CIRCULARITY Scotland (CSL) looks set to collapse after the industry backers of the body pulled their funding, blaming "political uncertainty."

It emerged on Thursday that the body, set up to administer Scotland's Deposit Return Scheme, had sent home staff and warned them that they may not be paid for the rest of the month unless their stakeholders agreed to fund a "hibernation" until the delayed scheme launches in October 2025. 

However, the British Beer and Pub Association, the British Soft Drinks Association and the Scottish Retail Consortium have all said that they "don’t have the confidence required to provide further voluntary funding for the company."

READ MORE: Deposit Return Scheme: Circularity Scotland on brink of collapse

In a joint statement, the three business groups said: "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. Sadly, a high degree of political uncertainty has now disrupted plans and timings, putting the future of Circularity Scotland Limited at risk.

“Given this ongoing political uncertainty we don’t have the confidence required to provide further voluntary funding for the company.

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



The delay to the DRS was announced by Lorna Slater last Wednesday, with the Circular Economy minister, saying that had been "left with no other option" than to push back until October 2025 "at the earliest" because of conditions imposed by the UK Government.

Earlier this month, UK ministers made clear the Scottish Government would only be given the necessary exemption to the UK Internal Market Act if they made a number of substantial changes.

This included removing glass from the scope of the scheme and a demand that ministers in Edinburgh agree to standardise the deposit charge and labelling with the other UK schemes.

Last week, Ms Slater said the lack of detail around conditions laid down by Whitehall, including not knowing what the deposit charge would need to be, meant the scheme could not go ahead as planned.

That was despite CSL insisting that the scheme could go ahead next March despite the UK Government's demands.

In an email to staff, obtained by the Daily Record, bosses at the not-for-profit firm said they were proposing that the company "exist 'in hibernation' until the Scottish DRS launches in October 2025."

The notice continued: “If stakeholders agree to fund this proposal, all employees would be at risk of redundancy and a consultation period would begin.

"In this scenario, it is likely that the company would be able to pay June salaries, any outstanding holiday pay and pay in lieu of notice to those made redundant.”

The firm added: “If stakeholders do not agree to fund this proposal, Circularity Scotland may go into administration. If the company becomes insolvent it may be unable to pay contractual monies due to employees - including June wages.”

READ MORE: Deposit Return Scheme delayed until October 2025 at the earliest

Speaking to the PA at the British Irish Council meeting in Jersey, Humza Yousaf said CSL's difficulties were the fault of the UK Government. 

“Unfortunately, Circularity Scotland find themselves in a difficult position because of the eleventh hour intervention of the UK Government.”

He said that the Scottish Government had “made the point that that intervention would undoubtedly be damaging not just to the deposit return scheme but to Circularity Scotland too,”

The First Minister added: “We know that a separate Scottish scheme can’t go ahead, but of course we’re looking to align with the UK scheme in October 2025, that’s the date the UK Government have provided.

“So I think it would be important to make sure Circularity Scotland continue, to make sure industry in Scotland is ready for when that scheme comes into place.”

Scottish Conservative MSP Maurice Golden said the blame lay firmly with the Scottish Government. He said the statement from the drinks producers "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 CSL while Lorna Slater’s shambolic Deposit Return Scheme is on hold.

“The blame for this almighty mess lies squarely at the door of the inept circular economy minister.

“From day one, Lorna Slater refused to engage with businesses who warned her that her flawed scheme was unworkable, and stubbornly ploughed ahead with it.

“She ignored their pleas for a UK-aligned scheme and only applied for a UK internal market act exemption at the eleventh hour, despite having known for years that it was a necessity.

“Then she decided to delay DRS for a further two years when Circularity Scotland made it perfectly clear that it could go ahead with glass being excluded.

“Scottish businesses are due compensation for the heavy losses incurred due to her rank incompetence.”