Under the ‘Micro’Scope: Government Neglect of East of England’s Microbusinesses During a Time of Crisis

Many owners of Microbusinesses in the UK feel neglected when it comes to receiving adequate support from the government. Small business leaders express ongoing concerns regarding the high energy costs. A mere four percent of those surveyed expressed satisfaction with the government’s support measures aimed at assisting with energy bills during the upcoming winter.

With 5.2 million microbusinesses collectively contributing £808 billion to the UK economy, this sector plays a significant role in the nation’s financial stability. Nevertheless, as indicated by a recent survey conducted by Valda Energy, many business owners in the East of England believe that the UK government is not sufficiently addressing their needs and is failing to provide the necessary support.

As the winter season approaches, microbusiness owners (those employing fewer than ten individuals) are becoming increasingly anxious about the escalating energy expenses. They are advocating for more focused aid, including the establishment of a regular winter support program for businesses grappling with the most pressing challenges.

Steve James, the CEO of Valda Energy, a specialized energy supplier for small enterprises, shared the survey’s findings, stating, “Only four percent of the business proprietors we surveyed expressed contentment with the government’s assistance for energy bills. Alarmingly, nearly one in five, grappling with rising costs, soaring energy prices, and the impact of the cost-of-living crisis, voiced concerns about potential closure within the next six to twelve months.”

According to the survey, 65 percent of business owners in the East of England believe that the government lacks a comprehensive understanding of their requirements, with 28 percent feeling neglected in favor of programs that focus on consumers and larger businesses.

Moreover, 52 percent of respondents expressed dissatisfaction with the government’s Energy Bill Relief Scheme (EBRS), asserting that it does not offer adequate support during the winter months and is not in effect for a sufficient duration. Only 13 percent of businesses found the less generous Energy Bill Discount Scheme (EBDS) to be providing adequate assistance.

Valda Energy’s research underscores widespread concerns among small businesses in the region, with 50 percent advocating for the introduction of a regular winter support package this year, and 32 percent requesting tailored aid for businesses confronting the most substantial challenges. Others are calling for increased subsidies for green energy, complimentary carbon audits, and additional support to enhance energy efficiency.

In addition to energy costs, microbusinesses are contending with apprehensions related to rising inflation, interest rates, supply chain disruptions, difficulties in recruiting skilled staff, and complex industry regulations. The survey indicates that 60 percent of respondents in the region have ceased regular financial forecasting, and among those who continue, only 25 percent plan more than 12 months ahead.

Mr. James is urging collaboration between industry, government, and Ofgem to create a customized funded support package for the most vulnerable businesses, including those that entered high-rate fixed-term contracts in 2022. He stressed, “Small businesses are vital to the regional economy’s success, yet their collective voice often goes unheard. I believe the government has a responsibility to take action now, before demand increases over the winter months, by transparently communicating the available support this winter and providing sustained protection for companies in the medium to long term.”

Furthermore, he argued that providing the right assistance might not require additional government expenditure beyond what has already been pledged. He noted, “One feasible option is to allocate the underspent funds from the EBRS scheme, currently estimated at around £11 billion, to support businesses with high-rate fixed-term contracts. This proposal garnered the support of 87 percent of the microbusiness owners surveyed in the region.”

For more information visit the Valda Energy website >> https://www.valdaenergy.com/

Photo supplied by Whistle PR