Circulating Value: Maximising UK's Economic Potential Through a Circular Economy

Sam Coggin • August 5, 2023

The Circular Economy in the UK: Potential Benefits and Key Challenges

For more than a decade, the Green Alliance and various business partners have been accumulating a wealth of evidence highlighting the importance of a circular economy. A circular economy offers a myriad of solutions to several problems faced by the UK, from environmental risks to economic challenges.


Traditionally, our economy has operated in a linear 'take, make, use and throw' fashion. Materials are extracted, goods are produced, sold, used, and eventually discarded, often after a very short lifespan. However, a circular economy could revolutionise this trajectory. In a circular economy, materials and products are kept in use for as long as possible through reuse, repair, remanufacturing, and recycling, preserving their highest value. This model reduces raw material consumption and mitigates the negative impact associated with waste generation.


A circular economy provides immense benefits. It lowers climate and environmental risks by reducing carbon emissions and minimises impacts on biodiversity, water, and air pollution. It also builds business resilience by reducing reliance on raw materials, three quarters of which are supplied from abroad.


Perhaps more significantly, it holds substantial potential for economic growth. Studies suggest that adopting a more circular economy could lead to significant growth in the UK, potentially increasing GDP by nearly one per cent by 2035 and contributing as much as £82 billion in gross value added by 2030. Additionally, it could support over 470,000 jobs across the country, particularly in sectors projected to face high rates of unemployment by 2035.


Moreover, a circular economy could help us wrestle control over material flows and prevent value from being lost, a priority already identified within the critical minerals supply chain, which faces numerous geopolitical challenges.


However, to realise this potential, government intervention is vital. It is recommended that the government prioritise a circular economy, integrating it as a crucial aspect of its industrial policy, and that the Treasury spearhead this change, given its role in coordinating government policy and overseeing tax and spending responsibilities.


To move circular business models from the fringes to the mainstream, government support is crucial. For instance, levelling the playing field between circular and linear businesses, offering financial assistance through a dedicated fund to support circular businesses facing high upfront costs, and improving understanding of tax impacts to meet environmental goals can all aid in making the shift.


Notable examples of businesses making strides towards a circular model include John Lewis, which operates several circular initiatives including furniture rental and circular design training, and IKEA, which offers a buy back and resell programme for old furniture, along with free small spare parts to extend product lifetimes.


However, transitioning to a circular economy is not without its challenges. One of the main barriers is the market preference for cheap, poor quality, easily accessible goods, which often come with substantial environmental costs not reflected in their price.


Which brings us to the topic of office furniture. It may seem a small detail in the grand scheme of a circular economy, but it exemplifies how circularity can benefit businesses and consumers alike. A desk or an office chair has a far longer potential lifespan than the time it spends in any one office. By creating a market for high-quality, reusable office furniture, businesses can reduce their environmental footprint, save money, and foster a sustainable approach to resource consumption. This is just one of the many ways in which the principles of the circular economy can be put into practice in everyday business operations.


The circular economy presents an exciting opportunity to enhance the UK’s economic resilience, reduce environmental impact, and create new jobs. However, it will take concerted effort from businesses, consumers, and the government to realise its full potential. Through the implementation of policies that promote circular business models, and the support of businesses taking the leap towards such models, the UK could significantly advance towards a sustainable and prosperous future.


Key Insights:


  1. Economic Potential: The circular economy represents a significant opportunity for economic growth. Estimates suggest it could boost the UK's gross value added by £82 billion by 2030, increasing GDP and creating numerous skilled jobs.
  2. Environmental Benefits: Adoption of circular practices would lead to reduced raw material consumption, waste prevention, and lowered environmental impacts related to production.
  3. Social Benefits: Increased affordability, community engagement, and job creation are critical social benefits linked with circular practices like resale and repair.
  4. Barriers for Businesses: Several challenges like disproportionate VAT taxation, poor circular logistics, and short lifetimes of poor-quality goods hinder businesses from adopting circular models.
  5. Barriers for Consumers: Cultural inertia, stigma associated with second-hand items, and concerns about convenience and high cost act as barriers to consumer adoption.
  6. Wider Economic Impacts: While circular economy fosters growth, it poses risks like the ‘rebound effect.’ Countries dependent on raw material export might lose out, demanding knowledge-sharing and assistance.


How the Treasury Can Help:


Level the Playing Field:

  • Change VAT: Encourage repair by zero rating it and adjusting VAT on other items to make circular practices more attractive.
  • Give Leasing Businesses Access to Tax Relief: Amend regulations to make leasing businesses eligible for tax relief schemes.


