Somerset Councillors will next week consider negotiating extra payments to its waste contractor in a bid to protect the public purse and service continuity.
The Council’s waste contractor, SUEZ, has disclosed figures showing significant annual losses on its £24m a year contract. It has made a number of contractual claims seeking adjustment to payment and while these are in dispute, without an increase in payments there is a risk that SUEZ may exit the contract, to limit its losses over the contract’s remaining six years.
A report to the Council’s Executive Committee meeting on 8 May recommends giving the Council’s Chief Executive a mandate to negotiate with SUEZ to broker a deal which would stop SUEZ exiting the contract.
This option would then be brought back to a future Executive meeting to weigh up against all other options. These include bringing the service in-house or finding a new contractor through a tendering process – both of which are also likely to come with additional costs and the risk of disruption to collections.
SUEZ secured the Somerset contract in April 2020 following an open tendering process which was supported by independent consultants with expertise in the sector.
The contractor has worked with the Council’s Waste Services to cope with the challenges of the Covid pandemic, the national driver shortage and soaring inflation. At the same time it has successfully introduced the expanded Recycle More collections and trialled the collection of flexible plastics which have helped increase the county’s recycling rate.
The ongoing rerouting of collections is helping make rounds more efficient and as cost effective as possible, but even with this SUEZ considers the contract unviable.
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 is due to end in 2030, with the option for a ten-year extension. It covers all kerbside collections of refuse, recycling, and garden waste, delivery of waste containers as well as operation of waste transfer stations which move waste on for recycling.
