COUNCIL-OWNED energy company Victory Energy has been axed by Portsmouth City Council’s administration – with plans to sell it off.
In the latest in a series of meetings held over the future of the energy company, the ruling Liberal Democrats said the venture would be 'too risky' in a move that will lose more than £2m of invested cash.
It is estimated between £1.7m and £4m will be lost, Portsmouth City Council said.
At a special cabinet meeting this morning council leader Councillor Gerald Vernon-Jackson stuck by his party's original decision made earlier this year to end public investment in the company, which paid £270,000 to its chief executive over 17 months.
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.'
A decision was made back in July to axe the company but that was called in by Labour and the Conservative opposition groups on the council.
It meant the decision was sent back to cabinet today to be reconsidered.
A report to today’s cabinet meeting said the company had the potential to bring in £22m to the council after five years, almost ten times the previous estimation of £2.5m.
Deputy leader Cllr Steve Pitt agreed and said: 'In relation to the mention of losses to date we have to set that to one side because that's already happened.
'I know from experience that's not in itself good reason to continue a business.
'It's about risk and the ability to manage that risk.
‘In the financial climate we are in right now and the financial pressures of the council, particularly surrounding children and adult social care, we should be making sure we are as careful as we can be.
'I believe to throw more money at this would be a mistake.'
But Cllr Donna Jones, former council leader and leader of the Conservative opposition, said the decision was not the one she had hoped.
Cllr Donna Jones said: 'This is a hugely disappointing decision and completely at odds with the Lib Dem's own stated desire in approving income generation strategy at the last full council meeting.
'They have failed to continue with investment into the most investible energy supply company in the UK market. This is a short-sighted decision, one I fear will cost the most vulnerable people of our city millions of pounds.
'However, I believe this is not the end of Victory Energy. It will be bought by a private sector company and will make millions of pounds, just not for the people of Portsmouth.'
Lib Dem cabinet members voted unanimously to shut Victory Energy down.