Costs for the special administrators of Bulb, their legal advisers and the investment bank Lazard totalled £49.9 million at the end of January, the Public Accounts Committee was told on 25 May 2023, and are expected to rise to around £60 million1.
Bulb collapsed in the summer of 2021 and was placed into a special administration regime, the first use of that vehicle, with Teneo appointed by the High Court as special administrator1. In June 2022 the National Audit Office reported that £0.9 billion had been spent by Government on running Bulb through the special administration regime in 2021-20221. In October 2022 Octopus Energy was identified as the acquirer of Bulb's customers, business assets and liabilities, including customer credit balances, after a delayed sale1. The transaction completed on 20 December1.
Giving evidence to the committee, Matt Cowlishaw, special administrator at Teneo, said:
"the costs at the time of the NAO Report for the special administrators, for the special administrators' legal advisers and for Lazard totalled £49.9 million at the end of January"
The committee also heard from Jonathan Brearley, chief executive of Ofgem, on the energy price cap, which he put at £2,074 for an average annual bill1. He said the cost to an average household was about £3,300, with the price guarantee fixing bills at £2,500, and that the fall to £2,074 represented a drop of roughly £1,200 per year1. He added that bills remain around £800 higher than the £1,100 to £1,200 seen before the gas crisis1.
On supplier resilience, Brearley said Ofgem now runs regular stress tests of every retail company in the market and has brought in a director from the Bank of England to lead a transition on financial resilience1. He said the sector is in a much more resilient position than in mid-2021, though not a perfect one, and that some companies still need to improve1.
Why it matters for households
Bulb's failure and the cost of winding it up sit alongside the wider question of what happens to a household when its supplier stops trading. Customers were transferred to Octopus Energy, including their credit balances, so household supply continued through the sale rather than through a supplier of last resort process1. The £49.9 million in administration, legal and Lazard costs is separate from the £0.9 billion of government spending on running Bulb in 2021-2022 reported by the National Audit Office1.
For a household, the practical effect of a supplier collapse is continuity of supply and the treatment of any credit balance, which the Octopus transaction covered1. The wider context is the price cap: at £2,074 for an average annual bill, households are paying substantially more than before the gas crisis, and Brearley said many will struggle to pay1. Ofgem's move to stress testing and capital expectations is intended to reduce the number of failures and the disruption and cost that follow1. The committee's questioning also covered how the sale was handled and what lessons there are for the future; no conclusions from that session have been reported1.
What happens next
Brearley said the energy price guarantee remains as a backstop if prices spike upwards again, until the end of March 2024, and that the energy bills discount scheme is now in place this year1. He said the repayment, looking at the markets to date, should be made by September 20241. The committee's report on Bulb has not been published1.
Sources1 cited
- [](https://committees.parliament.uk/oralevidence/13238/html/), committees.parliament.uk