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Small firms invited to sign up to energy-saving service

Small firms invited to sign up to energy-saving service

Small firms invited to sign up to energy-saving service

Small and medium-sized enterprises (SMEs) that are keen to reduce their gas and electricity bills and minimise their carbon footprint are being encouraged to sign up to a new service from the Federation of Small Businesses (FSB).

The FSB Energy scheme could reduce members' bills by 23 per cent, cutting their costs by nearly £1,000 per year, the federation claimed.

This figure is based on the average annual saving of £973 for business gas and electricity users switching through Make it Cheaper, the company cost-cutting champion that will run the new service on behalf of the FSB.

A saving of £973 would be almost a quarter of the £4,243 that FSB members typically spend on energy every year.

The newly launched scheme will support participating SMEs in a number of ways, providing advice on securing competitive rates for their utilities and how much they could save by switching tariffs.

If requested, the FSB Energy programme could also have new contracts arranged for business customers, terminate existing contracts and remind members when fixed-price periods come to an end, preventing them from 'defaulting' onto higher rates.

These provisions could address some key issues that are reportedly holding back many smaller firms from optimising their energy arrangements.

An FSB survey last year revealed that 70 per cent of SMEs found it difficult to compare energy tariffs and 43 per cent had never switched supplier.

Dave Stallon, operations director at the FSB, pointed out that energy is an "increasingly important issue" for smaller companies.

"There are many ways they can make substantial savings through the implementation of energy efficiency measures, as well as ensuring they get the best tariff they can on their gas and electricity," he added. "Many smaller businesses, however, either don't believe they can make substantial savings or haven't trusted the market and the system enough to engage in the process.

"Our new service is designed to give smaller business owners easy-to-use advice they can trust, to enable them to make savings with the minimum of fuss."

Furthermore, the FSB said it would be representing the interests of the UK's SMEs by responding to a Competition and Markets Authority (CMA) investigation into the energy market and creating a dedicated energy efficiency resource hub on its website.

According to the CMA, Britain's smaller firms would collectively be about £500 million a year better off if competition between gas and electricity providers was functioning effectively.

The authority has raised concerns that 45 per cent of these businesses have been placed on a default tariff, which could be more than twice as expensive as a deal that had been actively negotiated.

Mr Stallon said the FSB is "very actively engaged" with the CMA to improve the energy market for SMEs.

"In combination, we are confident that our initiatives can help to make a significant difference to smaller businesses' energy bills," he added.

FSB research has shown that 90 per cent of businesses want to be energy efficient and 58 per cent have already made changes with this goal in mind.

 

Posted by William Rodriguez

Image courtesy of Thinkstock