Council again defends “high risk” investment in Together Energy

LABOUR controlled Warrington Borough Council has again defended its investment in Together Energy following further criticism from opposition Tories, who say it is a high-risk investment which the council should walk away from.

Describing Together energy as a “leading” company in energy demand forecasting the council says it is aware of the energy price situation during turbulent times in the industry.

But following the recent turmoil in the energy supply sector, the Conservative Group has again expressed serious concerns that additional funds appear to have been lent to Together Energy by the Borough Council describing the financial viability as “high risk.”
At the Audit and Corporate Governance Committee meeting held on the 23rd September Conservative Cllr. Ken Critchley, asked if the Council’s exposure to Together Energy had increased above the £41.2 Million exposure identified in the draft Statutory Accounts. The answer he says he received implied that there had been no increase in the council’s exposure.

Cllr Critchley said: “It is extremely worrying to learn from the Council’s Cabinet Meeting papers issued on Monday the 4th of October, that the potential exposure to Together Energy had increased to £45.3M an increase of £4.1 million in just over a week and a half. The jump in exposure is attributable to a £4M increase in the loans Together Energy has from the Council, now standing at £20M.
“The Conservative Group have been warning about the risks of being sucked in to further financial support for Together Energy, the Conservative Group proposed a motion at the last full council meeting that called for an end to the Council’s investment in high-risk assets specifically naming Together Energy, a motion voted down by both Labour and the Lib Dems.
“The Conservative Group remain enormously concerned that now the Council appears to be doing exactly what we have been warning about, lending more money to Together Energy and increasing the Council’s exposure to this loss-making company. The speed of the increase in the potential exposure also raises the question about why a £4 million increase in the money at risk was authorised.
He says the details of the “Together Energy Update” were reviewed at the Cabinet Meeting on the 11th October but controversially further information was restricted to the part two section which excluded the details of what is being considered from public and opposition elected member scrutiny.
The Conservative Group has now called for a full public announcement of what is going on with Together Energy, which they say is “a loss-making, start-up, energy company” which now the council has potential exposure to of £45.3 million and potentially even more after the secretive part two Cabinet meeting.
Cllr Critchley added,” For the Council to have £45.3 million exposure to Together Energy, an exposure which has grown in two years from the initial investment of £18 million, is a frightening level of risk for the council taxpayers and residents of Warrington.
“For the decisions that potentially leads to further exposure, to avoid opposition members scrutiny and public visibility goes right to the heart of the lack of openness, transparency and accountability of this Labor-run council.
“The time has come for complete transparency regarding the Council’s strategy in relation to Together Energy.
“This has been a bad investment from the start, Together Energy is a loss-making start-up in a sector hit by multiple company failures, sometimes the best decision is to walk away from a failing investment rather than pumping in more good money after bad. The Council need to come clean about what is really going on at Together Energy. The Council are investing public money. It’s not a game for the people of Warrington who will bear the consequences of a failure of the Council’s investment in this Company.
A Warrington Borough Council spokesperson said: “We are aware of the energy price situation and it is only right we continue to review our investment, as with all other investments we make.
“In the turbulent energy price market, with external advice, we are considering a range of options.
“However, Together Energy has adopted a prudent hedging and energy purchasing strategy and is nationally one of the leading companies in energy demand forecasting.”

Call for council to carry out urgent review and exit from investment in Together Energy