Nottingham City Council-owned Robin Hood Energy has been sold to Centrica. Some 250 staff have been told they face redundancy, according to the Nottingham Post.
Robin Hood Energy made a £23m loss for 2018/19 and a cumulative loss of £34.4m according to a damning report by auditors published last month, which states Robin Hood Energy was on track to make a £12m loss for 2019/20.
As of 31 March 2020 the council’s liabilities, including guarantees for the firm stood at £59.6m.
Robin Hood initially made a small profit in 2017/18, though this was later restated as a loss. It faced growing financial pressure the following year and repeatedly returned to the council for loans.
Relations between the company and the council became increasingly strained as its financial position fluctuated along with market and regulatory developments. In October 2019 Ofgem ordered it to pay £9.5m in overdue Renewables Obligation (RO) payments within 30 days, leaving the council having to bail out the firm or risk it being stripped of its licence. The RO loan was due to be repaid this month.
Three weeks after receiving the loan, Robin Hood approached the council for another £4.5m in November. Its bosses were dismissed just before Christmas, with an interim senior management team, including former Ørsted UK boss Jeff Whittingham, Mike Thomas and David Bird, brought in to try and stem losses.
Robin Hood Energy is the supplier for several other councils through white labelling agreements, which had initially underpinned its growth plan.
The firm has 112,000 residential customers, and 2,600 business customers across 10,000 sites. Completion of the transaction is expected on 16 September.
British Gas lost 286,000 customers last year.
This exposes the folly of councils getting involved in business they really don’t understand.