Southend Council’s energy firm partner makes £23million loss in a single year

The company that is key to keeping Southend Council’s energy firm in business has posted losses of £23million.

The council said customers who signed up to Southend Energy have no reason to be concerned and do not need to consider finding a new supplier.

When Southend Energy was formed in 2015 to help residents lower their bills, the council took care of the management of the company while OVO Energy operated it.

But when negotiations to extend a contract beyond an initial five-year period collapsed in 2018, the council looked to Nottingham Council’s Robin Hood Energy (RHE) to become the new operator.

They entered into a partnership in March of this year but just weeks later, RHE filed accounts that showed it had losses of £23.1million between the start of April 2018 and the end of March 2019.

Councillor Meg Davidson, deputy leader of Southend’s Conservative group, said “red lights” had been visible for some time.

Cll Carole Mulroney (LibDem), who oversees environment and planning, denied it means RHE is in trouble, pointing out it was a difficult year across the industry.

“The 2018-19 financial period was a very challenging time for all energy providers, with ten going bust and the majority posting significant losses,” she said.

“Robin Hood Energy have a new management team in place who have been tasked with improving the financial performance, so they can help more people in fuel poverty and vulnerable customers.”

She added that there is “no need to worry” and “no reason to move supplier as a result of the reported loss”.

But Cllr Meg Davidson (Con) said the council should have pulled out of the deal in October last year when RHE was chased for more than £9million by energy regulator Ofgem when it failed to pay a renewables energy bill.

It was a bill that eventually had to be settled through a loan from it parent organisation, Nottingham Council.

“There were good intentions with Southend Energy which was aimed at reducing energy bills,” she said.

“It was designed to help people and make it easier for them.

“I see why they wanted to do this but there were red lights flashing on the dashboard.”

She added that she would be “very surprised” if the financial situation had improved in the past 12 months but assured residents that Ofgem would protect their supply should problems with the supplier cause Southend Energy to have to close.

Robin Hood Energy Interim CEO Jeff Whittingham said his team had “already identified a number of cost saving initiatives” and they hope to see the benefits in the future.

Advertisement

Steve Shaw

Local Democracy Reporter