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Further £15 million of public money ‘lost’ to Bristol Energy

Bristol Energy lost another £14.8million last year, latest financial data shows. Now a public interest report is being sought to find out what went wrong.

Reports

Bristol City Council established Bristol Energy in 2015 to provide affordable energy for residents while returning a profit for the local authority.

The company failed to turn a profit despite up to £37.5 million of council investment, and the local authority finally admitted defeat last year, breaking up and selling the company for a total of £15.3 million.

But Bristol Energy lost another £14.8 million last year, latest financial data shows. The details of the losses were revealed in the failed company’s final annual report published on Sunday (10 January)

The council has asked its external auditor Grant Thornton for a public interest report into the matter, to find out what went wrong and the exact extent of the losses for taxpayers. A Cable long read last year dissected what went wrong for Bristol’s energy company.

Number breakdown

In the meantime, the latest annual report of the energy firm, renamed BE 2020 in October, sheds some more light on the financial fortunes of the company in its last complete year of trading as Bristol Energy.

Financial statements for the year to 31 March 2020 show the firm posted an adjusted operating loss of £8.5 million last financial year.

This compared with £10.1 million in 2019 and £10.3 million in 2018, and takes its total posted operating losses to around £40 million since 2016. However, adjusted operating losses do not tell the whole story.

The £8.5 million figure reported for the 2019/20 year does not take into account just under £3.3 million in bad debt and other costs, such as £219,000 for restructuring.

When these extra costs are included the official operating loss reached £13.26million last year. And after interest and tax were taken into account, the total loss for the year “being a total comprehensive expense for the year” was £14.8 million, the report states.

In previous years, this figure reached £12.1 million in 2019, £11.2 million in 2018 and £8.4 million in 2017.

“The directors do not recommend the payment of a dividend,” the report for 2019/20 says.

How did it all start?

Bristol Energy was set up in 2015 by Bristol City Council’s then cross-party cabinet after the idea of a wholly council-owned energy company was approved in principle in 2010. The current ruling Labour administration took office in 2016.

The company’s business plan at that time committed the council to spend £15.7 million on Bristol Energy. Three years later, the Labour cabinet agreed to increase the investment to a maximum of £37.7million.

Bristol Energy gained 3,000 new residential customers last financial year, taking the total to 168,000, but lost a handful of business customers, leaving it with 176 by the end of the last financial year, according to the latest annual report.

Its annual turnover was £102.2 million compared with £76.2 million the previous financial year.

By September 2020, the company had sold its domestic and residential customers for a total of £15.3 million. Together Energy agreed to buy its domestic customers for £14 million while Yu Energy agreed to purchase its business customers for £1.3 million.

The Local Democracy Reporting Service has contacted the council for comment.

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