Future of community energy firm in doubt after auditor slams Council
Nottingham City Council has been blamed for many of the failing of community-based utlilites firm Robin Hood Energy after an independent report said it needs to “urgently determine” the future of the not-for-profit organisation.
An external auditor said that a review needs to take place on how councillors are best used and “supported on the boards of subsidiary companies and ensure all board members have the required knowledge and experience to challenge the management of the companies”.
Leader of Nottingham City Council, councillor David Mellen, said: “We accept the findings of this report which, despite our best intentions, reveal failures in the Council’s governance of Robin Hood Energy over the several years following the formation of the company.
“The report makes a number of recommendations to review our current practice of company governance which we are fully committed to carrying out. Some of the recommendations have already started to be put into place while a review of future options for RHE will be completed shortly.
“There is much more to do however and the Council is working hard to try to protect as much of its investment in the company as possible.”
The move comes almost six months after RHE posted losses of £23.1m over its 2018/19 financial year.
The performance slumped dramatically from a loss of £1.6m over the 2017/18 period after a 12 months that bosses at the firm called “tough”. Revenue improved from £69m to £97.9m over the same period.
The results marked a tumultuous year for Robon Hood Energy. Last year the firm had to ask Nottingham City Council for a £9.5m from Nottingham City Council to cover its green tax bill when it hit the headlines after entering into a dispute with industry regulator Ofgem about its Renewable Obligation Certificates (ROCS) payment.
Councillor Steve Battlemuch stepped down as chair of RHE in October last year amid growing concern over the company’s financial situation.
William Scott, deputy chair of the Conservative group at Nottingham City Council said: “It’s been obvious for years that Robin Hood Energy was a purely political project doomed to make massive losses for Nottingham residents. Labour have put ideology before common sense.
“Two years ago I publicly called for the resignation of their chairman at the time councillor Battlemuch and the CEO and FD of RHE, but they hid behind ‘commercial sensitivity’.
“Councillor Battlemuch has left council leader Mellon to take the fall, but it is Battlemuch who should resign as a councillor.”
Mellen added: “We very much regret the past failings in the Council’s governance of Robin Hood Energy. The change in leadership at both Nottingham City Council and Robin Hood Energy over the last year has seen changes in governance procedures and financial rigour. We now need to look forward and continue to make the necessary improvements including those recommended by the external auditor. We will continue to build on the work done so far but we fully accept there is much more to do over the coming months to address the findings of this report.”
