High energy bills hit firms
11:15am Monday 12th May 2008
MORE than a quarter of all small firms in York are in "fuel poverty", but many are not doing all they can to get out of it.
That is the finding of an independent survey which showed 26 per cent of all companies in the city employing fewer than 20 people are spending more than ten per cent of annual turnover on energy bills - the baseline for fuel poverty.
The study, commissioned by Electricity4Business, a supplier of cheap electricity for small and medium businesses, also shows one in five small businesses in greater York follow closely behind by spending between five and ten per cent of turnover.
And these businesses are set to break through the fuel poverty threshold as a result of the continuing rise of wholesale energy prices.
Yet small York companies, in particular, were not doing all they could to avoid these spiralling prices, according to Electricity-4Business.
"Only 14 per cent know when their contract is up for renewal and 55 per cent claim that they don't read the small print of their terms and conditions, so remain unaware of their contractual obligations," said a company spokeswoman.
As a result of the survey, a message went out today to the 1,000 members of the York and Selby branch of the Federation of Small Businesses (FSB) to "shop around".
Its chairman, Paul Cunniff said: "I am urging all our members to check existing contracts and look for the cheapest provider.
"Often contacting existing suppliers and letting them know that you are prepared to move will result in the offer of a better deal."
The Electricity4Business research also showed spiralling energy bills had now become the second biggest expenditure, behind staff wages and recruitment costs, and ahead of the cost of premises, equipment and insurance.
The report warned: "In the face of economic downturn, it is particularly these smaller companies that are under increasing pressure to remain profitable, and controlling business costs such as electricity is the key to staying afloat."
Jonathan Elliot from business to business comparison website, MakeItCheaper, said: "According to consumer group Energywatch, one in six households are living in fuel poverty, but here we are facing a situation where actually one in five businesses with the potential for many more, are forced into a similar situation.
"However, businesses are not helping themselves and a lack of understanding about contractual obligations and not enough shopping around for cheaper quotes when contracts come up for renewal is costing these companies dear.
"By understanding their contract and benefiting from the support available from alternative suppliers and industry bodies, businesses can reduce the financial impact of high energy bills."