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The government is accelerating contingency plans for the collapse of Bulb, Britain’s seventh-biggest domestic energy supplier – a demise that would mark by far the biggest insolvency of the crisis engulfing the sector.

Sky News has learnt that ministers and officials, along with the industry regulator Ofgem, believe that Bulb – which has around 1.7 million household customers – could collapse as soon as next week, amid diminishing expectations of a rescue deal.

Industry sources said on Friday that talks with a small number of potential buyers were ongoing, but that others had pulled out in recent days.

A solvent rescue remains a possibility, they said, but added that it was highly unlikely that Bulb could survive through November without new funding.

Ovo Energy, Octopus Energy, and Shell Energy Retail are among the rival gas and electricity groups which have had access to Bulb’s financial data in recent weeks.

An executive at one of the companies which had explored a takeover of Bulb said it had liabilities of approximately £600m, making a solvent takeover of the company hard to envisage given the backdrop of wholesale price volatility.

A Bulb spokesperson said on Friday: “Our discussions with multiple parties to secure additional funding continue to make good progress and we’re encouraged by the drop in wholesale energy prices.

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“We expect the government to monitor wholesale prices and their effect on the whole industry, but ministers and Ofgem have been clear we must emerge from the energy crisis with a competitive and innovative market, rather than a return to the oligopoly of the past.”

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Lazard, the investment bank, has been engaged in the search for new funding, while AlixPartners, an advisory firm, has been working with Bulb on short-term measures to strengthen its balance sheet.

If Bulb does collapse, it would place at risk the jobs of roughly 1000 people who work for the company, which was launched in 2015 by Amit Gudka and Hayden Wood, and has accumulated a 6% share of the market.

It supplies 100% renewable electricity and 100% carbon-neutral gas, which would make its failure around the time of the crucial COP26 climate summit in Glasgow a more acute headache for the government.

Its demise would also render the shareholdings of executives and their venture capital backers largely worthless.

The latest developments in Bulb’s rescue efforts pave the way for the inaugural use of a resolution process called the Special Administration Regime (SAR), which would guarantee funding for Bulb from the Treasury while administrators seek a restructuring deal, buyer, or transfer of the customer base.

The demise of Bulb would come close to matching the size of the total customer bases of the 14 energy companies which have ceased trading since the beginning of August.

The largest of those, Avro Energy, had about 580,000 customers.

If the search for a buyer does prove unsuccessful, the Department for Business, Energy and Industrial Strategy, alongside Ofgem, would initially consider whether Bulb can be dealt with through the watchdog’s Supplier of Last Resort (SOLR) process.

Under that, a company’s operating licence is removed and bids are sought from other industry players for its customer base, with losses incurred by the acquirers of those customers are then recouped through an industry levy.

Bulb is, however, regarded by most observers as too large for any single supplier to take on through the SOLR system, meaning that invoking the SAR is now viewed as probable by industry executives.

Under the SAR, the administrator has a legal duty to consider the interest of customers, unlike a conventional insolvency process where the primary duty is to creditors.

Sky News revealed last month that Ofgem had lined up Teneo Restructuring, an advisory firm, to be on standby for the collapse of a large energy company.

In a statement on its website about SAR, Ofgem said a memorandum of understanding had been drawn up between itself, the Treasury, and BEIS, adding: “Provisions for this administration scheme for energy suppliers were included in the 2011 Energy Act.

“It has never been used before because a large energy supplier has never been insolvent.”

A government spokesman said on Friday: “Ofgem – as the expert regulator – is monitoring the situation across the energy market for the continued impacts on high worldwide wholesale gas prices.

“We have put in place the powers and robust processes to ensure customers do not experience any disruption to their energy supply and that costs are minimised if a supplier should exit the market.”

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Energy supplier crisis must never happen again – British Gas boss

The regulator added: “There has been an unprecedented increase in global gas prices which is putting financial pressure on suppliers.

“We know this is a worrying time for many people and our number one priority is protecting customers.

“In the event a supplier fails, Ofgem and government have robust processes in place to ensure customers’ electricity and gas supply continue and domestic customers’ credit balances are protected.”

Many of Bulb’s customers could face higher bills because wholesale prices have soared in recent months, although they have begun to fall again.

In total, around 2 million households have seen their supplier cease trading since the summer, sparking demands from some executives for a removal of the industry price cap or a bailout fund to help with the rescue of smaller suppliers.

