Calls for urgent inquiry into withholding of energy support to hospitality businesses

23 January 2023 by
Calls for urgent inquiry into withholding of energy support to hospitality businesses

An urgent inquiry into the withholding of energy support to the hospitality industry has been called for by Greater Manchester's Night-Time Economy Adviser.

Sacha Lord said many operators have yet to receive any of the support they have been entitled to since September 2022 and fear they will miss out completely, with the existing scheme set to close at the end of March 2023.

Without support and with spiralling cost pressures and Covid loan repayments due in the coming months Lord warned that many operators could be forced to close.

Lord said: "I'm hearing from pubs where monthly energy bills are exceeding rent payments, and others who have temporarily shut sites during the colder winter months to save on gas and electricity costs.

"We also have evidence of energy providers who have either not yet applied any government support payments to business accounts, or have not applied the full amounts owed, and we are urgently pressing Ofgem and the government to investigate."

The owner of Capuchin Coffee in Altrincham, Greater Manchester confirmed: "Our business has not had any money put into our business account from the government yet." While Damien O'Shea, director at Stockport's Heaton Hops bar, said: "We still have not seen any government support discount applied to our energy bills."

In an article published by The Times newspaper on Saturday (21 January 2023) EDF acknowledged it had failed to pass on energy support to about 2,000 small businesses, blaming "systems issues".

Last week UKHospitality urged energy watchdog Ofgem to call out rogue suppliers who have been using government support schemes as a "cash cow".

Chief executive Kate Nicholls said suppliers had been offering rates well above wholesale prices, hiking standing charges, demanding "eye-watering" deposits and in some cases refusing to work with hospitality.

She added: "Day after day, we get more reports from businesses with another example of how an energy supplier is demanding outrageous sums of money to secure a contract on sky-high terms or, even worse, won't even engage on a contract simply because a business works in hospitality."

Operators have told The Caterer they are reducing opening hours, menu sizes and even ceasing to take a salary from their businesses in a bid to weather the cost pressures.

Lord added: "From the end of March, we will see a hailstorm of damage inflicted on businesses, from the removal of energy support to rises in income tax thresholds, which will further affect consumer spending. Unfortunately, we will see many businesses close down as a result of these extra pressures.

"We are moving from one financial crisis to another, and the Treasury urgently needs to put forward a long-term financial plan, which will not only secure economic growth and stabilise the industries currently in peril, but instil confidence in business owners across the UK."

Image: Shutterstock

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