Source · Select Committees · Public Accounts Committee
Recommendation 10
10
Acknowledged
Estimated total taxpayer funding for Bulb sale reaches £3.02 billion; final cost unknown.
Conclusion
The total cost of the taxpayer funding committed to the sale and supporting Bulb was made up of a number of areas of spend. These included: £0.16 billion to offset Bulb’s remaining liabilities; a one-off loan of £1.06 billion to assist with building the collateral needed to provide the letter of credit required by Shell for the provision of wholesale energy for Bulb’s customers; and £0.71 billion for the wholesale energy required by Bulb between 21 December 2022 to 31 March 2023. The final cost of operating the SAR to 2025 10 C&AG’s Report, para 16, 17 11 Qq 44, 46 12 Q 3 13 Q 39; C&AG’s Report, para 3.15 14 Qq 33, 35, 36–38 12 Bulb Energy as of January 2023 was estimated to be £1.09 billion – bringing the estimated total cost of taxpayer funding to £3.02 billion. However, the actual cost of the SAR will only be known once the SAR ends, with Octopus repaying the temporary taxpayer funding it owes. The funding provided to Octopus attracts an interest charge to ensure compliance with HM Treasury guidance and subsidy control rules.15
Government Response Summary
The government agrees with the conclusion, confirming that the actual cost of the SAR will be known only after its conclusion, expected in autumn 2025 or 2026. It commits to informing the Committee of final confirmed amounts and providing a written update on estimated outturns and timelines by December 2025.
Government Response
Acknowledged
HM Government
Acknowledged
3.5 The government agrees with the Committee's recommendation. Target implementation date: December 2025 3.6 Bulb will remain in SAR until such time as the administrators have fully discharged their statutory duties, have submitted their final progress report and a court application to end the SAR, with Secretary of State’ consent, has been made and duly ordered by the court. 3.7 Full repayment is not expected until September 2024 (or 2025 if Octopus exercise their right to defer if certain market conditions are met). Following this, a further 12-month wind-down period is expected for the administrators to close any remaining matters. As such the conclusion of the SAR will not occur until sometime in autumn of 2025 or autumn of 2026 at which point, we will have details of the final costs to the taxpayer and how much has been repaid. 3.8 The recovery of any shortfall is dependent on final amounts calculated by the administrators which is still progressing. The department will inform the Committee once it has the final confirmed amounts and expects to provide a written update as to estimated outturns and timelines by end of December 2025. However, in the meantime it will keep the Committee updated of estimated outturns over the remaining SAR period.