James Alcock, Plunkett Foundation’s Chief Executive responds to the announced energy price support for businesses.
“After weeks of uncertainty and having received a growing number of calls from our members, expressing their concerns about the rising energy prices we were pleased to hear yesterday’s news, setting out a package of support for businesses and voluntary sector organisations.
Community-owned businesses are creating inclusive, innovative and impactful spaces the length and breadth of the UK. They provide access to vital services, offer employment, training and volunteering opportunities and need help right now to navigate this crisis. The 6 month Energy Bill Relief Scheme will allow for these businesses to prepare for the winter ahead, however we believe that longer term support is still needed.
Given the volatility of the markets and the ongoing situation in Ukraine, businesses will need longer term assistance to manage their energy bills and plan their operations. We recognise that a 2 year package of help, which has been afforded to households may not be seen as an affordable option but we would encourage Government to use the same timeframe as the basis for reviewing the ongoing needs for our sector.
We welcome the Government’s commitment to review the support scheme after 3 months, to identify vulnerable businesses or sectors needing ongoing help. We will be working with partners and other representative bodies to use this review to make the case for continued support for community-owned businesses beyond March 2023.”
An example from a community-owned shop about how the Energy Bill Relief Scheme will impact them:
- Current electricity price (fixed) is 14.3p per kWh which generates an annual bill of approx. £7k per annum
- Quoted electricity pirce from 1st November (end of fixed term) onwards was 43.5p per kWh, which would have led to a bill of nearer to £21k per annum
- Energy Bill Relief Scheme will cap the price at 21.1p per kWh, which would result in an annual bill of £10.5k
Even with the Energy Bill Relief Scheme this community shop faces a 50% increase on their energy bill. The business’s average annual operating profit is around £2.2k per annum, so an increase in energy costs of £3.5k will be a major challenge. If there is no further support beyond March 2023, the potential for even higher energy costs would be a genuine cause for concern.
Plunkett support:
Community-owned business are able to access free advice and support related to short-term cashflows, business planning and reviewing operations via our core advisory support service. Please visit the “How we help” page to find out about the support we can offer and please get in touch.
We are also hosting a Tackling the Energy Price Crisis webinar on 20 October 2022. The event is free for Plunkett members and £15 for non-members.
Please let us know your thoughts about the announced package of support:
We encourage our members and other community-owned businesses to continue sharing their experiences, and letting us know how the support will impact your business. Please send your views to data@plunkett.co.uk.
