Extract from Scottish Parliament topical question time: Circularity Scotland (Financial Position) - Jun 20
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Circularity Scotland (Financial Position) 2. Sarah Boyack (Lothian)
(Lab) To ask the Scottish Government, regarding any implications
for its Deposit return scheme, when it and its agencies were
informed of Circularity Scotland’s financial position, including
the company's reported need to send staff home. (S6T-01459) The
Minister for Green Skills, Circular Economy and Biodiversity (Lorna
Slater) We have learned today that a process is under way to
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Circularity Scotland (Financial Position) 2. Sarah Boyack (Lothian) (Lab) To ask the Scottish Government, regarding any implications for its Deposit return scheme, when it and its agencies were informed of Circularity Scotland’s financial position, including the company's reported need to send staff home. (S6T-01459) The Minister for Green Skills, Circular Economy and Biodiversity (Lorna Slater) We have learned today that a process is under way to appoint administrators to Circularity Scotland Ltd, leaving its staff in an extremely difficult position. That is an unforgivable consequence of the United Kingdom Government’s 11th hour intervention, which undermined—[Interruption.] The Presiding Officer (Alison Johnstone) Thank you, members. That intervention undermined our Deposit return scheme, made progress impossible and is now resulting in those jobs being lost. It is clear that this is a concerning time for staff at Circularity Scotland, and we have been in regular contact with it since the UK Government’s decision. I wrote to Circularity Scotland to thank its staff for their hard work to get to a position where the DRS was ready to launch in Scotland, and to express our deep regret that we are in this position. We continue to liaise with Circularity Scotland to consider how we may be able to support its staff, including providing partnership action for continuing employment—PACE—support, which is the Scottish Government’s initiative for providing advice and guidance to people at risk of redundancy. On when the Scottish Government knew that Circularity Scotland faced financial challenges, we warned the UK Government repeatedly that a failure to agree an exclusion to the United Kingdom Internal Market Act 2020 would jeopardise the scheme. At 9.45 pm on Friday 26 May, having first spent the day briefing the media, the UK Government informed us that it would grant only a partial, temporary and highly conditional exclusion. It was clear then the UK Government had torpedoed Scotland’s scheme. Minister, I have to ask you to conclude this response. We have a lot of interest in the topic. Since then, CSL has been working tirelessly to identify a viable business model to take it forward, and it has kept us informed throughout. Minister, we know that approximately 60 staff are sitting at home and are unaware whether they will be paid, while their chief executive is advertising them on LinkedIn as “60 Brilliant People Available for Roles”. In her answer to written question S6W-18398, the minister said that CSL has been “a trusted partner”. However, the minister told us, and we know from press releases, that Circularity Scotland said that the scheme could go ahead, so how should we view that now? Can the minister say that a company that acts like that and does not follow the regulations set by the Parliament to inform ministers and SEPA of material changes in circumstances is a partner that she and the Scottish Government is actually working with? How do we know what is going to happen next? The minister claimed last week that she did not know, even though we were all reading about it in the newspapers. As I said, there is a lot of interest in this topic, so I would be grateful for concise questions and responses. Circularity Scotland had confidence that the scheme could go ahead without glass. However, the matter that is pernicious and actually blocks the scheme is the unreasonable conditions that were placed at the same time that glass was removed. The member will recall that one of those conditions was that we matched the deposit level, which is a UK cap. The UK Government has not published its regulations or told us what that deposit level is. It is impossible for me to launch a Deposit return scheme when I cannot even tell businesses what the level of that deposit might be, which is why we were not able to go forward. Circularity Scotland will be appointing an administrator, and it will be for the administrator to decide how to move the matter forward. Under regulations agreed by this Parliament, a scheme administrator has to be able to subsist for a period of five years. If it cannot, it must inform ministers and SEPA of a change in circumstances, which could ultimately require the minister to withdraw approval. Does the minister have confidence that Circularity Scotland will be able to subsist for the entirety of the next five years, and what does “going into hibernation” mean? As I have just told Parliament, Circularity Scotland is entering into administration. It is appointing an administrator. The conditions for the appointment of the scheme administrator were valid at the time that that was done. The situation has changed in the past couple of weeks, since the 26 May decision by the UK Government. We are adapting, and Circularity Scotland is reacting to the situation that has been inflicted on us by the UK Government, which has changed its mind. Up until January this year, the UK Government was saying in writing that it was for devolved Administrations to decide on their Deposit return schemes. It changed its mind in May, at the last possible minute, and that is the situation that we are all now having to adapt to. Kevin Stewart (Aberdeen Central) (SNP) The situation is deeply regrettable, but the staff who are now losing their jobs at CSL are not the only victims of the UK Government destroying Scotland’s scheme. Circularity Scotland and its partner, Biffa, were