The Local Authority Recycling Advisory Committee (Larac) has called for an urgent review of the planned UK Deposit Return Scheme (DRS) ahead of its introduction in October 2027.
The scheme will divert drinks containers made from plastics and aluminium, as well as glass drinks containers in Wales, from kerbside collection systems to dedicated return points.
Drinks containers are among the most widely collected and valuable materials in household recycling. Defra’s ‘2024 DRS Impact Assessment’ estimated that the scheme would save local authorities 69p (93 cents) per household annually, but Larac said councils could instead face significant additional costs.
The organisation highlighted potential costs from lost revenue from valuable materials, higher materials recovery facility (MRF) gate fees, Trading Standards enforcement, litter management and changes to collection contracts.
Behavioural data
It also questioned the use of composition and behavioural data dating back to 2016 in the impact assessment.
Gareth Rollings, Larac chair, said: “While some of the gaps in Defra’s ‘2024 Impact Assessment’ may reflect the limited evidence available at the time, its failure to account for factors likely to increase costs for local authorities and the wider waste sector is extremely concerning.
“The suggestion that councils will achieve savings through DRSs does not reflect the financial and operational consequences they expect when the scheme goes live.
“We anticipate substantial additional costs through increased MRF gate fees, lost income from valuable materials, Trading Standards enforcement, litter management and other operational pressures. The most recent impact assessment does not adequately account for these consequences.”
Impact assessment based on current data
In a letter to Emma Hardy, minister for state at the Department for Environment, Food & Rural Affairs, Larac called for the UK government to produce an updated impact assessment using current data to establish the likely financial and resource implications for local authorities.
It also called for a financial mechanism to offset lost income and additional costs, through the New Burdens Doctrine in England and equivalent funding arrangements in Wales, Scotland and Northern Ireland, or through an appropriate share of unredeemed deposits held by the Deposit Management Organisation (DMO).
“If the DRS is to be introduced successfully next year, the UK government must act quickly,” said Rollings.
“We need an updated impact assessment based on current data, alongside financial arrangements that protect local authorities from the costs of the scheme. This should include consideration of unredeemed deposits, which will be directly linked to the scheme’s performance.”
Formal monitoring and review
Larac also called for a formal monitoring and review framework involving local authority representatives during the scheme’s initial years of operation.
“Local authorities must also have a formal role in monitoring and reviewing the DRS once it is operating, including how it interacts with packaging Extended Producer Responsibility, Simpler Recycling and the wider system of waste and recycling reforms,” Rollings said.
Larac said the government should also undertake a cumulative assessment of the DRS, packaging Extended Producer Responsibility (pEPR), and Simpler Recycling in England to understand how the reforms interact and affect their implementation and effectiveness.
The concerns come as Exchange for Change, the trading name of the UK DMO, continues preparations for the scheme’s introduction.
On 8 September, it launched a monthly survey of retailers to assess their readiness for the DRS, while also announcing extended exemption criteria giving more retailers the opportunity to apply for an exemption from operating a return point.
