mail on Sunday, led to renewed criticism of Ms Sater, the minister in charge of the DRS and co-leader of the Scottish Greens.
Tory MSP Maurice Golden said: “We knew the handling of the Deposit Return Scheme had been a catastrophe but these staggering sums make the scale of the disaster apparent.
“The most appalling thing is the scheme’s principles had general support, and it is only the astonishingly inept way Lorna Slater introduced the legislation, refusing to listen to any concerns or warnings, that led to it falling apart.
“Now hundreds of firms are paying the price. Yet while others have lost their jobs thanks to the Green minister’s incompetence and obstinacy she, incredibly, is still in post.
“If the Scottish Government gets involved in financial reverie, who knows where that money will come from, other than the taxpayer.”
The DRS was intended to improve recycling rates for drinks cans and bottles by charging a refundable 20p deposit on each container, with empties returned to stores.
For months, Green minister Lorna Slater had maintained that, despite business concerns, the DRS would go live in mid-August.
But the UK Government imposed restrictions on its scope under the Internal Market Act designed to harmonise trade within the UK, barring it from including glass.
That prompted the Scottish Government to delay the DRS until at least late 2025, leaving Circularity Scotland unable to carry on as industry bodies refused to keep funding it.
In June, Circularity Scotland went into administration with the loss of up to 60 jobs.
Scottish Labour finance spokesman Michawel Marra said: “The SNP-Green Government ‘s bungled Deposit Return Scheme has left businesses out of pocket, workers out of a job and recycling rates as low as ever.
“There are still huge questions over whether taxpayers could end up footing the bill for this fiasco. It is astonishing that Lorna Slater is still responsible for fixing the mess shae made of this scheme.
“This dysfunctional SNP-Green government must come clean about what the collapse of Circularity Scotland me4ans and how they will deliver a recycling scheme that works.
Biffa said: “We continue to review our position and have no further comment at this time.”
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The Scottish Government said: “The UK Government’s eleventh hour intervention has left us no choice but to postpone the launch of the deposit return scheme.
“We are grateful to businesses for the investment made.
“The Scottish Government remains committed to the delivery of a successful scheme and the investment made to date can be utilised in the future.
“We do not consider the action we have been required to take gives rise to any obligation to pay compensation.”
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