Colchester taxpayers have been hit with a £375,000 bill after a Lib Dem council-owned company’s latest accounts revealed it had made significant losses.
Colchester Council-owned Colchester Amphora Energy Limited (CAEL) incurred the six-figure shortfall across 2023-24 – prompting fury and demands for an investigation.
Critics have branded the situation a “fiasco” and are calling for urgent scrutiny of the company’s financial management.
CAEL was established to construct and operate a ground-source heat distribution network for a development on the city’s Mill Road, which would serve new housing and a health centre.
Calls for an urgent investigation into the six-figure bill have been laid at Colchester Town Hall’s front door
The company invested around £1million in preliminary works for an energy plant at the Mill Road site.
But the project came to a halt after two large holes were dug at the site – which remain unfilled – when the scheme was deemed unviable and subsequently mothballed.
Conservative councillor Thomas Rowe said: “It beggars belief that Colchester City Council tax payers have been saddled with a £375,000 corporation tax bill, which is an HMRC tax levied only on profits, for a loss-making company that is owned by the council.
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‘There needs to be an urgent investigation into this fiasco,’ councillor Thomas Rowe said
THOMAS ROWE
“There needs to be an urgent investigation into this fiasco, and all necessary steps taken at pace to stem the flow of cash that seems to run through the Lib Dem administration’s fingers at an alarming rate.
“Residents who are enduring cut after cut to services can depend upon the Conservative group to ask the right questions about who took these crass decisions, and to finally get to the bottom of this waste of public funds.”
A Colchester Council spokesman said the decision to write off a loan to CAEL was based on independent external advice and formed part of their strategy to hibernate the company.
The move resulted in a surplus for CAEL – but triggered an income tax charge of £375,451.
The council said the decision would enable “a clearer financial position for the group and supporting its long-term strategic goals.”
It also claimed it was committed to “prudent financial management” and maintaining transparency in financial decisions.
