Somerset waste bosses predict £1.2M deficit due to rising contract costs

The Somerset Waste Partnership (SWP) is predicting a budget deficit of around £1.2million due to rising costs with its contractors.

The SWP contracts multiple different companies to dispose of Somerset's waste – including Suez for its kerbside collections, and Biffa to run the county's 16 household waste recycling centres.

The cost of collections has risen due to extra precautions being taken in light of the ongoing coronavirus pandemic, as well as the volumes of waste which are being processed.

This does not include costs associated with implementing the Recycle More programme, which is not expected to start delivering savings until 2023.

A report on the SWP's finances came before its joint scrutiny panel when it met on Wednesday afternoon (December 8).

As of the end of October (the most recent figures available), the SWP was predicting an overspend of £1.186million – the equivalent of around 2.5 per cent of its annual budget.

Of this, £1.045million came from additional costs relating to Suez collections to mitigate the impact of the pandemic, as well as inflationary pressures.

Christian Evans, the SWP's strategic manager for finance, said in his written report: "The current agreement withSuez is that payments for direct costs related to covid (i.e. safe staggered starts, extra vehicle cleansing, staggered debriefs, cover for covid absence) will continue.

"This is considered prudent in order to maintain service stability. We will continue to negotiate this position with Suez,

"There has been an incorrect allocation of inflation since the commencement of the collection contract."

The remaining £141,000 of the overspend relates to "increased waste volumes (predominantly residual waste)" at the recycling centres.

The SWP has published initial proposals for its 2022/23 budget, which will see each of the four districts contributing more to account for housing growth.

South Somerset will see the biggest rise at 10.5 per cent (the equivalent of an extra £505,219), followed by Somerset West and Taunton (10.3 per cent or £447,740), Sedgemoor (10.2 per cent or £329,797) and finally Mendip (9.7 per cent or £312,245).

Somerset County Council's contribution will fall by £752,717 – the equivalent of 2.4 per cent – but it will still contribute the most out of the five current councils.

Mr Evans said: "Household growth figures are provided by each individual district council partner. The current average of these figures is growth of 0.93 per cent.

"The actual figures applied to the 2022/23 budget will be known in January. The figures will relate to the December household numbers provided by HMRC.

"Suez has claimed that they are collecting from a larger number of households than they are being paid for through the contract.

"They have not yet provided any detail to evidence this claim, and we are already working with the district councils to understand and reconcile any differences."