MORE than a quarter of small firms in Yorkshire are victims of “fuel poverty” – paying more than 10% of annual sales on energy bills.
Independent research commissioned by power supply firm Electricity4Business, a supplier of cheap electricity specifically for small and medium sized businesses, said a further 20% of firms in the region employing fewer than 20 people were spending between 5% and 10% of annual turnover on heating and lighting.
The survey of more than 1,000 small firms showed that spiralling energy bills were now the second biggest cost for these companies behind staff wages and recruitment costs.
Electricity4Business said the wholesale energy price, which has increased by 22% since January, was driving the “significant” rise in bills.
But the supplier said small firms in the Yorkshire area in particular were not doing all they could to avoid spiralling prices – with only 14% knowing when their contract is up for renewal and 55% claiming that they don’t read the small print of their terms and conditions.
Jonathan Elliot, of comparison website MakeItCheaper, said: “Businesses are not helping themselves. A lack of understanding about contractual obligations and not enough shopping around for cheaper quotes when contracts come up for renewal is costing these companies dear.
“By understanding their contract and benefiting from the support available from alternative suppliers and industry bodies, businesses can reduce the financial impact of high energy bills.”
The survey of Yorkshire firms showed that 24% had no idea if they were under contract or not and simply “pay their bills” while 37% do not understand the breakdown of their electricity bill.
Graham Paul, sales and marketing director of Electicity4Business, said: “There is no doubt that some of the contracts supplied to small businesses are confusing and it is not surprising that many companies are either unaware that they are in a contract or don’t understand how their bill works.
“It is crucial that businesses understand the point at which their contract comes up for renewal so they can shop around and avoid being rolled over into an ‘evergreen’ contract at a higher unit price.”