250 jobs lost at Robin Hood Energy

Robin Hood Energy RHE), the troubled Nottingham City Council-owned community energy firm has been sold to Centrica, with 250 people losing their jobs.

Staff were told just after 3pm on Thursday September 3 that the company had been sold to British Gas-owned Centrica. The value of the deal has not been disclosed.

RHE has 112,000 residential customers (including former Labour leader Jeremy Corbyn MP) and around 2,600 business clients. They will transfer over to Centrica before the deal is finalised on September 16.

Chris O’Shea, Centrica chief executive, said: “We are delighted to welcome Robin Hood customers to British Gas. We are pleased to be able to offer every customer moving to British Gas a tariff which means their price will not be any higher and, importantly, they will be supplied with green electricity and have access to a range of other benefits.”

Council leader David Mellen said: “We know this is a very sad day for the business and its employees who have played a part in creating a more dynamic and customer orientated market for all energy consumers.”

The news comes after a disastrous year for Robin Hood Eenergy, which saw it lose more than £23m and replace most of its top brass.

A recent report has slammed Nottingham City Council for its governance of RHE after it had invested £43m of public money and provided £16.5m of guarantees.

Last week, Nottingham city councillors  adopted an Action Plan that it said will “improve governance arrangements” at the council as well as for Robin Hood Energy  and other council companies.

The Action Plan addressed recommendations made by the council’s external auditor in a Report in the Public Interest into the council’s governance of Robin Hood Energy Ltd, the energy firm it set up in 2015 to tackle fuel poverty.

The council held an extraordinary full council meeting on Thursday (August 27) to discuss the Action Plan, just over two weeks after the auditor issued the report which made 13 recommendations to the council.

The recommendations included urgently determining the future of Robin Hood Energy, with options properly evaluated and risks assessed; a review of how councillors are best used and supported on the boards of companies; ensuring that all board members have required knowledge and experience to challenge the management of companies; and ensuring that risks relating to the council’s companies are considered for inclusion in its overall risk management process, with appropriating reporting, rather than being seen in isolation.

Nottingham City Council had suspended senior staff at RHE, appointing industry experts and a new management team, setting up new arrangements to strengthen governance of RHE and starting a strategic review to consider all options for the company’s future.

City Council leader, councillor David Mellen, told the: “I want to make it clear that Nottingham City Council fully accepts the findings of this report which, despite our setting up of this energy company with good intentions to reduce fuel poverty in the city, reveals failures in the council’s governance of Robin Hood Energy.

“We very much regret those failings but we are here today to present a clear and robust approach as to how we will not only review our current approach to company governance, but also build on the changes that have already been put in place over the last year, and demonstrate our resolute commitment to do what’s right for Nottingham people.”

The full Action Plan agreed by councillors included:

• Reviewing the council’s approach to the ownership of companies and to councillor membership of its company boards
• Providing mandatory training for councillor and officer representatives on its company boards
• Reviewing the council’s approach to its own risk management and governance as well as risk management and governance of its companies
• Improving the clarity of roles of different committees involved in different aspects of the council’s companies
• Using external advice and best practice from elsewhere to help shape the way forward.

Councillor Mellen added: “We will ensure that not only our company but our overall Council governance arrangements are robust and strong, by learning from good practice in other companies we own and from other councils. We will learn from the mistakes identified and we will give reassurance that our actions are more than just mere words of regret. Constructive and meaningful change will follow.

“We are elected to represent the people of this city, and it is a privilege we do not take lightly. As custodians of the city, we will ensure that the best interests of Nottingham people are at the forefront of our improvement journey.”

The council says that many of the changes identified in the action plan will come into effect before the end of the year while longer-term solutions aim to be completed next year. There will be quarterly public reports to the council’s Executive Board and regular feedback provided to the auditor and updates on the council’s website, followed by a full report back to council in 12 months on progress in carrying out the actions in the plan.

It has been 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 deal a tumultuous year for Robin 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.