Scottish Liberal Democrat Willie Rennie has today said that the clock is ticking to prevent the Scottish Government’s not-for-profit energy company from repeating the mistakes of the past as a whistleblower revealed that a previous Scottish Government-backed venture failed to bill its customers and was “doomed to fail”.
Our Power, a social enterprise, commenced trading in 2016 to make energy fairer and reduce levels of fuel poverty. A KPMG Insolvency Report shows that the Scottish Government was the largest backer, providing £9.8 million in loans. It had 31,000 customers and around 75 staff when it went bust a year ago.
In a lengthy statement provided to Mr Rennie, the Our Power insider revealed:
- “The Scottish Government could and should have spotted the signs earlier and saved the taxpayer a lot of money”.
- The failure to develop a working billing system led to over 50% of customers going unbilled.
- “Our Power did not employ enough people with energy industry experience at the outset. This led to playing catch-up just to do the basics and ultimately overpaying contractors”.
- Going on price comparison websites caused it to gain customers at a rate at which staff couldn’t process registrations or answer customer queries, with people then leaving having received free energy and no bill.
- A green energy tariff, projected to attract 10,000 customers, attracted fewer than 50 people.
- An independent report from EY raised grave concerns a year before Our Power eventually collapsed.
SNP ministers have previously stated that “the full picture will be available at the conclusion of the administration process” and that officials would “provide a review of the investment at that point”. However, the administration process was recently extended by 12 months to the end of January 2021 – just weeks before the government’s own new not-for-profit energy company is due to start serving customers.
Willie Rennie commented:
“Our Power lost money from day one and racked up huge losses, backed by almost £10 million of investment from SNP ministers.
“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. Their investment went sour but ministers seem determined to take the path of least resistance and tell critics to buzz off.
“The clock is ticking to prevent a repeat of the Our Power outage. 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.”