Opposition Conservatives are warning the plans to open a Birmingham City Council energy company are unlikely to save either residents or the taxpayer money.
The Labour run council is currently drawing up plans to launch a company and offer cut price gas and electric to citizens as well as cut its own hefty energy bills.
It also wants to promote clean and green energy initiatives.
But Conservatives fear the project will be an expensive failure highlighting problems encountered with council owned energy companies in Bristol and Nottingham .
As Government funding is cut, Birmingham City Council’s Labour leadership is looking for schemes to raise money as well as benefit the city.
But Tory shadow cabinet member Meirion Jenkins said that the council has been financially inept in recent years - failing to deliver services on budget - and he has little confidence in them making the energy company work.
“The City Council should concentrate on its core activities and not expand into areas where it has no expertise and where there is already adequate private sector provision. Moreover, I note that external auditors have expressed severe doubts about a similar enterprise being undertaken by Bristol City Council,” he warned.
Bristol City Council set up it’s energy company in 2016 and is already experiencing ‘greater than expected losses’ according to an auditor’s report.
Cllr Jenkins added: “It is clear from the experience in Bristol that the move to create an energy company would present a very real risk to the revenue budget in Birmingham which may impact on core services.
“Birmingham residents would receive no real benefit over what they could achieve through active switching in the energy market but may lose out from reduced services and perhaps an increase in council tax to subsidise this Labour vanity project.”
The city council is drawing up a business plan for an energy company through which it hopes to compete with big name suppliers for customers. It also wants to back green and renewable energy schemes to help reduce bills and carbon emissions for residents. The council also hopes to slash its own £25 million a year fuel bill.
Speaking in June , Labour cabinet member for the environment, said: “After some 30 years of privatisation and 17 years of full retail competition, the energy market has failed.
“It has failed the most vulnerable in our society, it has failed the environment and it has failed to bring forward clean energy.”
