Birmingham City Council has approved a controversial waste disposal contract with Veolia, describing it as the ‘best option available’.

The decision to go ahead with the deal was blocked last week by the resources scrutiny committee due to concerns that the council was not getting the best value for money.

The committee was also worried that Veolia had been given an unfair advantage over potential competitors, which would leave the local authority at risk of legal challenge.

Birmingham City Council originally signed a 25-year contract with the company in the 1990s. This was due to expire yesterday, although a two-year extension had already been agreed.

Veolia offered to extend the contract another five years last summer. However, the council’s cabinet did not meet to approve the proposal in public until December.

This led to the scrutiny committee criticising the authority for leaving the decision over the contract renewal too late.

The Liberal Democrat councillor Jon Hunt, who applauded the scrutiny committee’s decision to block the agreement, called for an audit inquiry.

‘The end of the 25 year contract with Veolia for waste disposal offered huge opportunities. That has been squandered,’ he told LocalGov.

A council spokesperson defended the agreement as ‘the best option available to us’.

‘In simple terms, it will put us in the strongest position possible when we look to let future waste disposal contracts as it will give us the time we need to work with our existing partner Veolia to ensure all of our waste disposal facilities are in the best possible condition once the five years are up in 2024,’ they said.

‘Crucially, the five-year interim arrangement will also allow the city council time to engage fully with the market about future waste disposal solutions and to respond effectively to the Government’s 25-year plan for waste.

‘The consultation has only recently been issued and asks challenging questions of the waste management sector about further splitting the waste stream and increasing recycling.’

The spokesperson added that the contract would entitle the council to a share in revenue from both recyclables and electricity generated by the Tyseley Energy Recovery Facility.

Birmingham City Council has threatened trade union Unite with the prospect of a court order as industrial action by refuse workers continues.