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As smaller energy firms fold thanks to spiking prices, the
TPA reveals the millions lost by the council-owned firms that
blur the line between the public and private sectors.
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Using taxpayers’ money to dabble in the energy markets puts
families on the hook for big losses.
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Campaign group calls for councils to focus on service
delivery and keeping down council tax.
With the current crisis seeing yet more energy firms close,
research from the TaxPayers’ Alliance reveals that eight
council-owned energy companies lost a total of £114,022,019 over
four years.
Bristol city council lost over £46 million - the most of any
council - through their energy company BE 2020 Limited, now in
liquidation. Nottingham city council, which has the highest band
D council tax in the country, had the biggest loss-making year
for its energy company, Robin Hood Energy, losing more than £23
million in 2018-19. Robin Hood Energy is now in administration.
Portsmouth council’s Victory Energy Supply Ltd is also in
administration after losing over £3.2 million.
Analysis shows that the 13 companies either owned or invested in
by councils lost a total of over £74 million, with less than half
making any profit in the four years.
The only council-owned energy firm to make a profit over the four
years was B&D Energy, owned by the London borough of Barking
and Dagenham. It made total profits of under £300,000 after being
propped up by almost £39 million in council loans and central
government grants, the largest investment from taxpayers.
Such investments are blurring the lines between the public and
private sectors. With council tax more than doubling in the last
20 years, the TaxPayers’ Alliance is calling on local authorities
to stop risking rate hikes by gambling with taxpayers’ money in
the energy markets.
Key findings:
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13 energy companies invested in by local authorities lost a
total of £74,106,589 over four years from 2016-17 to 2019-20.
These companies were either fully or partially owned by a
local authority. The biggest loss in a single year was
2018-19, when councils lost a combined total of £39,585,046.
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The eight council-owned energy companies lost a combined
£114,022,019 over the same period.
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Three council-owned energy companies are now in either
administration or liquidation. These are BE 2020 Limited,
Robin Hood Energy, and Victory Energy Supply Ltd.
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BE 2020 Limited – owned by Bristol city council – experienced
the largest cumulative losses of any energy company, losing
£46,516,619 between 2016-17 and 2019-20.
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Robin Hood Energy – owned by Nottingham city council –
experienced the largest loss in a single year of any energy
company, losing £23,075,000 in 2018-19. This company also saw
total losses of £31,618,000 between 2016-17 and 2019-20. This
was the second highest of any energy company.
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The total amount of public capital investment committed to
energy companies in which local authorities had a financial
interest between 2016-17 and 2020-21 was £132,310,960.
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B&D Energy – owned by the London borough of Barking and
Dagenham – received the largest amount of capital investment
from taxpayers at £38,770,000 between 2016-17 and 2020-21.
This includes £30,200,000 in loans from the council and a
further £8,570,000 in grants from the Department for
Business, Energy & Industrial Strategy.
John O’Connell, chief executive of the TaxPayers' Alliance, said:
“These findings show the record of these council energy companies
was woeful even before the current crisis.
“The rising cost of living is an understandable concern to many
households, and the failures of these energy firms leave locals
with the double whammy of rocketing bills and council tax
hikes.
“Local authorities must avoid experimenting in the energy market
and focus on keeping council tax down.”
