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Robin Hood Energy Goes Bust

September 7, 2020

By Paul Homewood

 

 I’ve been covering developments at Jeremy Corbyn’s energy supplier, Robin Hood Energy, for a few years now:

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A council has apologised after losing millions of pounds of public cash in the collapse of an energy company it started.

Robin Hood Energy (RHE) is shutting with the loss of 230 jobs despite millions poured into it by Nottingham City Council.

British Gas will take on its customer base of thousands of homes in England.

The council said the sale will not make up all its losses, which leaked documents suggest are £38.1 million.

Council leader David Mellen declined to say how much it stands to lose, saying the total from the sale will depend on how many customers switch to British Gas.

However, leaked documents seen by the Local Democracy Reporting Service suggest the taxpayers of Nottingham are out of pocket to the tune of £38.1 million.

The confidential documents show the sale price for the customer base of RHE is estimated by the council to be around £26 million.

The final exact figure will not be known until the transfer of customers to British Gas is complete, but the £38.1 million write-off is the council’s estimate.

https://www.bbc.co.uk/news/uk-england-nottinghamshire-54015033

 

 

As we say goodbye, maybe we should remind ourselves what Robin Hood Energy themselves promised to do:

 

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https://robinhoodenergy.co.uk/our-mission 

 

Sadly, 230 employees have had to pay the price for Nottingham City Council’s left wing ideology.

41 Comments
  1. Broadlands permalink
    September 7, 2020 2:12 pm

    Wasn’t Robin Hood the guy who took from the rich to give to the poor? Now it works the other way?

    • September 7, 2020 11:42 pm

      Broadlands – that was Dennis Moore on his horse Concorde! ‘silly bitch, silly bitch, silly bitch!’

  2. September 7, 2020 2:17 pm

    How they can possibly claim their customers received all green energy and saved umpteen tons of Co2 emissions is beyond me!

    • September 7, 2020 2:24 pm

      ‘Energy denier’

      GLM…Green Lies Matter

      • Harry Passfield permalink
        September 7, 2020 6:37 pm

        More like Green Lies Mantra. It’s all we hear.

    • Robert Jones permalink
      September 7, 2020 7:18 pm

      They can’t, in absolute terms, on either of their claims. But they will have bought some paperwork from a small member state within the EU which gets around the truth problem.

  3. Dick Goodwin permalink
    September 7, 2020 2:21 pm

    No problem, everyone just stay connected to the network and get electricity for free.

  4. TimRules! permalink
    September 7, 2020 2:34 pm

    To be fair, they *did* nail the not-for-profit part, so that’s … something.

    • Nancy & John Hultquist permalink
      September 7, 2020 4:59 pm

      “Now that there is funny!” [Larry the cable guy.]

    • Phillip Bratby permalink
      September 7, 2020 8:27 pm

      Precisely my first thought. As usual, the council (Labour) lost other people’s money. The last things local councils should be allowed to do is to get involved in business activities, They struggle to manage bin collections, let alone recycling.

  5. Pancho Plail permalink
    September 7, 2020 2:57 pm

    So they didn’t have private shareholders watching their every move. What a shame for the customers and council tax payers of Nottingham.
    It gives the lie to the expression “socialist enterprise”.

  6. Thomas Carr permalink
    September 7, 2020 3:11 pm

    Councillors are assumed to have the responsibility if not the competence. Senior officers fulfilling the decisions of the Councils are reluctant to assume responsibility but are presumably competent.

    • Penda100 permalink
      September 7, 2020 3:58 pm

      Just not at running an energy business

  7. Brian J. Baker permalink
    September 7, 2020 3:25 pm

    Robin Hood = Robing Hoodlum

  8. markl permalink
    September 7, 2020 4:12 pm

    Energy, especially of the renewable variety, are the new tulip bulbs.

  9. dearieme permalink
    September 7, 2020 4:27 pm

    Be fair, they certainly proved to be not-for-profit.

  10. CheshireRed permalink
    September 7, 2020 5:27 pm

    This comes as a great surprise….said absolutely nobody.

  11. Nancy & John Hultquist permalink
    September 7, 2020 5:31 pm

    The council should have their photo on the wall of shame.
    There are many others.
    Georgetown, Texas,
    fixed-price renewable energy deal; Oops!

