Trade body UKHospitality predicts energy bills will increase by £7.3bn for the hospitality sector as government support is scaled back.
The Energy Bill Relief Scheme, introduced in October to provide UK businesses with support with energy bills, has now been replaced with the Energy Bills Discount Scheme which discounts rather than caps energy prices until 31st March 2024.
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.
Energy costs show no sign of relenting, with costs now accounting for 11.4% of business turnover, up from 3.4% before the crisis.
UKHospitality is calling for meaningful action to rein in profiteering energy suppliers and warns that without it the sector will see thousands of venues go out of business.
UKHospitality chief executive Kate Nicholls said: “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.
“A £12 billion increase in energy costs in a year is almost incomprehensible and, frankly, unsustainable for much longer. The transition to a continued, but significantly reduced, energy support scheme does not provide much comfort for anyone, especially with the £7.3 billion 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. Its current plans to ‘consult on suggested actions’ in the summer is not at the speed the sector needs and it needs to move much, much quicker to rein in these 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.”