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Sector faces extra £7.3bn in energy costs


With tomorrow [1 April] marking the introduction of the Energy Bill Discount Scheme, which greatly reduces the support available to business, the hospitality sector is facing costs of £7.3bn in increased energy bills. Without meaningful action to rein in some profiteering energy suppliers, the sector will no doubt see thousands ofvenues go out of business.

A snap survey of UKHospitality’s members shows that almost half (41%) had been refused a quote by an energy supplier for the sole reason of operating within hospitality.

Energy costs show no sign of relenting, with costs now accounting for 11.4% of business turnover, up from 3.4% before the crisis.

UKHospitality Chief Executive Kate Nicholls said: “The energy crisis has suffocated businesses over the past year, causing thousands to fail and forcing many more totake drastic measures to afford extortionate energy bills.

“A £12bn increase in energy costs in a year is almost incomprehensible and, frankly, unsustainable for much longer. The transition to a continued, but significantly reduced, energy support scheme does not provide much comfort for anyone, especially with the £7.3bn price tag it comes with.

“It’s clear to everyone that a driver of these rocketing costs has been some suppliers that have seen this crisis as an opportunity to boost their bottom line, at the expense of hard-working hospitality venues.

“Ofgem itself has recognised this but has been unable to yet take decisive action. Its current plans to ‘consult on suggested actions’ in the summer is not at the speed the sector needs and it needs to move much, much quicker to rein in these suppliers.

“If Ofgem doesn’t feel it has the teeth to grip hold of this problem, the Government needs to step in immediately to sanction those energy suppliers or immediately give further powers to the regulator.”


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