Waste firm threatening to walk away from contract

Suez said it is making "unsustainable" losses in Somerset

Somerset Council will meet on Monday to decide whether to pay its waste contractor an extra £47m over the next six years.

It comes after the company Suez said the agreed contract is "no longer sustainable" and that it was seeking increased payments having seen the cost of delivering the services far exceed projections.

Councillors have agreed to meet with the firm next week to avoid losing the service, after it said Suez would "consider walking away, accepting the hefty financial penalty that would come with exiting early".

The negotiations could see Somerset Council paying Suez an extra £3m this year and an extra £47m over the next six years.

But it said it would also explore bringing the service "in-house" or whether the contract could be put out to tender.

The dispute comes at a difficult time for Somerset Council which has declared a financial emergency.

Suez deals with the county's household rubbish and recycling collections.

The contract with Suez is worth about £24m a year

South West regional director for Suez, Mark Taylor, said in a statement that the past four years "have been a time of unprecedented change".

He added: "The challenges of starting the contract at the height of the pandemic, rolling out new services, and post pandemic inflationary pressures have seen the cost of delivering the services far exceed projections.

"We have been working through the impacts of this on the contract with the council, as the significant financial losses Suez has incurred are no longer sustainable.

"We believe we had legitimate claims for an increase in payments, so we welcome the conciliatory and pragmatic approach the council has taken to addressing our concerns."

'Least worst' option

Somerset Council said all the options on the table are "substantially" more than it is currently paying and it is recommending officers continue its contract with Suez.

Lead member for environment and climate change, Dixie Darch, 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.

"These are not options we expected or want to consider, but we have to make sure this vital service continues."

Ms Darch said there was a detailed competitive tendering process, but "we are in very different times to when this contract was signed".