THOUSANDS of pounds will still be poured into Portsmouth City Council’s energy company every week despite a final decision to scrap it.
Lib Dem councillors yesterday voted unanimously to stop investing in Victory Energy – the same decision they made four months ago – on the basis it was ‘too risky’.
But it has been confirmed that the company will still cost £18,000 a week – and its chief executive Daniel O’Hara will be paid £750 a day – as it is marketed for sale.
Labour councillor Yahiya Chowdhury said: ‘It is a complete waste of money.
‘The council has already invested over £1.5m into it, and to continue putting £18,000 of the public’s money in every week is more waste.
‘What if they can’t find a buyer, what will happen then to that money?’
Losses could hit between £1.7m and £4m. A decision to axe the firm was made in July but Labour and Tory politicians insisted that was reviewed, culminating in the cabinet meeting yesterday.
The council hopes to recoup lost cash by selling the firm, which paid Mr O’Hara £270,000 in 17 months.
Potential buyers have contacted the city council.
But former council leader Tory councillor Donna Jones said: ‘The additional spend required to ensure Victory Energy is sold is necessary to ensure that the company achieves the best price possible. Whether all of that money will be recovered is another issue. But one thing that is certain is a gross waste of opportunity and potential income.’
Labour’s Judith Smyth, who had argued in favour of keeping the firm, said: ‘I know it is going to cost the council between £1.7m and £4m to get out although there are quite a few people interested. We can’t avoid it though.
‘It is a tragedy that the decision has been made. To me it shows a lamentable lack of ambition from our leadership.’
At the special cabinet meeting council leader Cllr Gerald Vernon-Jackson stuck by his party’s original decision to end public investment in the company.
He said: ‘This is a judgement call about the level of risk the council is willing to enter into and about risking taxpayers’ money. I am also aware that the council’s company MMD is having financially quite a difficult time and the council has had to subsidise that.
‘Having looked at that and all the other information I think the right choice is to go with option two that we won’t proceed with this. The level of risk is too high.’
Accountancy firm PKF Francis Clark is advising the council and is running the sale of Victory Energy.
Decision draws in councillors from all parties
THE meeting on Victory Energy garnered deputations from councillors of all parties.
For Tory councillor Ian Lyon it was clear the company should continue. Speaking at the meeting he said: ‘For its potential social benefits, the financial health and wealth it can bring to the city and for overwhelmingly positive political reasons, proceeding with (the company) is by far the better course.’
But Lib Dem councillor Hugh Mason believed more evidence was needed. ‘This report is an envision, an estimate,’ he said. ‘We need to test if this really does stand up. It is unclear how some of the figures are arrived at.
‘The future of the energy market is uncertain.
‘The cabinet needs more detailed information if it is to make a decision one way or another.’