Burnham-On-Sea and Highbridge residents could soon be asked to spend more to have their bins collected to prevent the current contractor from pulling out.
Suez holds the contract for all kerbside collections across Somerset, including recycling, refuse, food waste and garden waste, and the firm is contracted to provide these services until at least 2030.
However, despite earning £24m a year from the contract, Burnham-On-Sea.com recently reported that the company says it has experienced “significant financial losses” and may have to quit the contract if payments are not increased.
Somerset Council, which took over the contract from the Somerset Waste Partnership in the spring last year, has said it will negotiate a new deal with Suez and hopes that there is no disruption to weekly collections in the Burnham-On-Sea area and other parts of Somerset while the issue is settled.
The issue was debated in detail by Somerset Council members on the council’s executive committee when it met on Wednesday May 8th.
The current contract started in April 2020 – coinciding with the early stages of the Covid pandemic – and it has included the introduction of Recycle More which is seeing more rubbish items recycled.
As well as the pandemic, Suez has faced numerous challenges during the early years of the contract, including a national driver shortage, increasing staff costs and a drop in revenue from the materials it routinely recycles.
During the past year, the company has issued several dispute claims against the council regarding payments for its work, complaints which are now being progressed through the proper channels.
Suez adds that it may need to terminate its contract, giving three months’ notice, unless a “settlement figure” can be reached which would allow it to continue providing the existing services.
During this week’s meeting, Cllr Dixie Darch, portfolio holder for climate change and the environment, said: “Suez would incur a payment penalty for exiting the contract early, but they say this would be dwarfed by the losses that they are making. Inflation is a factor in this, but it is not the only factor.”
In a bid to resolve the matter, the local democracy reporting service says the council is to enter into negotiations over a “best offer” with Suez, which will allow services to continue at the lowest possible increase of costs to the taxpayer.
Somerset Council says it has various provisional options for operating without Suez, including re-procuring the contract with another company, forming a direct labour organisation or setting up a local authority trading company, however it concedes that each of these options will cost more than the current arrangement.
Cllr Darch told the meeting: “Whichever route we go down, we’re not proposing any changes to the way in which waste is collected or disposed of. We have significant capital invested in vehicles and supporting waste transfer and treatment infrastructure, making a movement away from how we currently apply services very expensive.”
She adds: “The focus must be on finding a way forward that limits the financial impact and avoids disruption to a crucial statutory service.”
Councillor Ros Wyke, portfolio holder for economic development, planning and assets, added: “We’re not going to be alone in this situation. We’ve had unique and quite frightening effects on our economy for the last three or four years, first with Covid and then with the trashing of the economy to a degree. I think we need to have a broader approach to these long-term contracts. It is disappointing, but we are where we are.”
The council is scheduled to issue a report on the options for moving forward that will be considered by the council’s Executive for a decision later in 2024.
It has been confirmed that Somerset’s household waste recycling centres, including the one at Isleport in Highbridge, are safe as they are operated by Biffa under a separate legal agreement.
