A new, scaled back, energy scheme for businesses, charities, and the public sector has been confirmed ahead of the current scheme ending in March. The new scheme will mean all eligible UK businesses and other non-domestic energy users will receive a discount on high energy bills until 31 March 2024, rather than costs being capped. While some have welcomed the news, others critiqued the plan as being out of touch, a disappointment, and catastrophic. Government says it will help businesses locked into contracts signed before recent falls in the wholesale price manage their costs and provide others with reassurance against the risk of prices rising again. The government provided a package of support for non-domestic users through this winter, worth £18 billion per the figures certified by the OBR at the Autumn Statement. This is equivalent to the cost of an increase of around three pence on people’s income tax. The new scheme has a cap set at £5.5 billion. The Chancellor of the Exchequer, Jeremy Hunt, said: “My top priority is tackling the rising cost of living – something that both families and businesses are struggling with. That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able. “Wholesale energy prices are falling and have now gone back to levels just before Putin’s invasion of Ukraine. But to provide reassurance against the risk of prices rising again we are launching the new Energy Bills Discount Scheme, giving businesses the certainty they need to plan ahead. “Even though prices are falling, I am concerned this is not being passed on to businesses, so I’ve written to Ofgem asking for an update on whether further action is action is needed to make sure the market is working for businesses.” From 1 April 2023 to 31 March 2024, eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill, except for those benefitting from lower energy prices. A higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive – predominately manufacturing industries. A long standing category associated with higher energy usage; these firms are often less able to pass through cost to their customers due to international competition. Businesses in scope will receive a gas and electricity bill discount based on a supported price which will be capped by a maximum unit discount of £40.0/MWh for gas and £89.1/MWh for electricity. Martin McTague, national chair of the Federation of Small Businesses (FSB), said: “Today’s decision to all but eliminate help through the Energy Bill Relief Scheme (EBRS) is a huge disappointment for small businesses. For those struggling, the discount through the new version of the scheme is not material. Many small firms will not be able to survive on the pennies provided through the new version of the scheme. “This is so out of touch. Two pence off a kWh of electricity and half a pence off gas is totally insignificant for small businesses, despite costing billions to the taxpayer. The Government will inevitably have to come back. “The current EBRS scheme provides certainty for a small business owner over their rates, and has made a material difference to the survival of many small businesses. The replacement scheme will do neither. “While the New Year should be a time of optimism and excitement, 2023 looks like the beginning of the end for tens of thousands of small businesses, which have been relying on the government energy support to survive this winter. “In addition to the withdrawal of the vast majority of support to cope with high energy prices, this decision also risks stoking inflation as small businesses bills rise, but their prices will rise at the same time. The EBRS original scheme suppressed inflation by 5% points, but this has been cancelled, today. Slashing support will drive higher inflation, just as we enter a recession. “Our latest research shows one in four small firms anticipate either closing, downsizing, or radically changing their business model when the Government reduces energy support after March. Five days after the Prime Minister’s pledges to restore optimism and hope and grow the economy, small firms will feel let down by the Prime Minister’s decision to call in the scheme decision planned for December, and cutting back the scheme to such a minimal state. “What’s certain from this catastrophic move is there’ll be a cliff edge after March. The small fish and chip around the corner, your local pub, and the family-run independent laundrette – all will see much higher bills. That’s on the Government. “Gambling that wholesale energy prices will continue to fall this year is transferring the risk of further energy price shocks to small businesses. Think of the children’s nursery in East Sussex which saw its energy prices reduce from £1,200 to £600 per month by the EBRS and the small engineering company in Leicester which is facing a 500% increase in gas bills – they will have no way to mitigate a sharp jump in energy costs. “Dividing the scheme into two tiers is sensible, but not so that the tier of support for any small businesses lighting or heating premises, or using freezers or ovens, has been set so low as to mean support diluted to such a feeble level. It would have been better value for money for small firms if the £2bn cost of their element of the scheme had been used to improve energy efficiency, to reduce the need for energy from the grid. “The Government said that taxpayers cannot prop up failing or unproductive firms, which is insulting to many small business owners struggling this winter. “Since the onset of Covid, we’ve lost half a million small firms. Allowing more well-run businesses to go under would be a false economy. But with this absurd degraded Energy Bills Discount Scheme, it looks like we’re getting there.” Tom Thackray, CBI director for Decarbonisation Policy, said: “The extension to the scheme will provide respite for many firms at the start of the year and help them plan ahead for the next 12 months with more certainty. “It’s unrealistic to think the scheme could stay affordable in its current form, but some firms will undoubtedly still find the going hard. The Government has done much to protect businesses through the energy crisis. It must remain open, flexible and pragmatic in its approach to volatile wholesale energy markets as the year unfolds. “Heavy energy users and those exposed to global trade are among some of the most impacted in the current crisis, so the additional support for these firms is a particularly welcome step.”

