Victory Energy axed in 2018 still costing Portsmouth council taxpayers £2,000 a month

AROUND £2,000 a month is being spent on the council-owned energy firm nearly two years after councillors agreed to wind it down.

Monday, 10th August 2020, 4:30 pm

Victory Energy has amassed £3.2m in debts, latest public accounts show, with creditors owed more than £3m.

But now The News can reveal taxpayers are still financing the firm with around £2,000 a month, as directors still hope the firm can be sold.

‘Potential purchasers’ have come forward, its owner Portsmouth City Council said, despite a failed attempt to sell the firm last year.

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Defunct council-owned company Victory Energy sponsored Portsmouth Football Club in March 2018 in a three-year deal. A sign shown the now-closed public firm at Victory Lounge, Fratton Park, in Portsmouth.

The doomed firm was the subject of political football - set up under the Conservative administration led by Councillor Donna Jones before being scrapped by Lib Dem-run council in November 2018.

Sector watchdog Ofgem revoked the firm’s gas and electric supply licences as it did not supply energy in the first year of gaining a licence.

But Victory Energy still has a valuable gas shipper licence. Any prospective buyer would take on the £3.2m debts - but would also have the licence.

Councillor Gerald Vernon-Jackson, Portsmouth City Council leader, said it was right to have pulled the plug on the firm.

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Ofgem revokes licence for Victory Energy

He pointed to Nottingham City Council’s Robin Hood Energy having lost £23.1m in 2018/19, and said if Victory Energy suffered a similar fate, it could have bankrupted the city council.

Bristol Energy, owned by Bristol City Council, is being sold with losses of £32.5m.

He said: ‘In Portsmouth we managed to dodge a bullet and keep the losses at one tenth of what they have been in Bristol and in Nottingham.

‘It’s just something the council shouldn’t have done.’

He added: ‘Thanks heavens we shut it down before much bigger losses - it would have had the potential to bankrupt the council.’

Selling the firm would allow the council to recoup some of the £3.2m losses, he said.

The News previously revealed the firm entered a near-£100,000 sponsorship deal with Portsmouth Football Club to advertise its brand at Fratton Park.

A council spokeswoman said: ‘Victory Energy remains a going concern in order to ensure it is ready for sale.

‘The company is attracting interest from potential purchasers and the subsequent sale of Victory Energy would see liabilities transferred to the new owners.

‘We have kept creditors updated and they are aware of the rationale behind selling the company in its current state.’

She added: ‘To maintain Victory Energy as a going concern and ready for sale, Portsmouth City Council incurs costs of £2,000 per month to ensure compliance with regulatory requirements.’

A message from the Editor, Mark Waldron

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