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Nottingham City Council has absorbed a loss of more than £24 million from its investment in Robin Hood Energy, mainly by writing off loans to the supplier.
In its recently released accounts for 2018/19, the council revealed that the impairment also includes a £7.5 million write-down on the value of its shares in the company, which are now valued at “nil”.
The local authority launched the not-for-profit energy supplier in 2015 to help tackle fuel poverty among residents in the city and now provides white-label tariffs for a number of other council-owned suppliers.
Robin Hood Energy is currently undergoing a strategic review in which “all options” for the business are being considered.
A council spokesperson said it had been recognisable “for some time” that the long-term financial outlook for the energy retailer was “not sustainable” for the local authority.
The spokesperson said: “Nottingham City Council’s accounts cover a wide range of financial movements and adjustments and are published on an annual basis. These accounts, which relate to the period for 2018 to 2019, contain an impairment of £24 million in relation to Robin Hood Energy.
“It has been recognised for some time that the long-term financial outlook for Robin Hood Energy was not sustainable for the council. As such, the decision was taken last Christmas to bring in a new management team to stabilise Robin Hood Energy’s finances and to undertake a comprehensive strategic review to consider all options for the future of the company. This review will be completed shortly.”
In December 2019, Robin Hood’s chief executive Gail Scholes and chief finance officer Robert Bain were suspended from their roles and an internal investigation launched. In March this year, the supplier reported a £23 million loss for the 2018/19 financial year.
It was also revealed last year that Robin Hood Energy was one of four suppliers that had missed the deadline for making buyout payments under the Renewables Obligation scheme.
Nottingham City Council loaned the company £9.4 million to pay off the debt, and a further £2.7 million the following February to assist with cashflow through the winter season.
Elsewhere in the sector, Bristol Energy has been put up for sale by Bristol City Council after the authority invested more than £36 million into the publicly-owned retailer.
Mayor Marvin Rees blamed a volatile marketplace for the decision to exit and said the company had faced continued challenges since being established by his predecessor.
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