Corporate welfare

Sadly, Bulb’s business model didn’t work and it failed. Most similar companies were liquidated but the government chose to use taxpayers’ money to bail out Bulb.

Now that’s happened, Bulb’s senior management team are effectively civil servants and should be paid as such.

Paying Hayden Wood £250,000 plus benefits is an insult to all taxpayers, never mind those now being charged eye-watering amounts for energy, and about to be charged even more.

So much for being an energy company that is different from the rest. Bulb is like the rest of them. We can eat or freeze while the bosses get their snouts in the trough

Looking at the year end accounts for Simple Energy (the parent company of Bulb UK, Bulb Spain and Bulb USA), the four directors then shared a total of £229,000 (with the two highest paid directors receiving £113k: page numbered 37, page 40 in the PDF from “10 Mar 2021 Group of companies’ accounts made up to 31 March 2020” on Companies House)

This means either they had a doubling of their salary in the final year or the administrators (action on behalf of the government/OFGEM) approved this increase.

Looking at the “12 Jan 2022 Statement of administrator’s proposal” PDF on PDF page 24 “From the date of our appointment [3rd December] to 31st December 2021, we [the administrators] have incurred time costs of £1,003,791. These represent 1,319 hours at an average rate of £761 per hour”. Looking at page 30, the administrators think it’ll cost £28million to wind Bulb up and are charging Bulb/the government at a rate of £985/per hour for the administrator’s managing director (see PDF page 32) . (Makes Hayden Wood’s £250,000 per annum seem cheap!)

For the record, in 2020, Simple Energy had a turnover of £1,521million and went bust with £55m in debt (down from £63m of losses declared in 2020’s account and down from £129m in 2019). Bulb operated a 6month rolling hedging policy to protected against wholesale price changes, but with the prices rising and them not having access to enough credit to be able to “hedge” into 2022 (and with the fixed customer prices) Bulb concluded that they could not continue trading in November 2021.

Nothing surprising about this situation, its disgusting but of course the government is no better, so why would we expect anything different from a company taken over by them.

BBC News:

The co-founder of collapsed energy firm Bulb has defended continuing to be paid £250,000 a year, saying he is helping with a sale of the company."

Asked if it was “morally justifiable” that taxpayers continued to pay his salary after the company had gone bust, Mr Wood said: “I think everything we are doing right now is to try and complete a sale of the company so that we can minimise the cost to taxpayers and minimise the disruption to consumers.”

[Note: he didn’t answer the question! The correct answer is NO.]

At the time Bulb was placed in special administration, the Treasury set aside £1.7bn to purchase the gas required until the end of the tax year in April 2022 by which time it had been hoped a buyer would be found for the business.

But government officials have conceded that the prospect of offloading the business to a private buyer seems remote in the current environment and that means that taxpayers will foot the bill.

Ultimately, the problem is of BEIS/Ofgem’s making. Bulb and all the other ‘energy providers’ are just a very expensive sideshow. The rules encouraged them to take a short-term view. So, using greenwash and every other marketing trick to hand, they competed for customers while providing little more than a billing service – middle-men skimming profit from the real work of generation and distribution.

The regulatory failures are breathtaking. Two of the worst:

  1. Smart Export Guarantee – it’s entirely up to Bulb and others how much they pay us for excess solar PV. The only ‘guarantee’ being “…the tariff must be greater than zero pence per kilowatt hour exported at all times.”
  2. Environmental tax on sustainable wind/solar generated electricity 23%. Environmental tax on unsustainable gas 2%.

It’s no wonder we’re heading for catastrophic energy poverty across the nation this autumn.