Provide Financial Assistance:

  • Dedicated Fund: Establish a fund (e.g., £800 million) to support and kickstart circular businesses and create infrastructure for circular logistics.


Understand the Impacts of Tax:

  • Environmental Impact Assessment: Understand how tax measures influence behaviour and environmental goals.
  • Engage with Public and Businesses: Address public concerns early on, understanding the complex motivations behind consumer choices, and remove structural barriers to change.


The push towards a circular economy in the UK is both a promising opportunity and a complex challenge. The potential economic, social, and environmental benefits are significant. However, achieving them requires concerted effort to overcome barriers, adjust taxation policies, provide financial support, and engage in continuous learning and dialogue with stakeholders.


The role of the Treasury, along with cross-governmental collaboration, is paramount in unlocking the potential of the circular economy. The outlined strategies and interventions provide a roadmap for leveraging this untapped economic opportunity and making a transition to a sustainable, efficient, and inclusive circular model.

Did you find this article interesting? Continue that interest and contact us today to learn more.

Beyond Recycling: The Role of Office Furniture in a Truly Sustainable Economy

By Ida Gorecka • August 7, 2025
If you're here, you're probably managing a lot. A relocation, a refurbishment, or a growing ESG brief. Maybe you’re under pressure to meet sustainability targets, stay on budget, and deliver results your team and clients can actually see. And right now, office furniture might not be on your radar. But it should be. In most organisations, furniture is still treated as an afterthought. It’s functional, it’s bulky, and when it’s no longer needed, it’s often sent straight to landfill. But here’s the truth: when you start thinking of office furniture as a strategic asset within the circular economy , everything changes. For your budget . Your carbon reporting . Your project timelines . Your reputation . This article is for you if you’re tired of defaulting to skips. If you want smarter ways to meet ESG goals without blowing your budget. If you’re ready to make office sustainability a measurable advantage - not just a checkbox. We’ll show you just how much office furniture is wasted each year, what it’s really costing your business, and how the circular economy can apply directly to your projects. You’ll learn how organisations like yours are saving thousands, avoiding skips entirely, and turning unwanted furniture into reportable ESG wins - plus practical steps to get started today. Curious what your office clearance could be worth? Get in touch with our team for a free circular furniture audit.

Why Buying Cheap Costs More: The Long-Term Value of Quality Refurbished Furniture

By Ida Gorecka • July 30, 2025
You’re in the middle of planning an office space. Budgets are tight. Lead times are short. It’s tempting to type “cheap office chairs” into your browser and find something that fits the spreadsheet. But here’s the problem: cheap furniture is rarely cheap in the long run . The market is saturated with budget desks, chairs, and storage that look good online, but fall apart in practice. And when they do, they cost more - more to replace, more to dispose of, more to fix (if that’s even possible), and more in lost time and productivity. It’s a vicious cycle that undermines your budget, timeline, and any potential ESG goals. According to WRAP , the UK disposes of over 200,000 tonnes of office furniture every year - much of it barely used. When furniture fails quickly, so does your investment. In a commercial setting, that failure shows up in missed deadlines, spiralling budgets, and sustainability goals slipping out of reach. So before you hit "order" on another bulk buy of flat-packed furniture, take a moment. In this article, you'll learn the hidden costs of cheap office furniture and why refurbished premium office furniture is the smarter alternative. If you're looking to reduce hassle, save money, and build a workspace that actually lasts, keep on reading. Need help getting started? Get in touch with our team for advice, audits, or to browse our refurbished stock .

Refurbished Office Furniture Saves Overbury Over £2000 on Site Setup Costs

By Ida Gorecka • July 18, 2025
Anyone who's worked in construction knows that site setup costs can quickly spiral. For Overbury , one of the UK's leading fit-out and refurbishment specialists, managing these costs while maintaining professional standards is a constant balancing act. When setting up their latest construction site office, they faced a challenge familiar to many in the industry: creating a functional workspace quickly and cost-effectively. After seeing what we achieved together on their previous project, Overbury approached us with clear priorities - they needed a professional office setup delivered on a construction timeline. With tight deadlines to meet and costs to manage, they needed their office space ready quickly while avoiding the expense and environmental impact of buying new office furniture. Like many construction projects, this one came with complex requirements - specific layouts, tight timelines, and budget constraints - yet Overbury knew from experience that refurbished office furniture could deliver exactly what they needed.