The firm which was hired by the Scottish Government to run the deposit return scheme (DRS) has appointed administrators, it has been confirmed.
Lorna Slater, the Scottish Government’s minister for green skills, circular economy and biodiversity, told Holyrood on Tuesday that the collapse of Circularity Scotland was a “disaster” for its workers.
The company was in charge of the DRS, which has now been delayed until 2025.
It comes after Conservative MSPs successfully submitted a motion of no confidence against Slater on Monday.
Circularity Scotland (CSL) was established by a number of drinks companies in 2020 to help implement the DRS.
The firm said that, following the delay announcement, it was clear that CSL would be unable to meet significant contractual obligations without additional funding.
CSL ceased to trade immediately upon the appointment of the joint administrators Blair Nimmo and Alistair McAlinden from Interpath Advisory on Tuesday.
Their focus will be on securing and realising the company’s available assets, to benefit its creditors.
Mr Nimmo said: “The ongoing uncertainty surrounding the future launch of the Deposit Return Scheme prompted the company’s backers to withdraw future funding, and as such, the directors were left with few options other than to seek the appointment of administrators.”
Mr McAlinden added: “We are in the process of arranging a meeting with the employees to take place tomorrow morning to explain what the administration means for them.”
Funding for the firm was provided by various trade associations, which announced on Friday that they were withdrawing their support.
In a joint statement, the British Beer & Pub Association, British Soft Drinks Association and Scottish Retail Consortium 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 (CSL) 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.”
Scottish Greens environment spokesperson Mark Ruskell MSP said: “This is a significant and deeply frustrating development that will leave dozens of people looking for new jobs, undermine future investment, and erode trust in what any UK scheme might be able to achieve given it is the Tories that caused it to collapse.
“People will rightly question the role played by the Scottish Secretary Alister Jack in all of this, as well as the lack of climate leadership from his Prime Minister Rishi Sunak.
“Most significant though, is the sharp focus it has brought on the Tories’ commitment to using Westminster’s powers to undermine the Scottish Parliament and the devolution settlement.”
“The Scottish Greens will continue to push for real action over our environment and take on the Tories at every turn to do what is best for the people of Scotland, no matter how they try to frustrate progress on tackling the climate emergency.”
The UK Government said it will continue to work with the devolved administrations on a UK-wide deposit return solution.
A spokesman said: “Earlier this year the drinks industry raised concerns about the Scottish Government’s deposit return scheme 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.”
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