The exchequer secretary to the Treasury James Cartlidge confirmed yesterday that financial support offered to businesses to help with their energy bills is being reduced.
The Energy Bill Relief Scheme (EBRS), which comes to an end on 31 March 2023, currently provides a discount on wholesale gas and electricity prices for all non-domestic consumers. This includes public sector organisations, voluntary sector organisations like charities, and businesses. It came into effect on 1 October 2022.
It is being replaced by a new scheme, the Energy Bills Discount Scheme (EBDS), to provide support at a less generous level. Coming into effect from 1 April, it will provide £5.5bn of transitional support for businesses over 12 months to 31 March 2024.
The Government said it had been clear that the level of support under the EBRS was ‘time-limited’ and intended as a ‘bridge to allow businesses to adapt’. It added that the latest data shows ‘wholesale gas prices have now fallen to levels just before Putin ‘s invasion of Ukraine and have almost halved since the current scheme was announced.’
The Early Years Alliance said that the level of support announced is unlikely to do much to help early years providers, however.
Chief executive Neil Leitch explained, ‘It is incredibly concerning to learn that energy support for businesses is set to be significantly scaled back.
‘As our recent research has shown, many early years providers are already being forced to pass the rising cost of energy on to parents or in the worst cases, close their doors completely.
‘With providers also facing severe staffing shortages, record increases in the national minimum and level wage and wider inflationary pressures, it is clear that urgent action is needed to prevent the collapse of our vital sector.
‘It is absolutely vital that the Government commits to the investment and financial support needed to safeguard the future of the early years. Ministers have dragged their feet for long enough.’
He also criticised the continued lack of financial support for childminders to pay for energy.
‘We know that many childminders are having to take extreme action, such as not heating their own homes in the evenings and weekends to ensure that children attending their settings can remain warm during the week, as the result of soaring energy bills.
‘All too often, childminders are left at the bottom of the pile when it comes to government policy. We urge the government to ensure that these vital businesses are able to access the energy support they so desperately need.’
Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA) said, 'The fact that the Government plans to spend £5.5 billion on this scheme for the next 12 months compared with £18 billion over the past six months tells you that individual businesses will see the amount of support drop quite significantly. For early years settings, who are already closing at an alarming rate, this could be disastrous.
'Early years settings like nurseries provide a warm and nurturing environment as well as hot meals for our youngest children.
'If there is no more than the basic level of help for nurseries through this scheme then the Government must look to other ways to protect our vital early years sector.
'Additional funding and more support through business rates relief have to be explored. If this isn’t addressed more settings will close and parents and children will pay the price.'
The Federation of Small Businesses called the move a ‘huge disappointment’.
National chair Martin McTague said, ‘For those struggling, the discount through the new version of the scheme is not material. Many small firms will not be able to survive on the pennies provided through the new version of the scheme.
‘This is so out of touch.
‘The current EBRS scheme provides certainty for a small business owner over their rates, and has made a material difference to the survival of many small businesses. The replacement scheme will do neither.’
