LABOUR’S finance spokesperson and deputy leader Cllr Cathy Mitchell has accused Tory opposition members of almost wanting the council’s “high risk” investment in Together Energy to fail, following further concerns over a £52m exposure.
The exposure which was discussed at Monday night’s full council meeting, comprises the original £18M investment, the recently increased £20M revolving credit facility and the Orsted guarantee now reported at £14M.
Tory opposition Cllrs say this is another concerning increase of nearly £7M from the £45.3M potential exposure reported previously and relates to an increase in the amount now being guaranteed by the Council to Orsted, Together Energy’s energy supplier.
A further concern ahead, is that Together Energy must meet its £12.4M obligation to Ofgem, payment of this obligation is now due at the end of January, which the Tories say is a significant cash call on the company at a time when many energy suppliers are losing money or going out of business.
For the Conservative Group at Warrington Borough Council, the amount of public money that has been put at risk, in the support of Together Energy, by the Labour-led Council, following the Council’s purchase of 50% of the company two years ago, is of huge concern.
But Cllr.Mitchell says the Tory group appear to have overlooked that the value of the company’s hedge is still significantly more than the counbcil’s exposure, accusing them of “almost” wanting the investment to fail.Following the meeting Conservative Councillors commented as follows, Ken Critchley (Appleton Ward), “The increase in the potential liability to Together Energy is of extreme concern. This is a troubled company with a significant delayed payment to make at the end of January. We have been consistent in our view that this is a high-risk Council investment and one that should not have been made. It simply isn’t acceptable for the Labour-led Council to put more public money at risk. We need to see action being taken by this Labour-led Council to minimise the risk to council finances from the potential failure of this company.”
Mark Jervis (Appleton Ward), added “I find it hard to reconcile the comments made at the Warrington Borough Council Cabinet meeting on the 11th of October by the Leader and the Deputy Leader of the Council with regard to Together Energy, they variously, praised the due diligence of Together Energy and the strength of Together Energy’s hedging and forecasting, they said Together Energy is, “performing strongly“ and looks “really strong“ as well as “things are looking as good as they can be”. These comments are hardly credible against the reality that the taxpayers and people of Warrington are now facing, a situation with potentially £52 million of taxpayers money at risk to this loss-making company.”
Kathy Buckley(Lymm Ward) leader of the opposition Conservative Group added: “We would never have taken the decision to invest in such a high-risk company. It is in the best interest of the Warrington taxpayers for the Labour-led Council, to find a route out of this £50M plus financial exposure which minimises the loss of public money”.
But Warrington Borough Council’s Cabinet Member for finance, Cllr Cathy Mitchell, responded: “An important point which seems to have been missed (possibly deliberately) is that the value of Together Energy’s hedge is still significantly more than Warrington Borough Council’s exposure. The council’s position is being monitored on a daily basis and the Tories constant attacks are not helping anyone, neither will they make any positive impact on how this turns out. A lot of work is going on behind the scenes, which can’t be discussed in public due to the huge commercial sensitivities involved. We are working hard to protect this investment in the interests of the Council and are confident that we will be able to do so. It’s almost as though the local Conservative Party want the investment to fail.
“What they mustn’t forget is that it is the Conservative Government’s cuts to Local Authority funding – 60p in the pound since 2010 – that has forced councils to find other ways of generating income to pay for services. Warrington Borough Council is the 6th lowest-funded in the country. Two-thirds of our budget is spent on children at risk of harm and in providing care for adults of all ages. Our investments bring in a net figure of £20m to pay for these services. What would the Conservatives cut? Do they recognise that there is risk of a different kind entirely in cutting resources for those services? I look forward to seeing their alternative budget. The public deserve to know what they would cut. Time for the local Tories to be straight with people.”