Embargoed: 00:01 Friday 22 October 2021
- 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.
- Using taxpayers’ money to dabble in the energy markets puts families on the hook for big losses.
- 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.
CLICK HERE TO READ THE RESEARCH
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.
- 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.
CLICK HERE TO READ THE RESEARCH
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.”
TPA spokespeople are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)
Media contact:
Danielle Boxall
Media Campaign Manager, TaxPayers' Alliance
[email protected]
24-hour media hotline: 07795 084 113 (no texts)
Notes to editors:
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Founded in 2004 by Matthew Elliott and Andrew Allum, the TaxPayers' Alliance (TPA) campaigns to reform taxes and public services, cut waste and speak up for British taxpayers. Find out more at www.taxpayersalliance.com.
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TaxPayers' Alliance's advisory council.
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The TaxPayers’ Alliance analysed council tax increases and found that council tax has more than doubled in 20 years.
- The TaxPayers’ Alliance has launched a petition to stop council tax rises.