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Opposition councillors are demanding a full inquiry into loss-making Bristol Energy after the city council put it up for sale.

The local authority has invested up to £37.7 million of council tax payers’ money into the company, which was initially expected to be in profit by 2019.

However, the latest projection has now forecast the break-even point to be 2023/2024. 

Bristol City Council increased the amount of public cash it devoted to maintaining the business several times – more than doubling it from £15 million by April 2018 to the current level.

But it has now decided to appoint consultants Ernst and Young to find a buyer, despite mayor Marvin Rees previously insisting it would be “unwise” to sell it.

It is understood that any sale would recoup only part of the amount invested by the council, which wholly owns the company.

City council Lib Dem group leader Cllr Gary Hopkins said: “The mayor has broken his word on this and we need a full inquiry into what happened, including the decision-making and the information that was given out.

“There has been a misdescription of the money, which has been put down as an ‘investment’, which it clearly isn’t.

“We knew this was inevitable. They were pumping money in so they didn’t have to face up to the crystallisation of the debt”

“We knew this was inevitable. They were pumping money in so they didn’t have to face up to the crystallisation of the debt. They were coming up with comments like: ‘It will turn around’, but frankly they had given up on that some while ago.

“Then the story was that the energy company would be useful for City Leap, which was also exposed as nonsense. The mayor had been timing things to get past the local elections before announcing it had collapsed. That became impossible because they were cancelled.

“He is now trying to deal with it under the cover of coronavirus.”

Mr Rees was asked for a comment on Monday (4 May).

Cllr Hopkins said a special meeting of the full council to debate the future of Bristol Energy, which had been due to take place in March before the lockdown forced its postponement, would now be revived as soon as possible.

He said that despite promises from the Labour administration that opposition members would be kept fully informed of any developments, the first he had heard about the company’s sale was from a media report on Monday.

A Bristol City Council spokesperson said: “Ernst and Young has been commissioned to provide professional advice to the council by undertaking a full and thorough assessment of Bristol Energy’s structure and future business viability.

“A key objective is to mitigate the extent of any additional funding requirement from the council beyond the existing agreed funding envelope.”

Asked about how the company’s sale would affect City Leap – the local authority’s ambitious project to build a low carbon energy system that was based on an outside investor willing to partner with Bristol Energy – a council spokesperson said: “We remain committed to delivering carbon neutrality for Bristol by 2030 and we know that this will require substantial external investment in Bristol’s future zero carbon energy system.

“It remains the case that City Leap has the potential to play a significant part in attracting that investment, as well creating opportunities for Bristol’s residents, communities and businesses to play their part.”

‘Growing alarm’

Bristol Energy was set up in 2015 under then-mayor George Ferguson to provide ethically sourced, low-cost energy, and with the aim of returning a profit for council tax payers.

But the company has posted total losses so far of £29.7 million, including £10.1 million in 2018/19, its third year of trading.

Last month, the mayor appeared to change tack after years of upbeat talk about the energy firm’s future when he said the decision to set up the business was “not sensible”, blaming previous administrations.

His comments came in a written reply to Conservative Cllr John Goulandris for Members’ Forum.

But Mr Rees added: “We have to be responsible with where we are and what we inherited.”

The council’s cabinet agreed behind closed doors in March to bring forward an unspecified amount of additional investment earmarked for further down the road, taking it closer to the £37.7 million ceiling the local authority has set for the total amount of money it will pump into the firm.

It is not known how close the council is to that limit because the agenda item was deemed exempt from the press and public on the grounds it contained commercially sensitive information.

Growing alarm about the financial state of Bristol Energy prompted Tory and Lib Dem councillors to call an extraordinary full council meeting last month before agreeing to its postponement because of the Covid-19 pandemic, having received “reassurances” they would be kept informed of developments.

They tabled a motion claiming they had been “gagged” and that the Labour administration was taking big decisions on the company without proper scrutiny.

The councillors branded Bristol Energy a “speculative venture” and said they were being “unreasonably constrained from expressing concerns” because major decisions were taken “behind a legal clock of commercial confidentiality”.

In response, deputy mayor with responsibility for finance, governance and performance Cllr Craig Cheney insisted the business was viable and accused the opposition members of playing politics immediately before what would have been the local elections campaign.

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  • MALCOLM ROBERTS says:

    You couldn’t make this up- more bluster from the Mayor and his one party support team. The management of this city is quite simply a disgrace

  • Julian Ellacott says:

    A good overview of a sad and sorry tale. To pick just one small but significant point – the Council meeting in March where this was going to be discussed was cancelled, after councillors received “reassurances” they would be kept informed of developments – yet they only learned about the latest developments from the media.
    What a shoddy way to treat elected councillors, who are only trying to scrutinise what is going on.

    • David Saunders says:

      There’s another side to this story. We are being ripped off for our energy while subsidising the Big 6 and global warming. We pay about three times as much for electricity as it costs to make it from fossil fuels and renewables. Bristol Energy was Bristol’s first big pioneering response to the need to fight fuel poverty. Already, around 125,000 customers get cleaner energy – cheaper than Big 6 fossil fuel company prices.

      Bristol Energy is part of the city’s climate emergency plan to get Bristol carbon neutral – the whole council unanimously want this, and so do most of the public. It will be a huge investment, but that money could come from outside Bristol – from clean energy corporations, or from local pension funds. And the investment will create green jobs locally, and will help wean us off fossil fuels for our energy, transport and businesses by 2030 – or even 2025 if we pull our fingers out. And the result should be lower energy bills for everyone, because renewable energy is cheaper than fossil energy – bills could be cut by a third or a half in the process.

      This is called the Green New Deal, and if central government doesn’t understand it, the mayors of core cities across the country are gearing up to make it happen anyway – creating green jobs, cleaner air and cheaper energy in the process. It’s just what we need to reboot the economy and build a better world after Corona. And wouldn’t it be a shame if politicians who are out to score points killed it dead in its tracks?

      Having our own energy company is a big part of making this happen, and it will need support and action from all of us. We all need to understand this bigger picture. And why wouldn’t the city invest a few tens of millions if that’s going to brings in billions of investment that will end up saving Bristolians hundreds of millions a year in energy bills? And give us clean air and green jobs, keeping us healthier and wealthier…

      Some people think that climate change is just a ruse thought up by a few rabid crusty greenies. A lot of fossil industry PR money is being spent to help keep us thinking that way. But does it really matter whether we make a cleaner, greener, fairer, better world in order to avert a climate catastrophe – or just because it’s a pretty good idea anyway? Either way, trashing Bristol Energy right now might prove to be a major own goal.

      It would be great if the Bristol Cable put some good energy into helping us all understand the possibilities that open up if we green up our city by decarbonising our energy while creating a fairer economy…

  • Norman says:

    Sell this appalling Company which is losing huge amounts of taxpayer cash, then hold a PUBLIC enquiry into the whole rotten story, looking at those responsible and holding them to account. Councils such as BCC should NEVER be allowed to use taxpayer money to run any business except perhaps a corner shop!.

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