THOUSANDS of families could bit adversely affected after signing up to a council-backed energy scheme.

Southend Council joined up with OVO energy to form Southend Energy.

The idea was to save households cash by negotiating an energy deal together and help those for whom switching suppliers was daunting.

However the partnership is due to collapse with OVO Energy deciding not to renew the contract and the council left with abandoning the scheme or signing a contract with Robin Hood Energy and relying on Nottingham City Council’s deal.

A spokesman for Southend Council said is “too early” to know whether this will lead to higher prices.

The spokesman said: “Few suppliers are working to take on new ‘white label’ contracts such as this especially after several suppliers have ceased trading in the last six to 12 months.”

“Research amongst energy suppliers and other councils that have sought to set up similar operations have revealed no suppliers in a position to replace OVO other than Robin Hood Energy.”

Southend Energy was formed in 2015 and OVO Energy agreed to manage the operation of the company for five years. Since then, the council has encouraged 6,504 households to switch supplier, with the majority being over the age of 65.

Negotiations to renew the contract between OVO and the council broke down in 2018 and the company has now asked the council to end the contract before the end date of May 2020.

The council chose not to comment on the reasons why OVO walked away from the negotiations and the report simply states that “whilst OVO were initially in favour, events in summer and autumn 2018 have meant that this is not possible”.

Councillor Mark Flewitt, cabinet member for public protection, said: “The scheme has demonstrated lots of benefits for local people and whilst we thank OVO for helping us set it up, we are pleased at the prospect of starting a new chapter with Robin Hood Energy.

“We hope to be able to build on this success in the coming years by utilising the experience Robin Hood Energy has in running local authority energy schemes.”

Southend’s cabinet will discuss whether to approve a new five-year contract with RHE next week.