THE council is set to make a £2.6 million hole in its savings after the cost of disposing of household rubbish soared.

When the Cabinet meets on Wednesday, it will be asked to approve the extra spending for the remainder of the 2016/17 financial year.

Almost all of Swindon’s household waste is dealt with by the recycling plant on the Cheney Manor Industrial Estate through a process that means it doesn’t end up in landfill sites.

That recycling plant is run by Public Power Solutions (PPS) Ltd, a company wholly owned by Swindon Borough Council.

PPS also runs a number of renewable energy sites including the solar parks at Wroughton, Braydon Manor Farm and Chapel Farm.

In recent years, Swindon Borough Council has been paying significantly reduced charges for rubbish disposal because PPS has been able to offset that discount with money generated through their renewable energy projects.

But now the government has slashed the subsidies to solar projects by up to 65 per cent meaning they are no longer as profitable as they previously were – this means the pot of money available to subsidise household waste disposal will be much smaller.

The council will now have to pay market rates to dispose of their rubbish in what is essentially their own disposal facility, however they argue that this cost is still going to be less than that of landfill disposal.

Coun Dale Heenan, Cabinet Member for Sustainability, Highways and Transport, said: “95 per cent of all household rubbish in the borough is diverted from landfill for waste processing and recycling with Public Power Solutions (PPS).

“In recent years, profits from renewable energy projects have allowed PPS, which is wholly owned by the Council, to subsidise the cost of treating our annual 60,000 tonnes of waste.

“Last summer the Government announced changes to solar projects so, although still profitable, the reduced profits no longer cover the £50 per tonne subsidy.

“Cllr Russell Holland, Cabinet Member for Finance, is therefore recommending an increase in fees paid by the Council so we start paying normal market rates because this remains the most cost-effective, environmentally-conscious and sustainable way to manage our rubbish.

“The £2.6m cost is proposed to come from reserves so there would be no impact on local services this year.

“Our priority remains Adult Social Care and Children Services, supporting vulnerable people, and this absorbs more than 60% of the Council's budget, but day-to-day service like waste collection still need to happen.”

While the additional cost for the remainder of 2016/17 can be met from reserves, it is not clear what the financial impact will be in future years.

On Wednesday, the cabinet will also be asked to approve a number of steps including a review of the working processes at the plant and the repayment of an existing loan with a view to bringing that future cost down as much as possible.