Kwasi Kwarteng, the business secretary, has rejected both demands.

On Friday, Ofgem said it would consult on changes to the price cap because the ongoing industry crisis had “changed the perception of risk and uncertainty in this market”.

The collapse of one of the biggest challengers to the big players – the largest of which are Centrica’s British Gas, E.ON Next, EDF Energy, Scottish Power and Ovo Energy, which acquired SSE’s retail business – would be a blow to hopes of a more varied and competitive market.

Octopus Energy, which like Bulb supplies 100% renewable energy, has established itself as an independent, well-funded challenger and now boasts 2.5 million customers across more than 4 million accounts.

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The winners and losers in Rachel Reeves’s spending review

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The winners and losers in Rachel Reeves's spending review

“It’s a big deal for this government,” says Simon Case.

“It’s the clearest indication yet of what they plan to do between now and the general election, a translation of their manifesto.

“This is where you should expect the chancellor to say, on behalf of the government: ‘This is what we’re about’.”

As the former cabinet secretary, Mr Case was the man in charge of the civil service during the last spending review, in 2021.

On Wednesday, Rachel Reeves will unveil the Labour government’s priorities for the next three years. But it’s unclear whether it will provide all that much of an answer about what it’s really about.

Unlike the Autumn budget, when the chancellor announced her plans on where to tax and borrow to fund overall levels of spending, the spending review will set out exactly how that money is divided up between the different government departments.

Since the start of the process in December those departments have been bidding for their share of the cash – setting out their proposed budgets in a negotiation which looks set to continue right up to the wire.

This review is being conducted in an usual level of detail, with every single line of spending assessed, according to the chancellor, on whether it represents value for money and meets the government’s priorities. Budget proposals have been scrutinised by so called “challenge panels” of independent experts.

It’s clear that health and defence will be winners in this process given pre-existing commitments to prioritise the NHS – with a boost of up to £30bn expected – and to increase defence spending.

On Sunday morning, the government press release trumpeted an impressive-sounding “£86bn boost” to research and development (R&D), with the Science and Technology Secretary Peter Kyle sent out on the morning media round to celebrate as record levels of investment.

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What will be in spending review?

We’re told this increased spending on the life sciences, advanced manufacturing and defence will lead to jobs and growth across the country, with every £1 in investment set to lead to a £7 economic return.

But the headline figure is misleading. It’s not £86bn in new funding. That £86bn has been calculated by adding together all R&D investment across government for the next three years, which will reach an annual figure of £22.5bn by 2029-30. The figure for this year was already set to be £20.4bn; so while it’s a definite uplift, much of that money was already allocated.

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Peter Kyle also highlighted plans for “the most we’ve ever spent per pupil in our school system”.

I understand the schools budget is to be boosted by £4.5bn. Again, this is clearly an uplift – but over a three-year period, that equates to just £1.5bn a year (compared with an existing budget of £63.7bn). It also has to cover the cost of extending free school meals, and the promised uplift in teachers’ pay.

In any process of prioritisation there are losers as well as winners.

We already know about planned cuts to the Department of Work and Pensions – but other unprotected departments like the Home Office and the Department of Communities and Local Government are braced for a real spending squeeze.

We’ve heard dire warnings about austerity 2.0, and the impact that would have on the government’s crime and policing priorities, its promises around housing and immigration, and on the budgets for cash-strapped local councils.

The chancellor wants to make it clear to the markets she’s sticking to her fiscal rules on balancing the books for day-to-day spending.

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But the decision to loosen the rules around borrowing to fund capital investment have given her greater room to manoeuvre in funding long-term infrastructure projects.

That’s why we’ve seen her travelling around the country this week to promote the £15.6bn she’s spending on regional transport projects.

The Treasury team clearly wants to focus on promoting the generosity of these kind of investments, and we’ll hear more in the coming days.

But there’s a real risk the story of this spending review will be about the departments which have lost out – and the promises which could slip as a result.

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Water cremation and human composting could be offered instead of traditional funerals

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Water cremation and human composting could be offered instead of traditional funerals

Water cremation and human composting could soon be offered as an alternative to traditional funerals.

A Law Commission consultation is proposing legal approval of new methods beyond burial, cremation, and the rarely used burial at sea.

The paper published earlier this week highlights two methods used in other countries – alkaline hydrolysis and human composting.

Alkaline hydrolysis – also known as water cremation or resomation – involves placing a person’s body into woollen shroud or other organic pouch, using water, alkaline chemicals, heat and pressure to break down the tissue.

