Deposit Return Schemes (DRS) are scheduled to launch across the UK in October 2027 and present big opportunities for local authorities.

The DRS schemes respond to huge public demand for action on plastic waste which pollutes our beaches, streets, and local green spaces. It follows the success of more than 50 others around the world, including the Republic of Ireland, which after launching in February 2024 recently passed a milestone of two billion containers returned.

Coastal local authorities will be particularly aware of the challenge of dealing with litter on our beaches, which has a detrimental impact on both resident well-being and the visitor experience. At Reloop, we recently analysed International Coastal Cleanup data from over 80 countries for our ‘Littered with evidence’ report and found that, on average, the proportion of drinks items in the litter stream was 54 per cent lower by count in areas with a deposit return scheme.

Indeed, no other policy can boost recycling of a product to above 90 per cent and reduce its littering by 85 per cent, with widespread industry support and industry funding.

However, with many councils facing extremely challenging budget decisions, including concerns over the potential impact of the upcoming inclusion of Energy from Waste emissions in the UK Emissions Trading Scheme, it is understandable that there are questions about the financial impact of DRS.

It will hopefully offer some reassurance that colleagues assessing local administrations across the world report that DRS offers potential financial benefits and clear improvements to resident well-being. How have I come to this conclusion?

Firstly, DRS helps reduce the financial and operational burdens associated with processing beverage containers at Materials Recovery Facilities. These materials, while valuable, are prone to contamination and wear when handled through single-stream kerbside recycling systems. This not only lowers their market value but also increases the cost of sorting and processing. By diverting deposit-eligible containers away from the kerbside stream and into a dedicated return system, a DRS significantly lowers contamination rates and improves the quality of collected materials. Cleaner, source separated containers are thus easier and cheaper to process, improving overall system efficiency and reducing the cost burden on local authorities.

Secondly, there is the significant benefit of reduced litter. In the UK, the litter cost attributed to local authorities of beverage containers is estimated by WRAP to be £153 million, representing 26 per cent of overall litter clean-up costs. While hard to quantify, the Government’s previous Impact Assessment valued the reduction of disamenity from litter at an £11bn benefit for society. We have seen this play out in Ireland where Coastwatch Ireland’s annual marine litter survey has recorded the lowest bottle and can counts in 25 years, with bottles per kilometre declining from a peak of 100 in 2010 to below eight in 2024.

Third, there is the income from unredeemed deposits. Local authorities can benefit by separating any deposit containers that do end up in household waste and public litter bins – which they will still be collecting - and redeeming the deposits on them. A proposal for producers to compensate councils via the packaging EPR fund was rejected to avoid double-paying for the same material. As a rough example, there are 77,000 can units per tonne which at 20p deposit equates to roughly £15,000 a tonne post-DRS if the Local Authority can sell these back to the Deposit Management Organisation.

Fourth, costs of DRS cannot be assessed in isolation without factoring in the impacts of EPR for packaging. Any loss to councils in recycling revenue should also factor in the contribution of payments from producers to support local authority recycling.

Fifth, I would note the uncertainties in modelling financial costs for DRS as councils will adapt their existing operations when bottles and cans are redirected from the waste stream. Savings can be delivered by on route optimisation, streamlining services, or contract renegotiations.

This analysis therefore contrasts with Valpack’s recent assessment for the Local Government Association which I believe takes an overly negative view on the overall impacts to local authorities. Eunomia has previously assessed the benefits of DRS for local authorities and found savings linked to residual waste requiring less treatment, along with the possibility of reduced MRF costs and potential efficiencies in collection and street cleaning costs.

I commend those who, like West Suffolk Labour councillor Janne Jarvis, have enthusiastically got behind DRS. Councillor Jarvis created a local scheme that is akin to DRS, where Reverse Vending Machines have helped over 16,000 bottles and aluminium cans get recycled in Newmarket, Suffolk. Customers are rewarded with points which can be redeemed at retailers or spent on local businesses.

I will always advocate for sufficient Government funding for local authorities which are the backbone of our waste and recycling system. It is through their innovation and hard work in communities across the country that we will truly deliver a circular economy. With a well-functioning DRS supporting this transition, we can deliver the benefits to residents of cleaner streets, unpolluted natural spaces, and world class recycling rates.