Circularity Scotland, the company charged with implementing Scotland’s deposit return scheme, appears to be on the verge of collapse.

The non-for-profit said that, following the decision to delay DRS in Scotland until October 2025, it could not confirm whether its staff would be paid this month.

It said it was “working tirelessly” to try and “find a way for the business to continue to operate”.

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, 8 June.”

The spokesperson continued: “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.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData

“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.”

An email reportedly seen by The Daily Record, however, paints an even bleaker picture of Circularity Scotland’s situation.

According to the email, the company reportedly wishes to mothball itself until October 2025, putting all its 50 staff at risk of redundancy.

“If stakeholders agree to fund this proposal, all employees would be at risk of redundancy and a consultation period would begin,” the email was quoted as saying. “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.”

If existing in hibernation until next autumn is not a viable option, the email reportedly said Circularity Scotland may go into administration.

It added: “If the company becomes insolvent it may be unable to pay contractual monies due to employees – including June wages.”

Circularity Scotland declined to comment on the email when approached by Just Drinks.

The organisation was set up in 2021 as a not-for-profit company to administer Scotland’s DRS, which was to be funded by drinks producers.

The decision to postpone the implementation of DRS in Scotland has been welcomed by much of the drinks industry but has left some companies that had invested in preparing for the scheme to go live in March 2024 unhappy.

Members of the British Soft Drinks Association (BSDA) are said to among those be pushing for financial reparations, although Holyrood said it was yet to receive any such requests for compensation.

The Scottish government said it had been left with little choice but to further delay the implementation of DRS, after the UK government said the scheme could only go ahead in March 2024 with the exclusion of glass.

In a statement to Just Drinks, circular economy minister Lorna Slater said: “As a direct consequence of the eleventh hour decision by the UK Government to impose unworkable conditions on Scotland’s Deposit Return Scheme, we were no longer able to proceed as planned. 

“I have written to Circularity Scotland to thank their staff for their hard work to get to a position where the Deposit Return Scheme was ready to launch in Scotland and to express our deep regret that we are now in this position. 

“Circularity Scotland is a not-for-profit company led and funded by industry, and it would not be appropriate for the Scottish Government to fund it. Deposit Return will still go live in Scotland, and across the UK, in 2025, so it is in industry’s interest to preserve the expertise and skills that Circularity Scotland has built up.”