Bulb went bust amid surging wholesale gas prices in November last year and was placed into “special administration”. The energy company is being run by the Government through regulator Ofgem until a buyer is found, giving it access to government funds to keep it supplying gas and electricity to its 1.7 million household customers.
Once the seventh-biggest energy supplier in the UK, Bulb’s collapse left the taxpayer with a potential bill of up to £3billion, making it the biggest state bailout since the collapse of the Royal Bank of Scotland in 2008.
Speaking at a hearing before MPs on Tuesday, the chief executive and co-founder Hayden Wood said he was “very sorry” for the “way things turned out at Bulb”.
Mr Wood told MPs the company realised it “couldn’t afford” losses that would have been incurred in supplying energy to customers after the rise in global energy prices.
He said the company had been in discussions to raise funds and eventually sell the company but talks fell through.
He said: “We had no reasonable prospect of being able to fund those losses for customers and that is when we made the difficult choice to enter special administration.”
He added: “I am very sorry for the way things turned out with Bulb.
“I think I and we at Bulb…should take responsibility for how the business failed.”
Mr Wood told MPs he was asked to stay on to “support customers” and help with the sale of the company.
When asked if it was “morally justifiable” that taxpayers continued to pay his salary after the company bucked, he 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.”
Addressing the Business, Energy and Industrial Strategy Committee, Mr Wood confirmed that his salary “now in the last year is £250,000 a year” – the same salary he was receiving before the company’s collapse.
He added that the administrators for “both Bulb and Simple [Bulb’s parent company] asked me to stay on to help. The reason I stayed on was because we wanted to support customers [and] have a smooth transition into special administration.
“The things we are doing within the company is to try and minimise costs for consumers, minimise costs for taxpayers, and hopefully effect a sale of the company out of special administration to again reduce costs for government.”
Mr Wood’s defence of his salary at the cost of taxpayers has sparked outrage as the energy sector continues to buckle under the weight of soaring gas prices and Britons face sky-high household bills.
READ MORE: Taxpayers on the hook for £3 billion over collapsed energy firm bulb
Environmentalist and founder of green energy company Ecotricity Dale Vince tweeted: “Outrageous – rewarding epic failure, and FFS his failure at Bulb will cost the public some £3bn.
“Does he actually have a role to play there, given he’s the guy that steered them onto the rocks…..?”
The Labour MP Andy McDonald, a member of the business select committee present at the hearing, said it was “staggering” that Mr Wood was continuing to get paid “the same salary that you were pre-collapse”.
Charlotte Nichols, a Labour MP and committee member, quoted the former chief executive of Ofgem, Dermot Nolan, who said “for Bulb to blame anybody but themselves for its collapse is not reasonable”.
Mr Wood agreed that Bulb “should take responsibility for how the business failed”.
He added: “Lessons will need to be learned and I hope that is what we can do.”
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He told MPs that he had put “all his personal savings since 2015” into the company, which he founded in that same year, and had never received a bonus from Bulb.
He said he had since lost all his shareholdings in the firm.
When Bulb was placed into special administration, the Treasury set aside £1.7billion to purchase the gas required until the end of the tax year in April 2022. It had been hoped that a buyer would be found for the business by that time.
A Department for Business, Energy & Industrial Strategy spokesperson said: “Bulb’s administrators have agreed to keep Mr Wood temporarily in place to ensure a smooth handover and sales process.
“Mr Wood is paid for this work under his employment contract with Simple Energy, the parent company of Bulb, in a separate administration process over which the government has no influence.
“The special administrator of Bulb remains legally obligated to keep costs of the administration process as low as possible. The government will seek to recoup costs at a later date, ensuring that we get maximum value for money for taxpayers.”