THE defunct council-owned firm Victory Energy signed up to a near-£100,000 sponsorship deal with Pompey just months before it was lined up for the axe.
The Portsmouth City Council-owned firm, which has been shelved after bosses failed to sell it, struck a three-year £97,754 deal with the Blues in March last year.
Just weeks later in July plans were unveiled to axe it when Liberal Democrat leader Gerald Vernon-Jackson took over the council from Tory Donna Jones. More than a year later Cllr Vernon-Jackson pulled the plug on the firm.
Signs were put up at Fratton Park advertising the business before it had launched. People could register their interest on its website, which remained live yesterday.
Independent councillor Jeanette Smith wants a full inquiry by the city’s chief auditor into the firm. She said: ‘The money wasted is £3.5m or £5m. That’s the potential losses. That’s a waste of money.’
Clllr Smith added: ‘This was advertising something that didn’t exist at that time, and it doesn’t exist now.’
Months of political wrangling followed before the company was finally axed. The News revealed how the public company paid consultants £474,000 and its chief executive £270,000 in 17 months.
Condemning the sponsorship deal, Councillor Vernon-Jackson said: ‘Every single pound of that sponsorship money is paid for by taxpayers.
‘This is taxpayers’ money that was paid out by a company that hadn’t even been launched.’
Directors of the public company are working out how much is owed to creditors. Chris Ward, city council finance director, said: ‘Until that process is complete, which could take several weeks, the directors of VESL are unable to make a decision as to whether to follow a solvent or insolvent liquidation.’
TaxPayers’ Alliance chief executive John O'Connell said: ‘I applaud the current council leader's decision to close down Victory Energy, but this sponsorship should never have come to pass.
‘Time and again, whenever local authorities and devolved governments set up such firms, they crash and burn.
‘The cost of a duel-fuel bill is an understandable concern to many households, but in future, politicians should avoid these schemes and stick to their statutory duties.’
Victory Energy paid £85,000 for the sponsorship, along with £12,754 for signage, production and fitting.
The club said it could not comment about a commercial partner.
Cllr Jones, who remains a director of Victory Energy, became strategic stadium development consultant at Portsmouth FC last year.
The Portsmouth South parliamentary candidate insisted she was not part of any discussions about the sponsorship.
She said: ‘I can’t comment on this one because I was not involved in the original decision.
‘Whenever we’ve discussed anything to do with the football club I’ve had to step outside the room.
‘Now that the company is no more when we’ve been talking about creditors and things like that I’ve had to reiterate that - I’ve declared it the whole way through.
‘Whenever that is discussed I’ve stepped outside the room.’
Last month it emerged buyers ‘wouldn't even pay £1’ for the energy firm. Cllr Jones had announced the company and hoped it would net millions for the city council.