The minister in charge of Scotland’s Deposit Return Scheme (DRS) could not say if funding for it from the Scottish National Investment Bank (SNIB) will be returned after the firm set up to run the recycling initiative called in administrators.
Circularity Scotland received £9m from the SNIB, but Lorna Slater said that as it is independent of the Scottish Government, ministers have no say in what will happen to the cash.
In evidence to the Economy and Fair Work Committee on Wednesday, SNIB chair Willie Watt told MSPs a “significant” sum of the loan could be lost, before admitting the bank faces losing its full investment.
“We don’t know exactly what that impact will be, but I think it’s fair to say there will be significant losses on the loan that we have made to Circularity Scotland and we will report those losses once we know what they are.
“I’m sure that the losses will be in excess of over 50%, but I hope that they are less than 100%.”
When asked by Conservative MSP Graham Simpson if the whole £9m could be lost, Watt conceded: “Yes, we could, that is the truth.”
Watt denied that Scottish ministers influenced the investment bank’s decision to fund Circularity Scotland, adding: “We make all of our decisions totally independent of the Scottish Government; we are a fiercely independent institution.
“There was no involvement from the Scottish Government in our decision to make the loan.”
However he said the lenders took “comfort” from ministerial statements which committed to the scheme.
Meanwhile, Slater also refused to say if former rural economy secretary Fergus Ewing should be sanctioned by his party, after he voted against her in a motion of no confidence at Holyrood on Tuesday.
The Scottish Greens are junior partners with the Scottish National Party in the Scottish Government as part of a deal which saw Slater and fellow co-leader Patrick Harvie become ministers.
Ewing, a vocal critic of the DRS, voted against Slater, insisting she “does not enjoy the confidence of business”.
Slater dismissed the motion of no confidence - which she survived by 68 votes to 55 - as a “stunt by the Tories”.
Asked if Ewing should face sanctions for going against his party and voting for the motion, the minister said simply: “Those are internal matters for another political party.”
The no confidence motion was lodged by Liam Kerr and supported by his Conservative colleagues, as well as Labour and the Liberal Democrats.
Meanwhile, she told BBC Radio Scotland’s Good Morning Scotland programme that Circularity Scotland’s decision to call in administrators was “absolutely a disaster” for its 66 employees.
The company had been set up to run Scotland’s DRS, a recycling initiative which imposes a refundable deposit on drinks sold in cans and bottles.
But the Scottish Government has delayed the scheme’s launch again, pushing it back from March 2024 to October 2025 at the earliest.
That came after the UK Government said the Scottish DRS could not include glass bottles, and that the deposit charged on cans and bottles must be the same in Scotland as in England – where the deposit level is still to be determined.
Slater said: “The interference that we have had from the Conservative government at Westminster to torpedo our scheme has had these negative consequences for Scottish businesses, for Scottish workers, and of course or flagship recycling scheme.
“The decision to stop the scheme was because the UK Government had put us in an impossible position.”
Asked what will now happen to the cash from the SNIB, Slater said: “The investment decisions of the Scottish National Investment Bank are for them, they are independent of government and they make their own decisions about that investment.”
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