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Friday, May 29, 2020

Council lends £5.5 million to Robin Hood Energy


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The energy company owned by Nottingham city council has been given an extra £5.5 million loan.
Robin Hood Energy (RHE) says it has seen a significant increase in customers in recent weeks, and needs the additional funding in order to ‘future-purchase’ energy.
But opposition councillors have criticised the move, and called for greater transparency over why the money is needed.

The Nottingham-based firm, which is 100 per cent owned by the Labour-run Nottingham City Council, was set up with a £20 million in taxpayer-funded loans in 2015.

Earlier this year, it reported a small profit, which was then re-invested in the business.
A spokesman for the company said: “Robin Hood Energy has this week agreed on a short-term interest-bearing loan of £5.5m repayable over two years to continue its growth story.

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“The decision to grant the funding was made by Nottingham City Council on Monday (17th December).

“The loan, in addition to the £20m, originally loaned when the business was formed, is on the same commercial terms that sees Robin Hood Energy pay 7.5 per cent interest on the loan.

“To date, the investment by Nottingham City Council has seen over £2m of interest payments returned to the council during its term.

“The specific terms of this additional short-term borrowing ensures it will be paid back within two years.”

Councillor Jim Armstrong represents the Wollaton West ward for the Conservatives.
He said: “This Labour council has increased the council tax at every opportunity, and then stands there and that they didn’t want to raise council tax but because of the Government it has to. It’s just laughable.

“We’re very unhappy with the way the council seems to be handling so called arms-length companies like Robin Hood Energy.

“Much tighter auditing controls need to be put in place.

“They have got a multi-million-pound business, which they tell us is worth £70 million, being operated by four Labour councillors who have no business acumen between them.

“I asked when they were given their last loan that if something like this happened again the board of Robin Hood Energy should come before the council and inform us, like a profit warning, because we didn’t want another Carillion happening in Nottingham.
“But the council takes absolutely no notice.”

A spokesman for Nottingham City Council said: “The council has provided a short-term loan to Robin Hood Energy (RHE) to be repaid on commercial terms over a two-year period.
“RHE has seen a higher-than-expected increase in customer numbers recently, gaining 11,000 extra residential customers and more than 800 business customers – an increase of 33 per cent – in the past 12 weeks alone.
“This rapid increase in turnover has required additional cash-flow support.”

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