    Washington State: City of Ellensburg removing wind turbines
    OPM’s gone as the city’s wind tower falls over

  12. It doesn't add up... permalink
    September 7, 2020 5:39 pm

    Robin Hood, Robin Hood
    Riding through the grid fault
    Robin Hood, Robin Hood
    With his bands of charging
    Greened just a tad
    Till it all went bad
    Robin Hood, Robin Hood.

  13. yonason permalink
    September 7, 2020 6:13 pm

    Robin Hood Energy has bad news for it’s investors and it’s customers. Maybe they need to just tell us in a way that will soften the blow?

  14. Harry Passfield permalink
    September 7, 2020 6:20 pm

    I really, really hope that someone is keeping an eye on the spending habits of councillors and their families. I understand that the disclosures for councillors is very strict. I do hope so. I also hope they can be surcharged for a slice of the losses. They have earned it…

    • Steve permalink
      September 8, 2020 9:00 am

      Blair did away with surcharging councillors. They’ve been wasting money in large amounts ever since.

  15. Mad Mike permalink
    September 7, 2020 6:24 pm

    Councils find it difficult to run services properly and cost effectively so what chance did they have when they encounter competition?

    £26 mn for 130K customers? Is that a joke? I’m not in the business but paying £200 for a customer who could leave you at the press of a button doesn’t sound realistic or plausible. How long would you need to keep them to make a profit out of said customer? In 2017 the churn rate of customers was around 15% PA and higher in smaller companies like RHE probably because smaller companies attract customers who are already shopping around. I don’t suppose the figure is any less today.

    A disgraceful episode.

    • September 7, 2020 7:02 pm

      I guess the B Gas offer is the max based on the number of customers they keep – a bit add on bonuses for Kai Havertz!!

      The deal will in reality be worth much less

  16. ThinkingScientist permalink
    September 7, 2020 6:39 pm

    Reiterating my comment that I posted on the previous article on RHE on 13 August 2020:

    From the auditors report:

    The Council decided to make significant additional loans to [RHE] on several occasions during 2018/19 and 2019/20. Had it not done so, [RHE] would have immediately failed, and the Council would have lost most of the value of its existing stake in it, with £47.4m at risk at the time when the largest loan was requested in October 2019.

    I asked: And how much do they stand to lose now?. It would appear the answer is £38.1 Million.

    One of the golden rules of business is to only evaluate project viability on a point forward basis, not to consider “sunk costs”. There is even an old adage for it – “Never throw good money after bad”. And gamblers also a have a phrase for it – “stop chasing your losses”

    WTF is a council doing trying to run an energy company? And does it not occur to them that if we didn’t have stupid climate change commitments and renewable energy we WOULD have cheap electricity?

    Years ago I recall a claim by the head of Johannesburg City Council that they should be paid as much as a CEO of a company because they deal with budgets as large as businesses.

    A real CEO of a company wrote in to the Business newspaper to point out the fallacy of that claim: any fool can spend a large sum of money, but a real businessman has to actually create the wealth.

    • Phoenix44 permalink
      September 8, 2020 8:18 am

      Yes, forcing people to hand you cash is a rather different skill level than persuading people to hand you cash.

  17. Sean permalink
    September 7, 2020 7:51 pm

    “Dendis Moore, Dendis Moore, riding through the glen. Dendis Moore, Dendis Moore, on his horse Concord. Steals from the poor, gives to the rich. Stupid bitch.”

  18. tom0mason permalink
    September 7, 2020 8:32 pm

    Now what Nottingham really needs is tidal power.
    I know this nice man who owns a quarry in the West of England and he say he can do it … [to be continued]

    😉

  19. Ted permalink
    September 7, 2020 11:11 pm

    Don’t be too harsh. They achieved one part of their mission. The ” Not for Profit ” part.

