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BRISTOL: Bristol Energy defence

BRISTOL: Bristol Energy defence

Image: via Pixabay

An independent report that condemned how the city council made decisions about Bristol Energy was not a “fair reflection” of what happened behind closed doors, the deputy mayor insists.

Auditors Grant Thornton’s value-for-money report, published in January, criticised the governance arrangements for the council-owned company as “inadequate” and said the Labour cabinet was not properly informed before it invested more money in the firm months before it failed.

But deputy mayor for finance, governance and performance Cllr Craig Cheney says it is “impossible” for the auditors to know what was said during private discussions between himself, mayor Marvin Rees and the rest of the cabinet.

He also said he had to speak like a “salesman” about Bristol Energy in public while it was still running because the industry depended on confidence in such ventures, and that leaked information which raised doubts over its future led to creditors pulling out, making it more expensive.

The business lost up to £43.8million of taxpayers’ money, with the final figure still being counted as administrators complete the process of winding up what remains of it in a members’ voluntary liquidation following its break-up and sale last year.

Speaking to The Cable’s Bristol Unpacked podcast, Cllr Cheney, who is the authority’s shareholder representative at parent company Bristol Holding meetings, said: “All that Grant Thornton have access to are the public meetings.

“What they don’t have access to are the conversations that me and Marvin and the cabinet may have in private session.

“So it’s impossible for them to know, really.”

He said the external auditors’ report included lessons about how those exempt meetings should have been recorded in minutes so there was a paper trail of decisions.

“Some of that stuff we’ve taken forward, but I don’t think that was necessarily a fair reflection,” Cllr Cheney said.

“What that really meant was that ‘In the public cabinet meeting when you discussed it, you didn’t explain x, y and z’.

“But what they did point out was that because public meetings were exempt, they were not able to see them and we hadn’t minuted those meetings.

“So some of that stuff was actually mentioned in the publicly exempt meetings because we are very thorough and we have a legal team that goes through these things in advance.”

Grant Thornton’s report, which covers Bristol Energy’s last full financial year of trading in 2019/20, said information the cabinet received from the shareholder group was “inadequate”, “did not clearly state the risks”, and was “out of date”.

It said the business plan was “unrealistic” and the council’s audit committee should have had “closer involvement” with the issues.

When it was published in January, mayor Mr Rees said the local authority took “reasonable, well-governed decisions informed by independent advice and scrutiny” and that the governance had been open and transparent.

He said the issues were “well aired during exempt sessions of cabinet and all sides were able to comment, including scrutiny groups”.

“Decisions were made appropriately with eyes open to the issues and risks, so it is frustrating that this wasn’t as well-evidenced in the records as it could have been,” Mr Rees said.

Asked by Bristol Unpacked host Neil Maggs on the podcast, released on Friday, November 19, if he accepted the charge that what was being fed back to cabinet did not paint a grim enough picture of the company’s prospects and that the delays ultimately cost more money, Cllr Cheney said: “No, I don’t think so.”

“The problem is when you’re in a business like the energy business, the public face of it has to be positive.

“You’re a salesman whenever you stand up and talk on behalf of the company.

“We had a few bad reports by a few other people in the council leaking details and suddenly the creditors for the company disappeared, and when you can’t get free lines of credit you have to start buying credit which costs you more money.

“So you have to walk a very difficult tightrope of trying to be as transparent as you possibly can while also making sure that while you’re in public you’re not doing things that actually make the position worse for the company. You have to talk it up.

“This is why it’s very difficult for local authorities to be involved in quite complicated markets like that and probably why we wouldn’t have got into it in the first place.”

Words: Adam Postans, Local Democracy Reporter


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