Bristol City Council pays EY consultants £200,000 for report

11 June 2020 3 min. read

As Bristol’s Mayor looks to offload the city’s failing energy company which has run at a loss of more than £30 million, details have emerged that he hired EY to examine a potential sale. EY reportedly received almost £200,000 to assess the firm’s structure and future viability.

Bristol Energy is a municipally owned energy supply company, supplying gas and electricity to domestic and business customers across the UK. Bristol City Council made a decision in principle to create such a company in 2010, as part of its Climate Change and Energy Security Framework. In February 2015 a business plan was produced, which was approved by the council cabinet in July 2015. The company began taking customers in February 2016.

In the years since its launch, however, the entity has seen a steady decline in its financial performance. Former Mayor George Ferguson was ousted from office just three months after Bristol Energy opened for business – with the local authority having already invested £6.3 million in it, according to Companies House records. The situation has only worsened since, and Bristol Energy has been handed £36.5 million of council taxpayers’ money since it was formed, while posting losses to date of £32.5 million.Bristol City Council pays EY consultants £200,000 for reportIn 2018, the beleaguered company saw its business deteriorate further, with the strange news that it had lost the contract to supply energy to Bristol City Council itself. The news came as British Gas marginally undercut Bristol Energy on price. With losses on the venture piling up, pressure mounted on incumbent Mayor Marvin Rees to take action – resulting in the hiring of consultants from EY to chart a course ahead.

EY’s consultants received almost £198,000 for a full assessment of the firm’s structure and future viability. The report, which ultimately recommended Bristol Energy’s sale, was discussed during the public forum at a city council cabinet meeting, before members went into exempt session where they agreed to sell the debt-ridden company.

The meeting saw tensions surrounding the creation and subsequent struggles of Bristol Energy quickly reach boiling point. According to the Bristol Post, Mayor Marvin Rees clashed angrily with opposition councillors over Bristol Energy, as it emerged what the EY consultants had been paid – particularly considering how much the council had already pumped into the floundering entity.

Responding to criticism from Tory Councillor Geoff Gollop, who was cabinet lead for finance in 2015 when the decision was made to create Bristol Energy, Rees accused him of having “totally ignored the part you played in putting this city in this situation.” He further stated he had watched cabinet meetings from 2015 on YouTube where Gollop had defended the decision to create Bristol Energy and minimised the risks.

Rees noted, “Unfortunately, entering the energy business is not like going into the florist business. It’s incredibly expensive to get into, it’s very expensive to operate in and it’s very expensive to get out of. That was another financial mess we inherited from yourself as the lead for finance, alongside the 30-odd million pound black hole we discovered in the council’s budget.”

Gollop responded, “It is quite incredible that you on every occasion quote decisions taken in 2015. You proved with the arena that you can turn those decisions around because you have absolute power in Bristol. The council has not responded to questions asking why it involved EY in the first place and what it got for its money.”