Somerset Council bin company faces 'significant losses'

The firm awarded the contract for waste collection in the Somerset Council area has said it is losing so much money it might need to pull out of the contract.

Suez has a £24m-a-year contract to collect rubbish, recycling and garden waste.

It said it was making "significant losses" on its contract, however.

Councillors have asked their chief executive to negotiate with Suez and could potentially pay the company more in a bid to keep the contract going.

The company has to give three months notice and would have to pay some compensation to the council if it breaks the contract early, which is meant to run until April 2030.

Suez started the contract in April 2020 and a council report said the Covid pandemic and a shortage of lorry drivers in the past few years had affected its viability.

The exact amount of losses is being kept confidential, for business reasons, but Somerset Council said it has had the figures checked by external consultants.

Councillors have voted to instruct the authority's chief executive to begin negotiations with Suez regarding extra payments.

If they reach a new figure that Suez would accept, the council will then look at that amount compared to the potential cost of hiring another company to run the bin collections, or bringing the service in-house for the council to run.

The council, which declared a 'financial emergency' last year, said both of the latter options risked disrupting bin collections and could be more expensive.

'Deeply frustrating'

Mark Taylor, South West Regional Director for Suez said: 'We have been operating the Somerset contract, one of our largest and most important collection contracts in the UK, since April 2020, and we are proud of the improvements that we have made over that time in terms of both the service and recycling levels.

'These past four years have also been a time of unprecedented change, including the pandemic and the HGV driver shortage that followed, and we are working through the impacts of this on the contract with the council.

'As we do this, we are very mindful of the financial pressures that Somerset Council is facing, and we are actively working with council officers to agree a way forward.

'In terms of our front line collection services it is very much business as usual, and our teams continue to deliver essential services to households across Somerset.'

Councillor Dixie Darch, lead member for the Environment and Climate Change, said: "This is a deeply frustrating situation, but it is clear that we cannot sit back and do nothing.

"All the options come with extra cost and if an acceptable agreement can't be reached with SUEZ there is also the risk of widespread disruption to a crucial frontline service, which will affect everyone.

"It's a situation we have to deal with and our focus must be on finding the best way forward that minimises the cost, while also protecting a much valued service."

The current contract with Suez covers all kerbside collections of refuse, recycling, and garden waste, including clinical waste, delivery of waste containers as well as operation of waste transfer stations that move waste on for recycling.