Bristol Energy cost taxpayers £39.3m
Liquidators spent the last five years winding up the former city council-owned company
The final cost to council taxpayers of the collapse of Bristol Energy has been revealed as £39.3million.
Liquidators spent the last five years winding up the former city council-owned company, collecting money it was owed and paying off debts.
Now that process has been completed and the firm formally dissolved following one of the most disastrous ventures in Bristol City Council history.
As the Local Democracy Reporting Service reported back in 2021, the total cost of the doomed business for the local authority would end up as much as £43.8million.
The final figure is lower because only about half of the £7.3million the council set aside to cover any creditor or energy industry liabilities during the wind-up was needed, and the liquidators clawed back £900,000 for the authority, although they charged about £300,000 for their services, according to a filing at Companies House.
A report to be discussed by the council’s audit committee on Tuesday, September 29, said: “The council’s cash investment in the company was approximately £36.5million.
“The council had also established a £7.3million provision/indemnity to enable residual creditor and industry liabilities to be settled as part of the orderly wind-up of the company.
“Approximately £3.75m of this amount was ultimately required to meet those liabilities, including residual energy-industry obligations.
“During the liquidation, further assets were recovered, including historic customer debts, security deposits, credits arising from gas and electricity account reconciliations, and interest earned on cash balances.
“Taking account of the council’s original investment, the additional amounts required to settle residual liabilities and the subsequent recoveries through the liquidation, the final net cost to the council is approximately £39.3million.”
A major report by the city council’s external auditors Grant Thornton in September 2021 giving the ‘full picture’ of what went horribly wrong with Bristol Energy criticised the way it was set up in 2015 under then-mayor George Ferguson’s administration.
It said chances were missed by his successor Marvin Rees’s Labour cabinet to cut their losses, including in 2017 when the company was down by £19.8million, about half the final amount it would go on to lose.
The white flag was finally raised in June 2020 when the council decided to sell the business’s commercial and residential customer books.
Yu Energy bought the former in August that year and Together Energy purchased the household accounts the following month, along with the Bristol Energy brand, so what remained of the original firm was renamed BE 2020.
It was wound up through a voluntary liquidation, which meant the council had set aside enough money to settle all creditors.