Somerset taxpayers could have to shell out more to have their bins collected to prevent the current contractor from pulling out.

Suez currently holds the contract for all kerbside collections in Somerset, (including recycling, refuse, food waste and garden waste) and is contracted to provide these services until at least 2030.

Despite earning £24 million a year from this contract, the company recently disclosed that it had experienced "significant financial losses" and may have to exit the contract if payments are not increased.

Somerset Council – which inherited the contract from the Somerset Waste Partnership in April 2023 – has said it will negotiate a new deal with Suez and has vowed to ensure there is no disruption to weekly collections while this issue is settled.

The matter was debated in detail by the council's executive committee when it met in Taunton on Wednesday (May 8).

The current contract commenced in April 2020 (coinciding with the early stages of the coronavirus pandemic) and has included the implementation of Recycle More, allowing more items to be recycled at the kerbside.

On top of 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.

In the last 12 months, 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.

The company has said it may have to terminate its contract (giving just three months' notice) unless a "settlement figure" can be reached which would allow it to continue providing the existing services.

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."

To resolve the issue, the council is to enter negotiations over a "best offer" with Suez, which will allow services to continue at the lowest possible increase of costs to the taxpayer.

The council has numerous provisional options for moving forward without Suez, including re-procuring the contract with another company, forming a direct labour organisation or setting up a local authority trading company – but each of these options will cost more than the current arrangement.

Ms Darch said: "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.

"The focus must be on finding a way forward that limits the financial impact and avoids disruption to a crucial statutory service."

Cllr 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."

A report on the proposed option for moving forward will come before the executive for a decision later in the year.

Any changes to the Suez contract will not affect the county's household waste recycling centres, which are operated by Biffa under a separate legal agreement.