Bones leftover from water cremations can be powered to be scattered like ashes. Pic: Kindly Earth
Image:
Bones left from water cremations can be ground to be scattered like ashes. Pic: Kindly Earth

The resulting liquid is checked and treated if necessary to enter the wastewater system, while remaining pieces of bone and teeth are dried and can be ground to a powder and scattered like ashes.

Water cremation, which mimics the process of natural decomposition when someone is buried, takes between four and 14 hours.

The method, which has been suggested as a greener alternative to traditional cremation, was used for the bodies of five dead people in 2019, as part of a study facilitated by Middlesex and Sheffield universities.

Anti-apartheid campaigner Archbishop Desmond Tutu, who died in 2021, chose resomation for his own funeral in South Africa.

Read more: What is water cremation?

Co-op Funeralcare said it hoped to offer the service in the UK in 2023 but backed out because of the current regulations.

The firm welcomed the Law Commission review, which will run until spring next year, ending in a final report and draft Bill.

New funerary methods are not currently regulated, other than by more general legislation such as environmental and planning laws.

Provisional proposals suggest a legal framework to enable new methods to be regulated in the future.

A Co-op Funeralcare spokesperson said: “At Co-op Funeralcare, we are committed to serving the needs of our member-owners and clients and offering the most sustainable and affordable services.

“In 2023, we announced our ambition to pilot resomation in the UK, and we subsequently worked closely with government to explore the regulatory requirements to introduce this service across the nation.

“However, we did not proceed with this as, at the time, we were unable to find a path through the current regulatory framework.

“We welcome the Law Commission’s review and encourage exploration into alternative methods that provide consumers with greater choice and deliver environmental benefits.”

The consultation paper also highlights human composting, where a body is placed into a sealed chamber, or vessel, with carbon-rich organic matter, such as straw and wood chips, to enable quicker decomposition.

The process takes around two to three months and resulting soil can be returned to bereaved loved ones.

Other methods involving the freezing of human remains have also been suggested, although none have them are yet viable, according to the paper.

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Two men charged with murder after teenager hit by car in Sheffield

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Two men charged with murder after teenager hit by car in Sheffield

Two men have been charged with murder after the death of a teenager in Sheffield.

Abdullah Yaser Abdullah al Yazidi, 16, died after being hit by a car.

He had only recently come to the UK from Yemen, looking “for a better future”, his loved ones previously said.

Zulkernain Ahmed, 20, and Amaan Ahmed, 26, both of Locke Drive, Sheffield, have been charged with murder and three counts of attempted murder.

They are due to appear before Sheffield Magistrates’ Court on Monday.

Flowers at the scene of the crash in Darnall.
Pic: PA
Image:
Flowers at the scene of the crash in Darnall.
Pic: PA

‘Innocently walking down the street’

South Yorkshire Police said Abdullah was “innocently walking” down a street in the Darnall area of the city, just after 4.50pm on 4 June, when a car collided with him.

The force said they understood a grey Audi had driven towards three electric bikes, hitting one.

As the car continued following the collision with the electric bike, it then hit Abdullah, police said.

According to the force, the driver failed to stop at the scene.

Abdullah was taken to hospital where he later died.

The rider of the electric bike, 18, suffered serious but non-life-threatening injuries and remains in hospital.

Two people, a man, 46, and a woman, 45, who were previously arrested on suspicion of assisting an offender, remain on bail.

Police at the scene of the collision in the Darnall area of Sheffield.
Pic: PA
Image:
Police at the scene of the collision in the Darnall area of Sheffield.
Pic: PA

A ‘kind boy’

Abdullah’s relative, Saleh Alsirkal, runs a corner shop that the teenager popped into just before he was hit by the car on Wednesday.

“His dad brought him over to change his life, to get a better future for his son, but this has happened and destroyed everything,” said Mr Alsirkal.

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Water cremation could be offered instead of traditional funerals
Body found in search for missing woman

He said Abdullah was a “kind boy” who just wanted to look after his family, including his three sisters and was really enjoying learning English.

“Every time he had a new word to learn, he was so excited about it,” he said.

“It meant a lot to him and he learned quick. Sometimes he would stay in the shop just so he could talk to people. He tried to be friends with everyone.”

“He wanted to be the main guy for the family. He was 16 years old, but he was a clever man,” said Mr Alsirkal.

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