Energy Bills: “The Government Needs To Show More Hospitality To The Hospitality Sector”

amber energy comments on UKHospitality’s call for an energy market investigation and calls on the Government to offer a meaningful solution

Nick Proctor, founder and CEO of amber energy, the energy management consultancy and utilitech pioneer, comments on UKHospitality’s call for an investigation into the hospitality energy market, which cites issues being faced by hospitality businesses:

“The hospitality sector has suffered more than almost any other industry due to Covid-19 and the effects of lockdown. It’s the pubs, clubs, restaurants and hotels that we all miss the most that are at the greatest risk of financial hardship due to the pandemic, but so far the sector hasn’t been given the same level of support that others have. Eat Out To Help Out is one welcome initiative, but the whole hospitality industry has a lot of work to do to get back to some sort of equilibrium. And when it comes to energy - one significant and unavoidable cost that can really help or hinder a business’s recovery - we believe that the Government has a significant role to play.

“While a lot of energy suppliers have deep pockets, they’ve been hit hard by lower energy use in the industry and by a number of larger chains going into administration. But energy suppliers aren’t protected from these events and some are trying to find ways to protect themselves from further losses due to payment defaults. Unfortunately, that’s why we’re seeing some of the high up-front deposits and energy prices that UKHospitality has pointed out."

Koula Achillea, finance director of one of the fastest growing restaurant and bar chains Oakman Inns and Restaurants, reflects on the experience of businesses in the hospitality sector who have faced large upfront payment demands from energy suppliers, and says, “It appears that at our time of greatest need, rather than receiving additional support, the hospitality industry is being penalised. This blanket approach across the whole industry is not justified as a measure to assess energy suppliers’ own risk. The measures that are being introduced by some energy companies are counter intuitive and act as a force against the initiatives introduced by the government to specifically support the hospitality community and the 2.4m people employed within it.”

Nick believes there is a solution to the current high deposits for energy that the hospitality sector is facing, “An energy supply account can be thought of as a credit account, where a customer pays for the energy they are going to use, not for energy they have used. We think that the UK Government could help by underwriting energy supplier losses in the event of customers defaulting on their payments, for example by covering three months of energy bill arrears. This would remove the need for security deposits sector-wide, allowing normal competition to resume.

“We’ve seen security deposits requested throughout the industry, and some as high as one and even two million pounds. But by working closely with our clients and energy supplier partners we’ve been able to remove such requirements for all our customers in the sector.

“However, there will be situations where a business isn’t able to qualify for such charges to be waived, and in these scenarios the UK Government should step in as an underwriter of last resort, and then we can hopefully see an end to the practices UKHospitality has identified, which are not done with malice but out of necessity.”