Commenting on the eve of the introduction of the Energy Bill Discount Scheme, which will see a significant reduction to the level of financial support available to businesses to tackle rising costs, the trade body has reiterated its call for Ofgem to take energy suppliers to task for bad practice.
It comes as 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.
Under the Government's current Energy Bill Relief Scheme, which expires today (31 March), wholesale gas and electricity prices are currently fixed for all non-domestic customers. However, under the new scheme, businesses will get a discount on wholesale prices rather than costs being capped.
UKHospitality says the change will leave the sector facing a £7.3bn hike in its bills, up from its previous estimate of £4.5bn. It adds that energy costs now account for 11.4% of business turnover across hospitality, up from 3.4% before the crisis.
“The energy crisis has suffocated businesses over the past year, causing thousands to fail and forcing many more to take drastic measures to afford extortionate energy bills,” says Kate Nicholls, chief executive of UKHospitality.
“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.”
Nicholls says the energy regulator’s current plan to ‘consult on suggested actions’ in the summer is not at the speed the sector needs and needs to move much quicker to rein in 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,” she adds.
