Illustration: Rosie Carmichael
The city council has announced it is selling its debt-ridden company Bristol Energy.
Cabinet members meeting behind closed doors last night (Tuesday, June 2) agreed the move after reviewing the recommendations of consultants Ernst & Young (EY), who were commissioned earlier this year to conduct a full assessment of the firm’s structure and future viability.
The decision, which was confirmed this morning by the council, came after a fiery session in public where opposition members clashed with mayor Marvin Rees over who is to blame for the disaster.
Bristol Energy was set up in 2015 under previous mayor George Ferguson and has soaked up £36.5million of taxpayers’ money. But it has posted total losses so far of £32.5million.
Labour cabinet members went into exempt session to review EY’s report because of commercial confidentiality.
Bristol City Council says they agreed to sell it to “prevent any further investment than already agreed” and would now seek a buyer.
The authority had committed £37.7million to Bristol Energy, a figure which increased in several stages since 2016, with the amount more than doubling from £15million by April 2018 to the current level, with the council now deciding no more will be pumped into the firm.
The latest announcement comes after Labour councillors last week used their majority to block opposition demands for an independent inquiry into the costly debacle. The council’s latest set of accounts have also revealed that changing market conditions and the coronavirus pandemic are expected to wipe up to £7 million off the value of the council’s investment int the company. As previously reported by the Cable, Bristol Energy’s financial woes predate the pandemic.
Marvin Rees said: “Establishing an energy company was always a high risk for the council, and one which has brought continued challenges.
“The energy market is dominated by well-established far larger energy providers.
“Having inherited a failing company where £15million had already been spent or earmarked for spend, we were faced with a choice.
“We could have closed the company then or tried to develop a business strategy that would succeed, both in tackling fuel poverty in Bristol and delivering a financial return for the city.
“This proved to be impossible in such a volatile market place.
“We have tried to work in the best interests of the city and Bristol Energy customers, but been unable to divulge the challenge we were tackling as this would have further disadvantaged us against competitors.”
Deputy mayor Craig Cheney, cabinet lead for companies, said: “Selling Bristol Energy is in the best interests for the council and city taxpayers.
“We have worked tirelessly to try and turn the company into something that is not only profitable but also offers more to citizens in terms of social benefit as this was always the vision when we took it on.
“Projects supporting this vision include buying energy directly from over 54 renewable generators, most of them community owned, and the Bristol Energy Fuel Good Fund which supports Fuel Poverty.”