New findings on Victory Energy could change its fate

PORTSMOUTH councillors could backtrack on a controversial decision after a report shed new light on the viability of a council-owned company.

Thursday, 22nd November 2018, 7:11 pm
Updated Thursday, 22nd November 2018, 8:17 pm
A new report paints a profitable picture of Victory Energy
A new report paints a profitable picture of Victory Energy

Following a call-in by Labour and Conservative members in September, yet another probe into Victory Energy yielded very different results which will be considered at a special cabinet meeting on Tuesday.

The most recent predicted figures for Victory Energy, that was scrapped back in July, show the company had the potential to bring in £22m to Portsmouth City Council after five years, almost ten times the previous estimation of £2.5m.

Using the findings of independent reviewers PricewaterhouseCoopers (PwC) and Baringa, it was also revealed that the most the council would have to invest into the scheme in one year would be £4.5m, £2m less than originally thought.

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A new report paints a profitable picture of Victory Energy

It comes after The News revealed that Victory's chief executive Daniel O'Hara is being paid £270,000 a year for setting up the company, even though it is not yet operational. In total Victory's staff costs are £18,000 a week.  

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Portsmouth council paid £750,000 to six staff at taxpayer-owned Victory Energy...

For former council leader, Cllr Donna Jones, the statistics were conclusive. 'The updated report makes it crystal clear that Victory Energy is a very investible business,' she said.

'It makes it clear to anyone reading and understanding the business case that Portsmouth City Council and the Lib Dem administration would be mad not to continue this energy company that is set to make millions of pounds profit for Portsmouth residents.

'That is the exact reason I created it in the first place.'

During the call-in, Lib Dem councillors including Cllr Darren Sanders and council leader Cllr Gerald Vernon-Jackson had raised fears that Victory Energy would not offer customers the best price.

But the report detailed that Victory Energy would cost customers £1,107 a year at a 13-month, fixed rate contract. This was the second cheapest from a list of 11 comparable energy companies, with First Utility the most expensive at £1,232 a year.

Cllr Jones added: 'The Conservatives set about building a hugely profitable business that also has a positive social impact.

'The company will put its profits into the local community which is another example of why this company should continue.'

'It would be extremely disappointing if the Lib Dems vote to scrap it again, it would be depriving the people of Portsmouth millions in spending. As a result public services would have to be cut and reduced which would be a travesty.'

Lib Dem councillors will consider the report on Tuesday, with deputations expected from other party members.

Cllr Steve Pitt, the deputy leader of the council. said: 'We look forward to taking the opportunity to hear opinions from all parties at next week's meeting.

'We are carefully considering all of the information available to decide on the best way forward.'


Key findings of the report:

Five year investment return is up from £2.5m to £22m Ten year Investment return is up from £50m to £63m Peak investment requirement is down from £6.5m to £4.5m (in year two) Victory Energy is able to fund the warm home discount and return a profit Victory Energy has a lower tariff than private and municipal alternatives It could provide 100 per cent renewable electricity to residents and businesses