Businesses call for more government support to manage energy bills amid fears of power outages

• Rising energy costs and fears of power outages are a top concern for nearly half (43%) of mid-sized businesses this autumn and winter
• Firms call for more support from the next Prime Minister to manage rising energy bills and support growth
• A fifth say the energy and cost of living crisis has or will be more challenging to them than the COVID-19 pandemic, Brexit or the 2008 financial crisis

Rising energy costs and power shortages are two of the biggest concerns for businesses this autumn and winter, according to new research by accountancy and business advisory firm BDO.

The bi-monthly survey of 500 medium-sized businesses’ leaders also reveals that supply chain disruption is a top concern for one in four (26%) businesses over autumn and winter with mounting inflation a top concern for almost a quarter (23%) of firms. A fifth (21%) say rising interest rates and the cost of borrowing are one of the biggest threats they face over the coming months.

Despite speculation that there will be a further rise to interest rates in November, businesses are increasing the amount of debt they take on as inflation drives up costs across their supply chains. 18% are increasing their borrowing, while one-fifth (20%) of firms are taking on new debt or overdraft facilities. 

To manage inflationary pressures, a quarter (25%) of firms are already increasing the price of goods and services for customers. Looking ahead to Christmas trading, nearly half (46%) plan to raise or further increase the cost of goods or services in the next three months.

More support from Government needed to help businesses this winter

A fifth of businesses surveyed (20%) say that the current energy and cost of living crisis has or will be more challenging to them than the COVID-19 pandemic, Brexit or the 2008 financial crisis. Faced with this tough economic environment, businesses are calling for further support from the next Prime Minister to deal with the rising cost of energy, as nearly half (45%) believe the Government is not doing enough to address increases in energy bills.  

Firms will also be hoping for news of how the new Prime Minister plans to grow the UK economy. Increasing access to labour is the policy intervention that 25% of businesses would most like to see, while over two-thirds of businesses (67%) say the Government is not doing enough to create opportunities for exports or market growth, or reforming education and skills to ease the so-called ‘skills gap’. 

Businesses taking steps to offer cost of living support for employees 

Despite on-going business challenges, many firms have prioritised supporting employees with the cost of living. A fifth (21%) said that this is one of their biggest challenges in the run-up to Christmas. Of those businesses offering additional support to employees, more than half (56%) are specifically targeting more junior or lower paid staff. 

Ed Dwan, Partner at BDO LLP, said: “Businesses are facing an exceptionally difficult operating environment with costs rising across the board, ongoing supply chain disruption in the lead up to Christmas and an uncertain geopolitical climate. 

“With a leadership contest for the new Prime Minister now underway, businesses are calling out for certainty and the right support ahead of a tough winter. These businesses are the engine of the UK economy and the pressure is on Government to provide the interventions that firms need to drive their growth.”

Note to editors

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world. 

The organisations we work with are Britain’s economic engine –entrepreneurially-spirited, high-growth businesses that fuel the economy.  

We understand the ambitions and entrepreneurial mindset of those we work with and have the global reach, integrity and expertise to help people and businesses succeed.  

For more survey findings, visit our Rethink survey page.

BDO LLP
BDO LLP operates in 18 offices across the UK, employing 7000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 164 countries, with 95,000 people working out of 1,713 offices worldwide. It has revenues of $11.8bn.  

Contacts    

Headland Consultancy: 
Email: ehatfield@headlandconsultancy.com  
Tel: +44 (0)7798 687042