According to the Federation of Small Businesses (FSB), it is estimated that a typical business in London, with a 30kWh annual consumption, would see the cost of its annual electricity bill increase from £4,700 to £21,200 – with their gas bill jumping from £1,350 to £7,050.
In addition to this, the FSB’s latest data revealed that 1,800 companies across England and Wales registered for insolvency in July, with many being forced to close their doors due to simply not being able to keep up with rising costs.
One adviser, David Penney, director at Penney, Rudy Winter, tweeted: “Energy bill used to be £150 pm and he agreed to increase it to £250 pm.
“EDF then took £347, despite me being > £400 in credit. Now got it back down to £278.”
Penney also tweeted a screenshot from his office landlord which said: “Our specialist utility team currently estimates gas to rise by 463 per cent and electricity to rise by 224 per cent.
“These figures however are subject to change moving forward due to the ever evolving situation.”
However, Philip Milton, chartered wealth manager at Philip J Milton & Company, said: “The bills will indeed have a big effect but fortunately we are well capitalised to take it on the chin.
“Our solar panelling suddenly becomes ever more valuable of course as we save that much more. Our electricity rate has been suggested to go from around 26pu to £1.06pu and the standing charges per day are rocketing too.”
Despite being financially stable, Milton said the industry will be “adversely affected” as the majority of its fees come from a pot of capital which is either static or down since January yet the overhead costs - including salaries which are expected to rise to help employees with their costs of living - are up.
SJP is no different to other businesses right now and we continue to keep a close eye on developments in the electricity and gas supply markets St James's PlaceEarlier this month, prime minister Liz Truss told the Commons that the average household will have their annual energy bills frozen at a maximum of £2,500 for two years.
Energy companies will be capped on the amount they can charge per unit of energy used, though the details of this have not yet been announced and it will likely still mean an increase for many.
Speaking to FTAdviser, Milton said he also has a small hotel which has seen energy costs rocket.
“The bills have gone-up three fold already and we had already just been hit by the restriction on the use of red diesel as well,” he said.
Milton has invested in £45,000 of solar this summer and argued that this has helped.
“However, prices of accommodation will have to rise if energy prices stick at these daft levels,” he said.
Environmental impact
Meanwhile, Quilter chief operating officer Karin Cook, said Quilter is not an energy intensive business, but like most businesses it has taken steps to make its energy use as efficient as possible.
“Sharp energy price rises are a factor, but the primary driver is environmental and to reduce our Scope 1 and 2 emissions,” she said
“As part of this, our workplace strategy considers our office footprint, renewable energy transition and enhanced energy efficiency within our buildings.
“This includes reviewing our office use across the UK and we have already combined offices in some regions where it makes sense strategically, which also helps to reduce our estate costs and energy use.”
Quilter has energy saving initiatives such as installing LED lighting and light motion sensors in the buildings, and it has also engaged with an energy broker to ensure costs are contained as much as possible in the current market.
“We analyse and benchmark energy use against previous years to make sure our budgets and forecasts are accurate,” she said.
“All energy costs are fully included in our business plans and do not have a material impact on the group’s strong balance sheet and liquidity position.”
Yet while some are making changes now, others were ahead of the curve.
Speaking to FTAdviser, Julian Pruggmayer, principal of Financial Risk Management said he has always worked from home because it is “cheap and convenient”.
Likewise, a spokesperson for Pimfa said it had taken the decision during Covid that everyone should work from home and that has remained the case since, with the option of some flexible office space.
To lease or not lease?
Others such as St James’s Place said there has been no change to the business.
A spokesperson for SJP said it has not had to make any changes to office locations but where there is the opportunity to do things differently - such as the creation of flexible work space to support agile working - the firm is doing so and exploring future improvements.
“They remain open as usual and employees continue to use them in line with hybrid working arrangements,” it said.
“But SJP is no different to other businesses right now and we continue to keep a close eye on developments in the electricity and gas supply markets. We have fixed costs in place for supply beyond this year across a number of our offices, and are factoring rising costs into budget planning – particularly where we hold leases which are subject to service charge provisions.”
Wingate Financial Planning financial planning director Alastair Cunningham said his premises are leased off the council and as far as he is aware, this is covered as part of the rent.
“All staff have access to the office as and when required, though we allow them to work from home on a 'hybrid basis' and cannot see us making provision for home energy as that’s voluntary,” he said.
sonia.rach@ft.com
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