Waste collection to cost extra £47m over 6 years

SOMERSET taxpayers will have to pay an extra £47m between them to ensure their bins are collected for the next six years.

Suez’s contract with the thenSomerset Waste Partnership began in April 2020 and will run until April 2030.

But Suez said in May that it had experienced “significant financial losses” and may have to exit the contract if payments are not increased.

Somerset Council, which assumed control of the contract in April 2023, has now provisionally agreed to provide millions of pounds extra per year to prevent rubbish lying uncollected at the kerbside.

The contract is currently worth around £24 million a year, with Suez being required to collect waste and recycling from 385,000 homes.

The company has experienced numerous challenges since the contract begin, including the coronavirus pandemic, a national driver shortage, periods of high inflation leading to higher staffing costs and a drop in revenue from the materials it routinely recycles.

The council has reviewed options to either re-procure the contract or bring it partially inhouse.

However, each of these options would take at least a year to implement and could prove to be more expensive.

The last six years of the contract, from April 2024 to April 2030, are worth around £144m without any uplift in payments.

Under the proposed changes, the council will shell out an extra £3m in the current financial year, which will be funded through reserves or savings from other corporate services.

This additional payment will rise to around £7m in 2025/26 and then £9.25m per year for each following year, meaning a total additional bill of £47m on top of the existing contract.

In spite of these additional payments, Suez says it will still be making a loss on the contract, just “not to the same extent.” Councillor Dixie Darch, portfolio holder for climate change and the environment, released a statement before the council’s executive committee met in Taunton to approve the changes.

She said: “This is a hugely frustrating position to be in, but all ways forward involve paying more.

“What is being recommended is very much the least worst option.”

Cllr Sarah Wakefield, portfolio holder for adult social care, said during the meeting: “Dealing with a large, commercial, foreign-owned company is not an easy thing to do.

“We can’t revisit the fact that they may have under-assessed the value of the contract when they bid for it, and of course lots of things have happened since then to make it less viable.

“I think this proposed solution is a really excellent one for the council and for Suez as well.”

Council leader Bill Revans, pictured, said it was difficult to secure a more competitive settlement due to the recycling market being dominated by only a few companies.

He said: “Regarding the national market in waste collection, my understanding is that there aren’t that many big players, so effectively they have a monopolistic power.

“Where that power is motivated by foreign investors, as I think may be the case here, who knows what impact that has across the country?”