No independent inquiry into £35 million council spending on loss-making Bristol Energy

May 29 2020
No independent inquiry into £35 million council spending on loss-making Bristol Energy

THERE will be no independent inquiry into why Bristol City Council continued to pump millions of pounds into debt-ridden firm Bristol Energy.

Opposition councillors accused the council of hiding “behind a legal cloak of commercial confidentiality” and called for an independent inquiry at an extraordinary meeting of Bristol City Council.

But the motion was blocked by Labour councillors, who hold the majority at City Hall.

Bristol Energy, which was set up by a previous administration under former mayor George Ferguson in 2015 and is still owned by the council, has been supported with £35 million of council tax payers’ money and posted total losses of £32.5m so far.

But few financial details about the company have been made public. As such, opposition parties have accused the council of withholding important information from the public, such as the appointment of a new managing director to oversee the possible sale of the company.

The motion brought by Conservative and Liberal Democrat councillors claimed they had been “gagged” and accused the Labour administration of taking big decisions on Bristol Energy without proper scrutiny.

Opposition groups united to support the motion on Tuesday, but said they were were “bitterly disappointed” when it was voted down by Labour members.

The council argues that releasing the information would put Bristol Energy at a commercial disadvantage against private companies in a highly competitive energy market.

At the meeting, held online (above), current mayor Marvin Rees defended himself and his administration against accusations of “secrecy” and financial mismanagement in relation to the council’s handling of Bristol Energy during the past four years.

The mayor blamed the previous administration for creating the company. He said the current administration had acted in the company’s “best interests” by withholding sensitive commercial information – which will also protect taxpayers’ money.

Mr Rees said the previous administration had been “single minded” about looking at the “upsides of getting into the energy market”.

He added: “They had the party and we’ve been left to cope with the hangover.”

He said £12m was invested into the company by the previous cross-party administration, led by former mayor George Ferguson, and his own Labour cabinet had “allocated” another £23m since taking over in May 2016.

He said the company had 99,000 business and residential customers at the end of April, reflecting “minimal” growth over the past year.

But Conservative group leader Mark Weston described the company as “haemorrhaging money”, as he brought his motion to the extraordinary full council meeting.

Mr Weston said it was time for the administration to accept that Bristol Energy was a “dead weight” on council finances and it should be “released”.

What we want is an inquiry,” he said. “Let us investigate exactly what happened, when it happened, the funding that goes with it, because I fear we have a bombshell about to explode in this city’s finances that is going to cost us millions.”

Seconding the motion, Lib Dem group leader Gary Hopkins said it was obvious more than two years ago that Bristol Energy was in trouble and accused the mayor of a “cover-up” once he realised the company was beyond rescue.

Speaking on behalf of the Green group in support of the motion, councillor Jerome Thomas said the council had acted with “inappropriate secrecy” in relation to Bristol Energy and the public knew more about the finances of British Gas and Scottish Power than they did about the energy company their council tax had paid for.

Greater openness would have meant that problems with Bristol Energy would have been identified and communicated earlier and suitable corrective action could have been taken,” he added.

Labour member Estella Tinknell called for the opposition councillors to withdraw their “completely counterproductive” motion and instead work together to ensure Bristol Energy has a “positive and constructive future”.

A second exempt motion about Bristol Energy was discussed behind closed doors during the second half of the extraordinary meeting.

Mr Rees said councillors and the public will be able to ask questions about Bristol Energy’s finances at a cabinet meeting on June 2.

Earlier this month it emerged that a troubleshooter had been brought in to oversee the sale of Bristol Energy.

Allan Booth, who was appointed managing director of the city council-owned, loss-making firm in March, has a history of parachuting into businesses on the brink of collapse and restructuring them.

Mr Booth says in his LinkedIn profile that he brings a “wealth of knowledge and experience (including some mistakes!)”.

The 66-year-old has been a director of three businesses that have gone into liquidation as well as two sister firms that were dissolved where his occupation was listed as “turnaround expert”, according to records at Companies House, although there is no suggestion that this was due to any wrongdoing or incompetence on his part.

By Amanda Cameron, Local Democracy Reporting Service