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Nottingham city council’s failed energy supplier, Robin Hood Energy, has agreed to sell thousands of customer accounts to British Gas, and will make hundreds of employees redundant before closing later this year.
The council-run energy company, one of the first in the UK, informed staff on Thursday that 250 people would lose their jobs following a deal to sell its customer base to the UK’s biggest energy supplier.
The deal will result in 112,000 households and 2,600 business customers being transferred to British Gas, five years after Robin Hood Energy was set up to challenge the dominance of the UK’s big six energy suppliers.
The closure of Robin Hood Energy follows a damning report from auditors at Grant Thornton this summer which found that the not-for-profit company had lost a total of £34.4m by March 2019 despite receiving £43m of public cash and £16.5m of loan guarantees.
The report dealt a severe blow to the UK’s experiment with council-run energy suppliers, which had previously won the support of the former Labour leader Jeremy Corbyn, Scotland’s first minister, Nicola Sturgeon, and the London mayor, Sadiq Khan.
Nottingham council leader, David Mellen, said: “We know this is a very sad day for the business and its employees who have played a part in creating a more dynamic and customer orientated market for all energy consumers.”
Nottingham city council launched Robin Hood Energy in 2015 with the intention of offering customers green electricity at an affordable price. Bristol city council followed suit with Bristol Energy the year after.
But both council-run suppliers have struggled to stay afloat as a deluge of investor-backed challenger brands entered the market.
Robin Hood Energy reported a writedown of £24m on its loans this year, and a financial loss of £22.5m for the financial year ending in 2019 before putting its customers up for sale. The deal comes weeks after Bristol Energy put itself up for sale after reporting a loss of £10m for the 2018-19 financial year.
Chris O’Shea, the chief executive of British Gas parent company Centrica, said all customers joining the supplier from Robin Hood would be offered a green electricity tariff at the same rate as they paid before.
“We are delighted to welcome Robin Hood customers to British Gas,” he said.
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