LARAC is calling on the UK Government to conduct an urgent review into the impact of the planned Deposit Return Scheme (DRS) on local authorities ahead of its introduction in October 2027.
The scheme will divert plastic and aluminium drinks containers, and glass drinks containers in Wales, away from kerbside collection systems and towards dedicated return points.
Drinks containers are among the most widely collected and valuable materials in household recycling. Although Defra’s 2024 Impact Assessment suggests that DRS will generate a saving of 69p per household for local authorities, LARAC believes the scheme could instead cost councils millions of pounds across the country through lost revenue, increased Material Recovery Facility (MRF) gate fees, Trading Standards enforcement, litter management and contract changes. Other issues LARAC has highlighted include the Impact Assessment’s reliance on composition and behavioural data dating back to 2016.
In its letter to DEFRA Minister, Emma Hardy MP, LARAC has called for four key actions from the UK Government:
1. Produce an updated, fit-for-purpose DRS Impact Assessment using current data to establish the likely financial and resource implications for local authorities.
2. Provide a financial mechanism to offset the lost income and additional costs faced by local authorities. This should be delivered 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).
3. Establish a formal monitoring and review framework involving local authority representation during the scheme’s initial years of operation.
4. Undertake a cumulative assessment of DRS, packaging Extended Producer Responsibility (pEPR) and Simpler Recycling in England to understand how these reforms interact and affect one another’s implementation and effectiveness.
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 DRS 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.
“If DRS is to be introduced successfully next year, the UK Government must act quickly. 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.
Local authorities must also have a formal role in monitoring and reviewing 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.”
Appendix Document can be found here (member login access needed)
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For further information please contact Toni McNamara, LARAC Executive Director, on 01982 382 650 / admin@larac.org.uk. Twitter: @LARACspeaks LinkedIn: www.linkedin.com/company/larac/
