Over £16 million of Yorkshire business’ money locked out of UK economy as suppliers demand up front deposits.
Energy companies are holding more than £16 million belonging to Yorkshire businesses – seriously impacting vital cashflow. That’s according to an independent study commissioned this year by leading challenger brand, Utilita Energy.
In 2017, there were a reported 5.7 million private businesses across the UK, and 185,000 in Yorkshire, and Utilita’s second annual Powering the UK High Street report revealed that more than a third of those surveyed in Yorkshire (36 per cent) have paid at least £250 just to secure their energy supply.
However, with the survey findings also showing the average deposit in the region is £481, the true cost to these businesses could be far more severe.
Some have even had to fork out over £1,000 – that’s before being charged for any energy usage.
The national study looking into the treatment of small businesses by energy companies also found that over a fifth (22 per cent) of Yorkshire businesses studied have seen the cost of their energy supply rise between £250 and £500 per year.
Over a third (38 per cent) of Yorkshire businesses surveyed believe they get an unfair deal on energy. In Leeds, almost half of responders (48%) felt they were treated unfairly.
It’s the finding that some energy companies are charging an upfront fee, which is causing outrage amongst businesses in Yorkshire who are already facing tough economic trading conditions.
Utilita Energy – which does NOT ask for a deposit – said SMEs need all the help they can get.
Bill Bullen, CEO of Utilita, said: “It’s alarming to see small businesses are being asked to pay out so much money – that’s before even being connected.
“This is a huge amount of money and a major problem for SMEs. That’s certainly what they have told us. It could actually discourage them from switching to another provider – exactly what the Government says it is trying to stop.
“We never charge our new business customers an up-front fee.
“It’s outrageous and we are astonished that our survey has found many Yorkshire businesses feel they are not being trusted at a time when we should be doing all we can as a country. It is poor to see that suppliers are withholding £16m from Yorkshire businesses, who are paying £250 or more upfront. However, with the average deposit at almost £481, we believe the real picture is far bleaker.”
Less than half of Yorkshire businesses surveyed (39 per cent) are shopping around for a better energy deal every year.
Other key findings from the 2018 survey include the fact that 78 per cent of Yorkshire business owners spend up to 10 hours per week on admin – that’s 65 working days a year. On average, they work over 45 hours a week, with 31 per cent working over 50 hours a week, according to the survey.
Last year Britain’s micro-businesses generated £552 billion in sales and employed around 4.1 million people.