We need your support to continue! Become a member
The Bristol Cable

£17 million could be wiped off value of Bristol Energy

The Labour-run council is trying to sell Bristol Energy, which has soaked up £35 million of council tax payers’ money and posted official losses of £32.5 million since it was set up five years ago.

Reports

As much as £17 million could be wiped off the value of Bristol City Council’s investment in Bristol Energy, according to a last-minute change to the local authority’s financial accounts.

Councillors who signed off the council’s Statement of Accounts for 2018/19 made the change against the advice of the council’s top accountant.

A previous version of the council’s 2018/19 accounts advised market conditions and the coronavirus pandemic were likely to wipe up to £7million off the value of the council’s investment in the debt-ridden energy firm.

The final version approved by the council’s audit committee states the value of that investment is likely to be “materially” affected by a combination of market conditions, the coronavirus pandemic and the possible sale of Bristol Energy.  “Material”, as explained by a committee member, “means £17 million”. 

The council’s chief finance officer, Denise Murray, fiercely opposed the amendment agreed by a majority on 25 June. She and her team had already revised the note in the accounts after members had refused to sign off the earlier version suggesting £6-7 million could be lost from the investment value.

The finance team’s revised note stated market conditions, the pandemic and uncertainty about the future of Bristol Energy would likely have a “significant” but unquantifiable impact on the value of the council’s investment in the firm.

Murray told members of the committee the revised wording was recommended by Grant Thornton, the accounting firm which audits the local authority’s accounts. “You’re as good as asking for a figure to be incorporated where we don’t believe a figure can be quantified,” she said.

But Tory councillor Geoff Gollop, who is also a qualified accountant, said: “I believe it is misleading in a note to the accounts to say that it is unquantifiable when I categorically can state that it is.

“I feel this is something that’s so fundamentally wrong that I could not allow these accounts to go forward as they currently stand.”

Cllr Gollop was not able to explain his reasoning without reference to confidential information so he argued his case behind closed during an exempt portion of the meeting.

When the meeting resumed in public nearly two hours later, committee members voted four to two to amend the wording of the note, before voting unanimously to approve the accounts with the amended wording.

The committee is made up of Labour, Conservative, Liberal Democrat and Green Party councillors.

The note with the amended wording reads: “During the last six months of 2019/20 there has been a down turn in the market conditions Bristol Energy operates under. 

“This, in part, has been caused by a sharp fall in oil, gas and electricity retail prices along with weather-related reduced customer consumption. 

“These conditions were not in place at the end of 2018/19 and could not have been reasonably forecasted at the time. 

“Since 31 March 2019 the Council has invested a further £7.7million of its planned cash investment in Bristol Holding Limited [the council-owned parent company of Bristol Energy]. 

“However, given market conditions, the coronavirus pandemic and more recently the uncertainty regarding the final outcomes of decisions the council may take regarding Bristol Energy’s future (including its recent decision to progress the sale of the business and or assets), it is anticipated that the carrying value of this investment, or the liability arising from the council’s parent company guarantees, is likely to be materially impacted at the end of March 2020.”

“Material”, as defined in the accounts, is at least £16.5million which is 1.5% of the council’s gross expenditure. “Material” as it relates to the group of companies owned by the council, which include Bristol Energy, is £17.5million which is 1.5% of the group’s gross expenditure.

For more reporting on Bristol Energy, click here.

Comments

Post a comment

Mark if this comment is from the author of the article

By posting a comment you agree to our Comment Policy.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related content

Council commits to crackdown on benefit discrimination against renters

Following a renter-led campaign by Shelter, councillors from across parties voted to support the Labour motion pledging to tackle landlords excluding renters who claim benefits.

Council to cut management jobs and hike parking fees but protect frontline services in bid to fill £20m budget gap

In response to declining funding from central government and the impact of Covid, cost saving measures also include selling off council buildings, raising council tax and ending free short stays in residential parking zones.

Council call off bailiffs after discovering an eviction blocked by community response was for a debt owed to them

Bailiffs were trying to evict the woman and her two children a week before Christmas.

Bristol councillors vote for mayoral referendum in 2022

Bristol will decide whether to keep the directly elected mayor, or return to the committee system that existed before the last referendum in 2012.

'We need public leaders and institutions to be bold with big ideas, despite the risks and bad PR'

When we face existential issues like the climate crisis, or calls for radical changes to problems that affect us all, we need public institutions and leaders to not be timid.

Bristol was one of five areas with illegal air pollution in 2020

The city’s Clean Air Zone is finally coming into force next summer after multiple delays. Campaigners say it can’t come soon enough.

Join our newsletter

Get the essential stories you won’t find anywhere else

Subscribe to the Cable newsletter to get our weekly round-up direct to your inbox every Saturday

Join our newsletter

Get the essential stories you won’t find anywhere else

Subscribe to the Cable newsletter to get our weekly round-up direct to your inbox every Saturday