Home Business News Small businesses brace: Energy bills discount scheme comes to an end

Small businesses brace: Energy bills discount scheme comes to an end

by LLB staff reporter
28th Mar 24 10:54 am

On March 31, the Energy Bills Discount Scheme comes to an end with no signs of a replacement.

The scheme was established to alleviate the stress of financial burden on businesses during the energy crisis. However, over a quarter of SMEs spent up to 40% more in energy each month than in the previous year, research by small business insurer Simply Business found.

The recent Spring Budget saw SMEs hoping for an extension to the scheme beyond March 2024, and for the government to invest in creating conditions for them to thrive. However, they were left without clarity and protection against non-domestic energy users. Without this support, many small businesses say they’ll struggle to survive.

Small business owners across the country will be bracing themselves for the uncertainty that lies ahead.

Micky Whiteman, Owner of RD1 Clothing said: “The energy relief scheme has been helpful since its launch in 2022 for my small business. Our electric bill has been manageable, but this is just one factor businesses are struggling with. The cost-of-living crisis is impacting consumer spending (they have higher energy bills too) and suppliers are increasing their prices. I think there will be less businesses looking to start up and some may not survive if the government cannot continue to support or bring it down further.

With the end of the energy bills discount scheme we are expecting our monthly bill to be higher but we need to explore this more with our energy supplier so we can plan for the year ahead. We still need to use the same amount of electricity to keep alarm systems and tills running, lights and to be able to use heating. We can’t compromise on that.

Our electric bill has been a lot more than what we planned even with the relief, it’s been 40%  more than when we opened in early 2022. This has contributed to a tricky few years of trading as a start-up. I could run 2 households electric for the month for our small shop even with the discount.

Due to the entire economic environment with the energy bill being a huge factor, we have had to make some sacrifices. For example, reduce staffing. We are trying our hardest to keep the cost of our products down, we’re not sure how long this will last as price increases are happening with our suppliers.

I know we are luckier than some of our small businesses, in our local town lots of small cafes and restaurants have had to cease trading or shut on certain days because the cost of gas and electricity is too high.  This impacts on the town’s footfall and morale.”

Daniele Paduano, owner of Kotch! Pizza Stratford, said: “Regarding the bills, I have been through a situation where an energy provider owed me £1800 after closing the account, and I did realise only when, after many months, I accessed my online account, and nobody (of course) took the trouble to get in touch with me to issue a refund. I had to chase it.

“To avoid being in credit with the energy company, especially during these difficult times when every penny counts to pay employees and support them and our families, I deactivate the direct debit and activate it when the credit runs out. That can quickly be done.

“The suggestion I can give to small business entrepreneurs like me, I know we are always busy with more important tasks, is to check their online account regularly and get a smart meter installed.

“Checking your account is a quick task, but their cash flow will thank them. It’s also vital to check every six months if the prices go down and negotiate it with the supplier. They’ll try all they can to keep a customer that’s paying good money every month. Again, every penny counts, and right now, bills are not pennies as they used to be pre-war.

“Bills have become an expense, like having an extra part-time team member.”

Bea Montoya, COO of Simply Business, said: “With the Energy Bills Discount Scheme coming to an end, the financial strain on small businesses is only set to increase. Our research found that almost half (46%) of SME owners with more than 10 employees shared that the energy crisis has impacted their supply chain, while 36 per cent have had to reduce their services or opening hours to combat the higher cost of doing business. And with reduced government support – set against the backdrop of a recession – we must do all we can to support small businesses owners..

“Unprecedented high energy prices are one of the biggest challenges facing small businesses, with over a quarter of SMEs spending 40% more on energy each month compared to the last year. Small businesses are calling for the government to extend the Energy Bills Discount Scheme – without this, quite frankly, many small businesses will struggle to survive.

“Small business owners are the backbone of the UK economy – their resilience is vital to the nation’s economic stability. Sitting at the heart of our communities, SMEs are vital to our economy, and we must continue to show support for them in these times of financial uncertainty.”

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