'Tell Sid to sod off': Barking and Dagenham Council launches its own energy company
PUBLISHED: 07:00 28 January 2019
"Tell Sid to sod off."
That’s the message from Barking and Dagenham Council leader Darren Rodwell speaking after the local authority launched Beam Energy its own gas and electricity supplier.
The move is motivated by the need to help families struggling to meet the cost of heating their homes.
Cllr Rodwell recalled the famous slogan of a TV ad used as part of a national campaign to sell shares in British Gas claiming the privatisation in 1986 had backfired.
“We have serious fuel deprivation in the borough,” Cllr Rodwell said. “The poorest in our society have been victimised the most.”
Ten per cent of households in the borough live in fuel poverty, according to council figures, ranking Barking and Dagenham eighteenth in a survey of London’s 32 local authorities.
The council says its company can offer cheaper gas and electricity even if wholesale energy prices rise because unlike the ‘Big Six’ it doesn’t have to pay shareholders or bonuses.
It calculated that customers could make an average £91 saving with Beam Energy.
The new firm piggybacks onto an existing company, Robin Hood Energy, set up by Nottingham City Council in 2015 to take on the ‘Big Six’ energy companies.
The borough joins Liverpool and Leeds in a consortium of councils.
Asked if the council was taking on energy giants British Gas, Npower, E.On, SSE, EDF Energy and Scottish Power – which according to Ofgem have a 77 per cent share of the market – Cllr Rodwell said: “Nothing is impossible.
“When I was a lad [the government] owned the utilities. The money utilities made went back to the people.
“We’re doing this at a local level.
“The money will go back to services which have seen their funding slashed.
“We’re using our ability to work with other councils to get the best market position to support residents who are vulnerable or otherwise.”
And the leader was Beam Energy’s first customer making a saving of £19.
“I did it because a small percentage of what I pay will come back to the council to help somebody else,” he said.
The council is talking to developers working in the borough about making Beam Energy the main supplier in new builds and looking at using it at electric vehicle charging points.
The plan is to get 1,500 customers by January 2020, with 3,000 meters connected to Beam’s gas and electricity supply.
The move fulfils a promise made by Barking and Dagenham’s Labour Party at the local elections last year and mirrors the national party’s 2017 manifesto pledge to invest in publicly owned energy firms.
But are there any risks?
“The risk to us is negligible while the opportunity is considerable,” Cllr Rodwell said adding that the only danger would be if people didn’t sign up.
“If that happened we would just cancel the contract,” he said.
And the cost of starting up the company – estimated to be less than £100,000 – was “negligible” when compared to what the firm could do to help households, according to Barking and Dagenham’s leader.
Matthew Vickers chief ombudsman at Ombudsman Services – which handles complaints between consumers and companies – said the success of public energy firms depended on trust.
“Questions of trust, governance, legitimacy and transparency are key. When people choose a council-run energy company, they expect to be charged fairly and treated well.
“That includes getting complaints resolved quickly.
“Failure to treat customers properly could damage trust and perceptions of a council – not to mention an energy company.”
He explained that the demise of Portsmouth City Council’s Victory Energy firm – wound up after a change of administration – led sceptics to conclude the movement was on borrowed time.
But the fact Robin Hood Energy made money for the first time in June and the private French firm, Engie, had partnered with Cheshire West and Chester Council showed progress.
He added: “Still, energy is a risky business for local authorities. The gas and electricity retail market is already crowded and going through unprecedented upheaval.
“Even the most established suppliers are struggling to keep pace with change.
“But there are reasons to believe that public energy is more than a passing trend.”
Visit beamenergy.co.uk for more information.