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Energy suppliers to roll out support for struggling firms

With government-funded energy bill support essentially over for thousands of businesses, many now find themselves locked into expensive fixed contracts and energy firms are under pressure to act.

According to the Federation of Small Businesses (FSB), more than one in ten small businesses fixed energy contracts when market rates were at their peak last summer. Doing so maximised the support available from the government’s Energy Bill Relief Scheme, which ran from October to March.

Wholesale energy prices have now fallen significantly since the 2022 peak but, with energy relief now effectively ended for most businesses, tens of thousands are now back with the high prices they fixed with last year. For many, energy bills are now three or four times higher than what they had been paying when government support was in place.

The FSB estimates that around 93,000 small firms – including manufacturers – are at risk of closure, downsizing or radical restructure as a result, and has been urging energy suppliers to allow businesses to renegotiate their contracts.

Commenting in May, FSB Policy Chair Tina McKenzie, said:

“Tens of thousands are still very much in survival mode because they are tied-in to sky-high energy contracts. Many small businesses agreed to lock in energy contracts last year to ensure they qualified for the maximum level of Government support. Now, with that support largely disappearing, they are once again faced with massive energy bill hikes as rates go back to pre-Energy Bill Relief Scheme level.

“The least energy suppliers should do is to allow small businesses who signed up to fixed tariffs last year to ‘blend and extend’ their energy contracts, so that their bills are closer to current market rates.”

Some suppliers are now offering support. EDF said it had identified more than 15,000 SMEs that it will contact to offer new contracts at lower prices that cover a longer period, after experiencing a 25 per cent increase in calls from struggling SMEs.

British Gas has also announced support for affected businesses with a £15 million grant fund and offers to extend existing contract terms for some businesses by 12 months in order to lower their rates.

Struggling manufacturers are being advised to contact their energy supplier to find out whether support is available to them.

SME manufacturers in Greater Manchester can also access expert advice from GC Business Growth Hub to help reduce their energy consumption and cut their bills, including:

  • One-to-one advice from energy efficiency specialists through our Sustainability and Net Zero Service, who are experts in their field when it comes to identifying and implementing opportunities to cut energy waste from buildings and processes – often at low or not cost
  • Our expert Manufacturing Service can also provide tailored one-to-one support to take costs out of your business through lean measures to improve your productivity and profitability
  • A set of introductory energy saving guides and recorded webinars are also available via our #HereForBusiness campaign.

For more information on the support available, contact one of our Manufacturing Advisors today.

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