With the current scheme coming to a halt at the end of March, businesses are concerned about how energy bills will hit their pocket beyond this winter
The cost of living crisis continues to take its toll on households and businesses alike, with energy prices rising dramatically over the past year. To counter this, the government has stepped in to provide short-term respite for those organisations that may otherwise have succumbed to escalating energy costs.
But, with this support scheme coming to a close, what should organisations do next?
A new scheme is being introduced to take the current scheme’s place
A new scheme is set to be introduced shortly that will discount the wholesale prices rather than capping individual costs. But firms will only benefit from this scheme when bills are high.
The new energy support scheme will run until the end of March 2024, with energy intensive sectors like ceramics, steelmakers and glass set to benefit the most. Some have welcomed the news, while others warn it falls short of helping businesses deal with soaring costs.
The new scheme is set to cost the government £5.5 billion in energy subsidies over the next financial year. By comparison, the current energy support scheme has cost the government an estimated £18.4 billion in just six months. The Chancellor Jeremy Hunt has said quite simply that this is “unsustainably expensive” to continue long term.
The government claims they are offering “as much support as we are able”
“My top priority is tackling the rising cost of living – something that both families and businesses are struggling with,” said Hunt.
Hunt continued: “This means taking difficult decisions to bring down inflation while giving as much support to families and businesses as we are able.”
Under the new scheme, bills will automatically be discounted by up to £6.97 per megawatt hour for gas bills and up to £19.61 per megawatt hour for electricity bills.
However, business owners are expressing their concern about the news. Speaking to the BBC, chief executive of Black Sheep Brewery Charlene Lyons said even though her business qualifies as a more energy-intensive firm, the support still won’t provide the help they need.
Lyons commented: “Energy prices will still absolutely soar for us and for everybody else as well. You’re talking about the best part of a £200,000 increase per annum and that’s not sustainable for many businesses.”
Likewise, the Federation of Small Businesses described the announcement as a “huge disappointment.” Meanwhile, UK Steel, who represent many businesses who will benefit most from the scheme, welcomed the announcement, but also warned that the government seemed to be betting on a stable 2023 energy market “in a climate of unstable global markets.”
If you’re concerned about your bills rising, get in touch
With government support changing over the coming months, now is the time for businesses to seek out support elsewhere. Investing in the help of experts when it comes to energy management can help you cut your costs in the coming months and take back control of your energy spending.
Consultiv Utilities are here to ensure that you are handling your energy in the most sustainable and efficient way possible, finding the most competitive deal for your business. We work with you to get to know your organisation and find the energy management solutions that will give you longer-term security and help to maximise profitability.