Independent report into council’s electricity contract

An independent report into how Liverpool City Council handled the renewal of its electricity contract has been made public.

The report from the international accountancy firm Mazars, published on 28th July 2022, was requested by the Mayor of Liverpool and the government-appointed Commissioners to understand why the council was unable to secure a fixed tariff in March 2022.

Background to the report

A Cabinet report seeking approval to renew the city’s energy contract had initially been drafted in the Autumn, but a final version was not shown to the city’s Mayor and Cabinet until after the supplier, Scottish Power, had withdrawn its trading desk from the market.

Summary of the report's conclusions

The Mazars report has concluded that this delay was due to a combination of factors relating to the volatile nature of the energy market, which was exacerbated by Russia’s invasion of Ukraine and the subsequent abrupt withdrawal by Scottish Power.

The report identified issues with the council’s risk management process and lines of reporting, both of which the council has already begun to review as part of its improvement journey.

Critically, the Mazars report found no evidence of malpractice, cover-up, or ‘playing the market’ by any council employee.

The report also found no evidence that the Mayor, or Deputy Mayor, had any prior knowledge of the situation that Scottish Power had withdrawn from the commercial market.

The auditors concluded that there was no indication that the Nolan Principles of Public Life had been breached.

The council has since approved a new energy contract with Crown Commercial Services, which will run until March 2025.

What happens next?

This final cost to the council, the Merseyside Fire and Rescue Service and the city’s schools of being on a variable tariff between 1st April and 30th June 2022 is expected to be reported to the council in August 2022.