    • Duker permalink
      September 8, 2020 1:28 am

      They didnt generate a single kWhr, they were only a middleman, how could that go so wrong?
      Seems like a whole string of privately owned ‘middlemen suppliers’ have gone bust leaving unpaid bills.
      The bigger story seems to be that so called renewals obligations arent being paid by some other ‘suppliers’ like RHE and the costs are passed on to the mugs ( or mutualised as they call it) still trading in ROs.
      Its a more than 100 mill pound scam
      https://theenergyst.com/suppliers-face-44m-tab-f/
      £100m tab for failed energy suppliers

  20. It doesn't add up... permalink
    September 8, 2020 1:47 am

    Not the only one lately:

    https://www.ofgem.gov.uk/publications-and-updates/ofgem-appoints-octopus-energy-take-customers-effortless-energy-ltd

    Going under at the end of summer probably means losses for customers paying a set monthly amount, because their consumption will have been considerably below the annual average, so they will have credit balances. It also avoids paying those nasty bills for ROCs that come out at this time of year – that nearly sunk Robin Hood a year ago, and did for several others.

    https://www.ofgem.gov.uk/publications-and-updates/ofgem-orders-four-suppliers-pay-147-million-renewables-obligations-31-october-2019

    We can expect another rash of announcements at the end of the month.

    Interesting thought: if the companies haven’t paid their ROC bills, are they trading under false pretences when they claim to have been buying green electricity? All they’ve paid for is the brown stuff.

  21. September 8, 2020 2:26 am

    Well at least they did prevent 128000 tons of CO2 from being released into the atmosphere equivalent to 0.00035% of annual global emissions. If 287000 other communities around the world had joined them in that endeavour they could have broken even.

  22. Phoenix44 permalink
    September 8, 2020 8:19 am

    So do we think these Lefties have learnt a single iota from this fiasco?

  23. Eric S permalink
    September 8, 2020 10:54 am

    They certainly achieved the “not for profit” business aim.

  24. Athelstan. permalink
    September 8, 2020 12:15 pm

    dottingham council loonies had £15.6 million ‘invested’ in an Icelandic hankipanki bank, they got half back.still.it was a bonkers investment and left rate payers with a major shortfall.

    Some real financial geniuses work at dottingham council.

    Only God knows what other financial jiggerypokery they’re up to and it’s not just dottingham. As covid unravels the UK economy and people stop paying businesses and all. the councils dodgy bank balances and borrowing liabilities and commitments on borrowimg based regarding predicted ‘income’. Without a doubt, so many large met councils will be declared bankrupt/
    In the long term, this might not be such a bad thing, financially, polically and with a view to proper scrutiny. The collapse of giant councils should, must lead to local towns and villages begin to run their own affairs again.

    That would be an excellent outcome, small is more beautiful and better accountable.

  25. Harry1962 permalink
    September 8, 2020 8:15 pm

    If Panorama producers thought about it, Robin Hood Energy and NCC, are ripe for one of their documentary investigations. This scheme was flawed from the start, and staffed by incompetents, from top to bottom, but the people in charge and involved were and still are full to brimming of their own superiority, and ignored comments of lunacy from those around them. This issue at RHE is the tip of the iceberg of council leaders misguided, ill judged and arrogant decision making. And when a project flops, they’re always very sorry, and have been countless times, for countless bad choices, but nobody gets fired, they get promoted or side moved, but always more salary. I repeat, Panorama should look into this and other project failures, over the last 20 years, it would make a shocking revelation.

  26. ianprsy permalink
    September 8, 2020 8:49 pm

    A bit late, so I hope somebody’s still reading comments here. Could the failure be anything to do with the fuel price cap?

    • September 8, 2020 11:10 pm

      I think there is a reason, no.
      I think small suppliers are exempt from that rule.

      • ianprsy permalink
        September 9, 2020 8:51 am

        Thanks, Stew.

    • It doesn't add up... permalink
      September 9, 2020 3:24 pm

      It can’t have helped. However, they were in trouble last year with meeting their ROC payment obligations, so they seem to have messed up generally. There are different customer numbers at which obligations to pay more green subsidies increase, but I can’t get reliable data on their customer numbers. Worth a read is this:

      http://watt-logic.com/2019/08/17/retail-energy-regulation/

  27. It doesn't add up... permalink
    September 9, 2020 3:09 pm

    Robin Hood Energy has warned those customers with traditional Pay As You Go keys and card that they will need to use up any credit before they switch to a British Gas key as inserting a new key will clear the meter.

    In addition, they have warned customers with smart meters may find they need to have a new one fitted – and that there may be a charge for this from British Gas.

    All part of the fun of having a supplier who goes bust.

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