Somerset Council could pay extra to SUEZ after losses

Somerset Council is considering negotiating additional payments with its waste contractor, SUEZ, despite already paying £24 million per year. However, the contractor has reportedly recorded significant annual losses and is seeking more money from the council through a number of contractual claims, which are currently under dispute.

The council is concerned that without an increase in payments, SUEZ may exit the contract, which would leave the county without a waste collection service.

At the council’s Executive Committee meeting on Wednesday, May 8, it has been recommended to give the council’s Chief Executive a mandate to negotiate with SUEZ to broker a deal which would stop the company from exiting the contract.

This option would then be returned to a future Executive meeting to weigh against all other options.

The council is also considering bringing the service in-house or finding a new contractor through a tendering process. However, both options will likely come with additional costs and the risk of disruption to collections.

SUEZ secured the Somerset contract in April 2020 following an open tendering process supported by independent consultants with expertise in the sector. As of 2024, the contractor has six years remaining on the contract.

Despite ongoing rerouting of collections to make rounds more efficient and cost-effective, 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.

In response, Mark Taylor, South West Regional Director for SUEZ Recycling and Recovery UK, has attributed the company’s losses to factors such as the ongoing pandemic and the shortage of HGV drivers.

Despite this, he expressed SUEZ’s awareness of the council’s financial crisis and assured that they are actively working with council officers to find a way forward.

Taylor stated that SUEZ has been operating the Somerset contract since April 2020 and has significantly improved service and recycling levels since then.

He acknowledged that the past four years have seen unprecedented changes and challenges, including the pandemic and the subsequent HGV driver shortage, and that SUEZ is addressing their impact on the Somerset contract.

Despite these challenges, Taylor assured that SUEZ’s front-line collection services are operating as usual, with teams continuing to provide essential services to households across Somerset.

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