The big local authority funding gap: DRS, delays and pEPR


Local authorities

LARAC Chair Cathy Cook explains her significant concerns about funding and operational challenges after the UK government delayed England’s Deposit Return Scheme until 2027.

The UK government’s decision to delay the Deposit Return Scheme (DRS) until 2027 has raised significant concerns among local authorities.

The delay crosses problematically with the upcoming packaging Extended Producer Responsibility (pEPR) payments set for 2025, creating a critical funding gap for materials intended to be covered by DRS.

This scenario places a heavy burden on local authorities, both financially and logistically.

The call for producer responsibility

extended producer responsibility

LARAC welcomes the extension of financial support for local authorities. Still, we are disappointed that funding for DRS materials will continue to rely on central government grants rather than shifting to the EPR scheme.

The delayed implementation underscores the need for a framework where producers are financially responsible for all product packaging, aligning with the Polluter Pays Principle.

DRS and EPR schemes aim to transfer the financial responsibility of waste management from the public sector to producers.

However, the delay leaves local authorities managing waste without adequate financial support from producers.

LARAC advocates for producers to shoulder the economic responsibility for DRS packaging from the start of EPR implementation in 2025.

DRS limitations: Preparing for the future


The limitations of DRS are well-documented. According to the 2023 Update report by ACR+, DRS focuses primarily on recycling, often neglecting the more sustainable reuse option.

True circularity in packaging requires a comprehensive system integrating reusable packaging and efficient recycling networks.

Moreover, while DRS can reduce litter, it cannot address all litter issues or legacy pollution. Significant knowledge gaps and the need for robust data are apparent in understanding DRS impacts.

LARAC firmly advocates for deferring the DRS until EPR and Simpler Recycling have been given time to take effect.

This deferral will also allow for thorough research into a potential digital DRS in the UK. LARAC sees promise in a digital DRS utilising existing kerbside and bring-back collection infrastructure to be more cost-effective and to leverage current systems more efficiently.

Early results showed that a digital DRS could reduce costs for producers while enhancing material quality.

LARAC is also sceptical of the traditional RVM-based DRS as expensive and redundant, advocating for a modern, integrated approach.

Practical challenges for local authorities

Recycling Collection

Once operational, the DRS presents practical challenges for local authorities. Uncertainty persists regarding how materials that end up in kerbside collections will be funded.

Extracting these materials from waste streams, ensuring they are suitable for deposit redemption, and reintegrating them into the DRS system is complex.

Items collected in refuse collection vehicles (RCVs) are often of poor quality, with damaged or unreadable barcodes, making deposit redemption unlikely.

Even if logistics could be managed, there is yet to be a transparent process for local authorities to reintegrate these items into the DRS.

This ambiguity means local authorities might manage these materials without compensation, contradicting EPR principles.

This situation imposes a financial burden on local authorities and undermines the goal of ensuring producers bear the economic responsibility for the packaging waste they create.

In response to the 2021 consultation, LARAC members preferred a system based on compositional analysis rather than trying to redeem deposits themselves.

This option was not supported and viewed as unwieldy and largely unworkable.

Over 3 years later, we are still none the wiser as to how the DMO (once it is set up) will deal with this shortfall.

Looking forward: A comprehensive strategy

Cathy Cook
LARAC Chair Cathy Cook.

The situation calls for a robust framework that ensures producers are fully responsible for the environmental costs of their products from the outset.

LARAC’s lobbying for this responsibility highlights the urgency of aligning financial burdens with the origins of waste.

Enhancing the focus on reuse over recycling, improving circularity, and addressing litter problems comprehensively are essential steps.

Still, all of this comes at a cost, and it is high time that producers start to foot the bill.

Final thoughts: Overcoming implementation challenges for EPR and DRS systems

The delay in implementing DRS amid pEPR underscores significant funding and practical challenges for local authorities.

While extending government support funding offers temporary relief, it does not fulfil the long-term vision of making producers pay for their products’ lifecycles.

A clear, actionable plan encompassing financial, operational, and environmental strategies is essential to uphold EPR principles and enable a sustainable packaging waste management system.

The appointment of a Deposit Management Organisation (DMO) should prioritise these issues and offer viable solutions for a smooth transition to an effective system.

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