also progressing a £7.7 million counting centre in Aberdeen and a similar facility in Motherwell. Can the minister say how many jobs and livelihoods have been destroyed by the UK Government’s decision to undermine Scotland’s scheme? Scotland’s Deposit return scheme would have created up to 500 new green jobs, including, as Kevin Stewart highlighted, in Aberdeen and Motherwell. We are in the very regrettable position that those new jobs are now at risk, with our DRS being unable to launch. The UK Government is clearly not interested in investment in Scotland, jobs in Scotland or respecting businesses in Scotland. Douglas Lumsden (North East Scotland) (Con) The Scottish National Investment Bank invested £9 million of public money in Circularity Scotland. Is that money now gone? The Scottish National Investment Bank is independent of Government, and ministers are not involved in the decision making at that bank. Its investments are a commercial matter between it and CSL, and are in confidence. Mark Ruskell (Mid Scotland and Fife) (Green) Scotland’s Deposit return scheme was getting ready to go live, create jobs and make our streets cleaner before it was recklessly blocked by the UK Government. When the minister met UK ministers to discuss their decision to impose unworkable conditions on our scheme, did they provide any reassurances that Scottish expertise and experience, a lot of which sits in Circularity Scotland, would be used to contribute to the development of a UK-wide scheme? I met the Minister for Environmental Quality and Resilience, Rebecca Pow, last week to discuss the implications and next steps for Scotland’s Deposit return scheme, and I urged her to meet Circularity Scotland as soon as possible to discuss how its expertise and experience could be used to deliver DRS across the UK in 2025. I also warned that, by not using that experience and without industry support, CSL would face imminent demise. Unfortunately, UK Government ministers have not followed that up, and no meetings between CSL and the UK Government have taken place. That clearly shows that this catastrophic UK Government is simply unwilling to take responsibility for its decisions and that it is not interested in Scottish jobs or Scottish businesses. Foysol Choudhury (Lothian) (Lab) At the Net Zero, Energy and Transport Committee meeting last week, the minister praised the expertise and experience of the approximately 60 staff who now have no idea whether they will be paid or have a job. Is the minister concerned about the impact that those job losses will have on the implementation of DRS? I am, of course, very concerned about the impact of the job losses on the people affected by them. However, it is telling that the producers, who fund Circularity Scotland, know that they will need to comply with a Deposit return scheme down the line. We have said 2025 because that is what the UK Government says. However, producers clearly have no confidence that the UK Government is able to meet that 2025 deadline, so they have pulled their support. Delivering the Deposit return scheme in 2025, which I absolutely hope we can do, is dependent on the UK Government passing its regulations, putting in place a scheme administrator, and doing all the work that we did in Scotland. Its fastest route to success would be to take on board the expertise that we have developed here, which includes the expertise at Circularity Scotland. Maurice Golden (North East Scotland) (Con) CSL faces going into needless administration, as a scheme could have launched next year if the Scottish Government had chosen to do that. Instead, the 60-plus staff are facing meaningless platitudes from the minister. [Interruption.] Let us hear the member, please. What support will be provided to those 60-plus staff facing redundancy? I am absolutely flabbergasted, Presiding Officer, at how the member can say that we can go ahead with the Deposit return scheme when he cannot tell me what the Tories in Westminster would set the deposit to. [Interruption.] Members—thank you. In addition, he can neither tell me what the fees to producers would be nor tell me what the return handling fees would be. [Interruption.] Let us hear the minister. If he cannot tell me those things, I cannot put together a viable business model for Deposit return in Scotland. That is impossible. As for the staff at CSL, it is my understanding that they have been paid for the work that they have done. We have offered support through PACE, which is the Scottish Government’s initiative for providing advice and guidance to people at risk of redundancy. Michael Marra (North East Scotland) (Lab) What an absolute disaster for those employees and for the country. We have two Governments that simply cannot work together. As a result, this Scottish Government’s incompetence has real consequences. With Circularity Scotland in administration now, will that inevitably mean that industry pays twice to implement a Deposit return scheme? I recognise the member’s statement that this is a disaster for those staff. However, I do not recognise the representation of two Governments working in the same way. At every point, the Scottish Government followed the common frameworks. We provided the advice and we set out what we were going to do. The UK Government changed its mind at the last minute. Between January and May, it changed what it was going to do. It broke out of the common frameworks process. It has not been working in good faith. It made those decisions—it imposed them on us—knowing, because I told them that it would be the case, that they would have catastrophic effects on our scheme. The member must not misrepresent what has happened here. We moved forward in good faith. We estimate that around £300 million of investment had been made and Scottish businesses were moving forwards. We had information technology systems, sorting centres and vehicles. The UK Government has not even got regulations. This is not a case of two Governments not working together; it is a case of our working very hard and the UK Government torpedoing us. |