A loss-making company set up by Enfield Council is paying bosses higher wages than the Prime Minister, the borough’s Conservative group has claimed.

Tory finance chief Cllr James Hockney said it was “incredible” that directors at energy firm Energetik were being paid up to £220,000 salaries when the company reported a £569,000 loss in its most recent annual accounts.

A letter to shareholders from the firm’s managing director blamed delays in the construction of the £6 billion Meridian Water regeneration scheme for the loss – which was described as “in line with the budget and business plan”.

The council says the company – set up to provide affordable, low-carbon energy to residents and businesses – has outperformed its business plan for successive years and needs up-front investment to make a long-term return.

But Cllr Hockney (Conservative, Bush Hill Park) called for a change of approach from the Labour administration after the Tories claimed their enquiries revealed one Energetik director was on a salary of £175,000 and another on £220,000.

“It is a quite incredible state of affairs at the council,” Cllr Hockney said. “Not only is the council pumping hundreds of millions of pounds into these companies, but we are seeing losses like this and salaries exceeding that of the Prime Minister. The whole point of setting up companies is they make a profit and support council services.

“Half a million pounds could, for instance, provide ten thousand local, low-income households with decade’s worth of low-energy lightbulbs.”

According to the letter to shareholders, Energetik’s losses mainly comprise interest payments made to the council of £505,000, as well as a further £51,000 paid to the council in service charges. A report states that the company made a profit on its day-to-day business operations, before interest payments on loans were taken into account.

Another company set up by the council, social care provider Independence and Wellbeing Enfield, was wound up earlier this year after struggling to compete with private-sector firms.

An Enfield Council spokesperson said: “Energetik was set up with a view towards long-term investment in Enfield, to provide quality service and energy to residents and assist in decarbonising the borough in line with the climate change agenda.

“It operates in a highly capital-intensive market which requires substantial up-front investment to achieve a long-term return. The business plan’s financial projections reflect this.

“Energetik has outperformed its business plan for successive years and exceeded these projections, recording gross profit on its operations. The company’s operations model is fundamentally profitable, and the projection of long-term profit is realistic and achievable.

“Energetik’s returned gross profit margin exceeds the most recent filed accounts of some of the larger private-sector energy companies operating for much longer than Energetik.

“The next steps are for capital investment in building its network and other infrastructure assets and increasing its customer base. Energetik has completed the Ponders End Heat Network extension from Alma to the Electric Quarter, and by the end of 2020-21 will have set up the construction site at the EcoPark for its Meridian Water heat network energy centre. Energetik is also in discussions with private developments across the borough.”