THE company behind Scotland's delayed Deposit Return Scheme (DRS) is at risk of collapse, a leaked email has indicated.
Following a dispute between the Scottish and UK Governments over whether the scheme should include glass, Scotland's initiative – which was due to launch in March – had to be put back to at least October 2025.
According to the Daily Record, this delay appears to have plunged Circularity Scotland – a not-for-profit company set up to ensure the smooth roll out of the DRS – into crisis.
An insider told the paper that staff were sent home on Thursday last week and employees are scared they may not get paid.
An email has also painted a concerning picture as it suggests the firm could either exist "in hibernation" until the DRS launches or go into administration.
If stakeholders agree to fund the former plan, it would put all employees at risk of redundancy and a consultation period would begin, the email said.
But if they did not agree, Circularity Scotland would go into administration.
“We have proposed a route to members which could allow Circularity Scotland Ltd to exist 'in hibernation' until the Scottish DRS launches in October 2025," the email said.
“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.”
The email said it anticipated the outcome of these talks would be known early next week.
Under the DRS, shoppers would pay a 20p deposit every time they buy a drink in a can or bottle, with that money refunded to them when the empty containers are returned for recycling.
A spokesperson for Circularity Scotland said: "The board of Circularity Scotland have been working to manage the impact of the Scottish Government's announcement and find a way for the business to continue to operate.
"While this work is ongoing, we instructed staff to go home on Thursday, June 8.
“The unfortunate reality is that, at this point, we are not able to confirm whether our staff will be paid for this month or whether they will be able to return to the office.
"The board recognises that this is an extremely difficult time for our people and is working tirelessly to find a solution. We have remained in communication with our staff throughout and will provide updates to them at the earliest possible time.”
Last week, First Minister Humza Yousaf said he had spoken to leaders in the drinks industry following the decision to delay the DRS.
He said they had all agreed to take a “pragmatic approach” towards supporting Circularity Scotland in the months and years ahead.
The Conservatives blamed the Scottish Government for the uncertainty over Circularity Scotland’s future.
Tory MSP Maurice Golden said: “The SNP and Greens who have botched this scheme from the outset must have known this could happen.
“Now their inexcusable failure means good people face losing their jobs through no fault of their own.
“The Scottish Government has shrouded Circularity Scotland and the wider process in secrecy, and this is what happens when proper scrutiny and accountability cannot be applied.
“A deposit return scheme could have been launched in Scotland next year with the support of business and consumers, but the SNP-Green Government preferred to pick a fight with the UK Government instead.”
A UK Government spokesperson added: “The operation of Circularity Scotland is a matter for them and the Scottish Government.
“Earlier this year the drinks industry raised concerns about the Scottish Government’s DRS differing from plans in the rest of the UK.
“The UK Government listened and worked at pace to accept the Scottish Government’s request for a UK Internal Market (UKIM) exclusion on a temporary and limited basis to ensure the Scottish Government’s scheme could proceed while aligning with planned schemes for the rest of the UK.
“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.
“Delaying the Scottish scheme was entirely a decision made by the Scottish Government.”
