Briefing – An energy rebate for commercial properties

by | Mar 24, 2022


Briefing – An Energy Bill Rebate for commercial properties

The British Association of Beauty Therapy & Cosmetology (BABTAC), British Beauty Council (BBCo), Federation of Holistic Therapists (FHT), Hair & Barber Council, National Hair & Beauty Federation (NHBF), The Sunbed Association and UK Spa Association have been responding to concerns by worried salon owners around rising energy bills and the already precarious positions their businesses are in after two years of lockdowns and operational restrictions affecting income.

After highlighting these concerns to Government, the collective issued a cross sector survey to assess the seriousness of the current situation, with stark feedback received from 1,774 businesses in a 48-hour period.

Key findings

The findings were:

  1. 94% said utility bills have increased compared to this time last year

With a third (32%) stating energy bills are their largest overhead and a further 50% stating it is their second greatest overhead – this is a real concern for businesses struggling to rebuild their businesses post pandemic.

  1. 44% of businesses within personal care reported bill rises of 0-50%, 41% said they had risen by 51-100% and 10% had risen by a staggering 101-200%.
  2. 57% have attempted to switch supplier but 70% had been unable to renegotiate their current contract with their existing supplier

Of those that had been unsuccessful, almost half said this was because they couldn’t afford the rate offered (46%) Of the 41% that responded ‘other’, the most common reason was being stuck in an existing contract with their energy supplier that they could not get out of.

  1. 82% have taken other steps to reduce their energy costs – including turning down heating, turning off lights more frequently and turning off sockets at the end of each day*. Unfortunately, some businesses also report closing the salon for a day a week to save costs.
  2. Almost half of businesses (47%) have reduced other business costs to be able to afford increasing utility bills. Most by reducing stock purchasing, and more concerningly, by reducing staff and personal wage costs. 

Call to action

Based on this data and ongoing anecdotal evidence, our collective organisations have come together to call for an energy bill rebate, similar to that offered by HM Treasury to domestic properties in February, to be made available to commercial properties.

When salons have worked so hard to survive throughout the pandemic and are now beginning to rebuild, it is short-sighted, especially in this period of recovery, not to offer this support at a crucial moment.

This is a cross-sector, wider business issue that needs addressing by Government as soon as possible. The increase in energy prices on top of wider business and staff costs such as the rise in National Insurance will be significant for many businesses. An energy price rebate would help businesses to spread the cost and allow more time for the sector to recover.

Energy efficiency measures with a positive environmental impact

The survey also provided interesting insight into the energy saving and efficiency measures that businesses are introducing including: switching off lights, turning down heating, having heating on for less time, timer plugs, draft excluders, insulation, double glazing, using disposable towels to avoid the energy costs of washing and drying, switching to LED or energy saving bulbs, checking the energy efficiency of machines, installing smart meters. A smaller number of businesses have even installed solar panels.

Although these measures are positive in respect of businesses reducing their environmental impact and operating more sustainably, it is unlikely that these changes alone will be able to fully compensate the level of increase that energy bills have, and continue to, rise by. Further action is therefore needed from Government to provide business premises with support equal to that offered to domestic properties.

Conclusion

Without specific business support, we have genuine concerns that these spiralling energy costs could be the final straw that undermines the sector’s recovery. Parity of support for domestic and commercial properties in respect of energy bills could be the difference between recovery and bankruptcy for many salons on our high streets. We therefore urge the Government to act on this issue.

Image: Josh Wood Colour Atelier 

 

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