James Clark and Howard Smith from Interpath Advisory have been appointed joint administrators to Sam Carmichael Logistics Limited. Based in North Ferriby in the East Riding of Yorkshire, the company provides warehouse and distribution services across the UK. The company had experienced cashflow difficulties as a result of temporary disruption at one of its principal customers. After assessing their options, the directors took the decision to seek the appointment of administrators. The majority of the firm’s 21 employees were made redundant prior to the appointment of the joint administrators, with three further redundancies following their appointment. James Clark, Managing Director at Interpath Advisory and joint administrator, said: “We will now commence an orderly wind-down of the business, while seeking to realise the company’s assets.”

Over half of the UK’s customer-facing businesses such as shops, hairdressers, nurseries, cinemas and gyms will be forced to raise prices if the Energy Bill Relief Scheme scheme is not extended, risking even higher rates of inflation and a further squeeze on consumer’s wallets. The new research comes from comparison service Uswitch for Business ahead of news that details of the new scheme will be announced in the House of Commons today. Uswitch for Business is advising firms to check they understand the terms of any new energy deal before signing and aren’t falling out of contract – which could lead to overpaying by as much as 50%, according to Uswitch market insight. The Energy Bill Relief Scheme is a government scheme that offers businesses a discount on their gas and electricity costs, introduced for an initial period of six months from 1 October 2022 to 31 March 2023. The revised scheme is expected to offer help with bills for a further year, until March 2024. Eligible businesses don’t need to apply for the discounts but should check if they believe it has been applied incorrectly by their supplier. It’s important to note the level of discount on bills will vary depending on contract, tariff and date it was agreed. Last week, the Chancellor explained that any future support post March, while at a lower level and cost, would be designed to help them transition to the new higher price environment and avoid a cliff edge in support. The new scheme is expected to cost £5bn, compared to £18bn previously. One in five (20%) public-facing businesses such as hotels, beauty salons and gyms, say they will need to take equally drastic action such as closing some operations, downsizing or restructuring the business, and more than one in seven (13%) said they will have no option other than to reduce overall staffing. Jack Arthur, business energy expert at Uswitch for Business, said:“The new reduced business energy support will likely be a blow to millions of struggling businesses. “This decision, originally expected in December, is likely to most impact many smaller businesses that are much relied on by the public and are unable to shield themselves from further cost pressures. “It’s important to note that the current level of Government support is tied to the type of energy contract that the business has secured and the date it was agreed. “To ensure all businesses are on the right tariff for their commercial needs, it’s important to consider how they buy and use gas and electricity. “Any business looking for a new deal must ensure they understand the terms of their contract before signing. They should also be reminded to check their contract end date as failing to secure a new agreement can add eye-watering costs to a business’ energy bill.”

AES Engineering Ltd has increased its reliability services and product offering in North America by acquiring a controlling stake in the reliability company, DATUM RMS, for an undisclosed sum. This latest expansion in the global market follows recent acquisitions in the Netherlands, Canada and Australia. DATUM RMS, headquartered in Fort Lauderdale, Florida and also with operations in Savannah, Georgia is a recognised leader in reliability and vibration monitoring services, specialising in the prevention and solving of problems with machinery, foundations and structures. The acquisition will allow the existing customers of DATUM RMS to benefit from a wider product and service offering from the AES Reliability Group of companies owned by AES Engineering Ltd. Chris Rea, Group Managing Director of Rotherham’s AES Engineering Ltd, said: “The acquisition of DATUM RMS supports our strategic decision to globalise our reliability focused businesses and further strengthens our customer offering in the important North American market.”