£37.7 million later: Council announces sale of debt-ridden Bristol Energy
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.”
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Having worked for BE between 2017- 2018 I can see why they don’t want an inquiry. A lot of money was spent on expensive hotels and meals – some of the meals being “leaving meals” where the company without a problem gave their credit card to stuff to spend on as much booze as they wanted. This was always going to happen.
You’ve been draining my mother’s account for years expecting her to pay exstortionate money for 1 bedroom flat best thing which could have happened where does she go from here you’ve broken her contract which she had from your I expect a reply.
Don’t blame Clovid 19 your a poor company
Don’t blame Clovid 19 your a poor company explain the truth
As a BE employee i find it really difficult to read the press around BE and particularly the forthcoming sale. There is no mention of the impact it will have on the 200 something people who work there, particularly in these challenging times where employment opportunities are far from abundant. Some of these people, myself included, have – since the beginnings of BE – given so much for the company, have believed and been so passionate about the opportunities that a Bristol-owned energy company could deliver to the city. Meanwhile, people who got paid 6 figure salaries to run the business, who did a pretty poor job of trying to make it work, who had zero interest in, or understanding of, what Bristol and BE stand for, they will be the least impacted by this sale. Some of them, now long gone from the business, who got paid a quarter of a million pound redundancy package for doing such a great job, used to spend his hours in the office reading the news and helping the Office Apprentice install a new dishwasher. Yet it’s those people the Bristol Cable went to to ask for help in writing an essay about the failures of this company. It is heartbreaking that BE will cease to exist, and what’s more heartbreaking is the lack of perspective that the media has shown throughout the whole debacle.
The people of Bristol should override the council vote for no inquiry on BE and protest in large numbers after all it’s their money. BBC West have reported this issue once for 30 seconds but with no names put in the frame. Councils wrote the book on excuses for their failures but no one seems to make them fully accountable for their actions. I’ll be glad to see councils made fully transparent to their local council tax payers then these huge amounts of money could be saved for better use. I wonder Bristol Council will lose more very soon too when we Brexit fully on Jan 1st as they lose the EU’s green energy subsidy, then Marvin Rees can walk off into the sunset and leave you all with the bills. Labour have only ever been good with mismanagement of taxpayers hard earned money proven here in Swindon too in the past. Doubled council tax and couldn’t even keep the streets clean thrown out half way through their term. Good Luck Bristol seems you’ll need it. From a Swindonian who once lived in Bristol
You want an enquiry?
Vote the Labour Councillors out of office
You want an enquiry?
Vote the Labour Councillors out of office!
If establishing an energy company was always a high risk for the council, why did they do it?