Somerset Council will consider paying an extra £47m over six years for waste services after its contractor disclosed it was making significant losses in the area.
Suez warned the local authority in May that it would consider exiting the contract, despite the financial penalty it would face, unless payments were increased.
Councillors will now consider whether to accept the settlement with Suez, bring waste services in-house, or find a new contractor. All options cost ‘substantially more’ than the council pays now.
Officers have recommended agreeing to pay Suez more for the rest of the contract, which runs until 2030.
The council said independent analysis had shown it was the cheapest option.
It would pay Suez £3m extra this year, with the additional sum increasing to an annual average of £7.8m over the contract, which is currently worth £24m a year.
Somerset said Suez would still be making a substantial loss.
The council’s lead member for environment and climate change, Dixie Darch, admitted that the extra payments were ‘very much the “least worst” option’.
‘These are not options we expected or want to consider, but we have to make sure this vital service continues,’ she added.
