Inquiry demanded into cash-backed energy company's collapse

An inquiry must take place into why an energy company backed with Scottish Government cash went bust, Liberal Democrat leader Willie Rennie has said.

He claimed that without such a probe, the publicly-owned not-for-profit energy company First Minister Nicola Sturgeon has pledged to create could repeat the mistakes of Our Power.

Edinburgh-based Our Power Energy Supply Limited went into administration last year, with Mr Rennie saying an insider had described it as being a “chaotic company, utterly ill-equipped to tackle the task of delivering power to those most in need”.

Documents from KPMG show the Scottish Government was its largest financial backer, having provided the firm with £9.8m of loans.

But according to Mr Rennie, the insider reported “huge numbers of customers simply went unbilled”.

The energy company had 75 staff and about 31,000 customers when it went into administration.

But the insider, who provided a statement to Mr Rennie, claims the Scottish Government “could and should have spotted the signs earlier” that the firm was in difficulty.

They also claimed the failure to develop a working billing system meant more than half of all customers went unbilled.

Ms Sturgeon unveiled plans for a publicly-owned power company in her speech to the SNP conference in October 2017, saying then that the new venture would sell energy to customers at “as close to cost price as possible”. She said it would be up and running by 2021.

But Mr Rennie said lessons must first be learned from the situation at Our Power.

“The clock is ticking to prevent a repeat of the Our Power outage,” he said.

“That is why I believe it would be sensible to immediately launch an inquiry into Our Power’s demise.

“Without an inquiry, the SNP Government risks spending serious money setting up its new energy company, not knowing whether the approach it is investing in is the right one. It needs to function properly, and to do that it needs to learn the lessons now.”

Mr Rennie claimed Our Power had “lost money from day one and racked up huge losses, backed by almost £10m of investment from SNP ministers”.

He added: “The comments from this whistleblower reveal a chaotic company, utterly ill-equipped to tackle the task of delivering power to those most in need. Even worse, poor financial management meant that huge numbers of customers simply went unbilled.

“Ministers are still insisting that Our Power provided low-cost energy, but now it turns out that for many that actually meant free.

“The Scottish Government plans to launch its own energy company with an identical ethos in a matter of months. As of now there is no evidence that they have learned any lessons from the collapse of Our Power.”

A Scottish Government spokesman said: “Lessons learned from the closure of Our Power and the other energy companies across the UK that failed last winter have been considered by independent consultants in developing the outline business case for a public energy company for Scotland.

“We are engaging in constructive dialogue with our potential local government partners on further refining and developing the case and will say more on this in due course.

“Our Power was an independent company and its board was responsible for management of the business. Since 2019, Ofgem has required additional financial tests for new and existing energy companies.

“Our Power provided low-cost energy to tens of thousands of low-income households and showed there are opportunities to deliver a better service, as well as challenges to achieve commercial sustainability.

“Alongside other lenders, the Scottish Government provided loans worth £9.8m following due diligence.”