Member Blog

Rising energy costs have an impact on every business operating in the UK today, but new businesses are at an advantage. As the owner of a start-up, you have the opportunity to build energy management and procurement strategies into your operational procedures from the ground up. Good energy procurement and management can be the difference between success and failure; get your energy prices right and you could have a significant competitive advantage over your rivals.

The range of tariff and contract options available from suppliers in the UK market can be intimidating, especially if you’re just starting out. To help you navigate the energy market, we’ve put together our top five energy procurement tips for new businesses.

• Know what you want. Don’t enter into an energy contract without first researching the kind of products that are available to new businesses. You may think new businesses are limited to fixed price contracts, but you may also be able to get a flexible or semi-flexible deal. Flexible deals can help you make significant savings over the length of your contract. You should also decide how long you’d like your contract to last. For instance, fixing your energy price for three years will give your business some budget stability while it’s getting off the ground.
• Set a realistic budget. Factor your energy overheads into your operating budget and make sure you can meet your financial obligations to your energy supplier. As a new business, it’s important to establish a good credit history with energy suppliers.
• Prepare to face credit objections. New businesses do not have an established credit history with energy suppliers, so you could face credit objections from your proposed supplier that will prevent your energy contracts from going live. The UK has a complex energy market and suppliers take on a lot of risk, so they can often be particular about the kind of customers they’re willing to accept. Some suppliers won’t deal with new businesses at all. If you find yourself facing credit objections, seek expert advice.
• Compare prices. Your energy supplier will send you a list of unit prices available for each contract type you’re considering. At this point, you should shop around and compare prices with other suppliers to make sure you get the best deal you can.
• Buy at the right time. Make the energy market your business. You don’t have to read the OPEC Monthly Oil Market Report, but keep an eye on the news for pricing news and events that may affect energy supplies. By becoming more aware of the energy market and how prices fluctuate, you have a better chance of fixing your deal when prices are low.

In short: make sure you know what you can afford to pay, the type of contract you’d like to agree, and the length of the contract you’re prepared to enter into. The more informed you are about the energy industry and your own requirements, the better off you’ll be when you’re setting up your energy accounts.

TOP FIVE TIPS…on getting a good deal on a commercial property lease

1. Rent Free Landlords are having to accept that commercial tenants are more scarce than they used to be and they are therefore willing to offer incentives to prospective tenants. Rent free periods are the most common way of doing this and can give you valuable time to get your business up on its feet.

2. Schedule of Condition A lot of leases contain an ‘open ended’ repairing obligation for tenants, which can require you to improve the state of the property. Negotiate that your liability is limited by reference to the schedule of condition showing the state of the property on day one.

3. Rent Deposit Rent deposits are common and provide that your landlord will hold a lump sum to cover any tenant default. They are normally not refundable until the end of the term. Negotiate that these funds should be released earlier, whether it be at a fixed point in time or when a financial goal is achieved (ie turnover reaches three times the rent); do you really want that cash to be tied up until the end of your lease?

4. Rent Reviews Rent reviews are normally done by reference to the open market and can leave you open to potentially large increases (especially if you have negotiated a good initial deal). Consider whether reviews by reference to inflation may give you a better deal. With inflation linked reviews you are able to track increases and you will get less of shock when it comes to review time. Do note that this type of review will always lead to increase but may reduce the extent of the increase.

5. Break Clause A long lease term can be as much a burden as it is a benefit. Negotiate the inclusion of a tenant’s break clause to permit you to end your lease early if needs be. Remember you are liable to pay rent for the whole term whether or not your business is making money!

We are very much in a tenant’s market, so don’t be afraid to negotiate; the worst a landlord can do is say no… If you want some specific advice or guidance, please contact us.

Workplace pensions law

From October last year, changes were made to pensions law that will ultimately affect all employers with at least one worker in the UK.

Are you aware of the changes and have you made arrangements to comply with the new rules? In summary, the new law means that employers will need to:

• Automatically enrol certain workers into a pension scheme • Make contributions on their workers’ behalf • Register with The Pensions Regulator (‘the regulator’) • Provide workers with certain information about the changes and how they will affect them

The new employer duties have been introduced in stages, starting back in October. Each employer will have been allocated a date from when the duties will first apply to them, known as their ‘staging date.’ Employers can check their staging date by going to the Pensions Regulator’s website at the link below:https://www.thepensionsregulator.gov.uk/employers/staging-date-timeline.aspx

The staging date is based on the number of people in an employer’s PAYE scheme. Employers with the largest numbers of workers in their PAYE schemes will have the earliest staging date.

Workers who need to be automatically enrolled on the new schemes are known as ‘eligible jobholders.’ An eligible jobholder is someone:

• Aged between 22 and state pension age • Working, or ordinarily working, in the UK • Earning more than the tax free earnings threshold (currently £9,205 per annum)

The location of the employer is not relevant when considering if a worker is an eligible jobholder. Neither is the worker’s nationality or the length of their stay in the UK. What is relevant is whether the worker is working, or ordinarily working, in the UK.

The weight of quotes and statistics are overwhelmingly for companies embracing mobile sites. The speed at which customers make a move is staggering, and every vote they make affects your bottom line. For a fractional outlay compared against lost custom you could potentially secure, and lock in each and every customer accessing your business on their mobile.

It’s not just your customer you owe it to. Give yourself a break too.

You have the power to mobilise your customers into action. By saying yes to a mobile friendly site you can expect to watch business grow

Making your current website accessible to your mobile customers doesn’t just make sense in today’s economy. It’s essential. Meet your customers on every corner. Join them – at their convenience.

You may never know how much custom you’ve missed. But you’ll certainly enjoy the new custom on its way.

So what do you say? It’s doesn’t make business sense to give your competitors any more easy pickings. Going mobile lets you reclaim the custom that was yours in the first place.

Mobile won’t be ignored and accepting the change now will mean quicker, greater benefits in the future

If you aren’t the decision maker, talk to them. Let them know that you get the power of going mobile. Point them to some facts and tune into the sweet sound of your sales line ringing off the hook!

81% of smartphone uses access the internet on their mobile devices.Google know this is so big that they and others are well into the mobile market big time.

Any household company that you can think of will have their own custom mobile app designed to attract and engage the customers they want to continue serving.

Communication is no longer one way. Your customer both wants and needs to hear from you and about you. And they want to be able to talk back, and share that with others.

So an app, tailored to your company, is the perfect way for you to introduce yourself, interest your customer, entice them to buy and facilitate sharing.

Businesses who don’t, who continue to stay with a static website will miss out on our innate need for regular social contact by communicating with others.

It’s here, it’s big and you need to be part of it.

Look at the number of apps in the Apple and Android market. It’s in the millions. All designed in that commercial effort to fulfil the basic business function of serving customers.

Without customers you have no business. Growing your business through an app is an exciting extra benefit, but the first rule of thumb must be to keep giving your customers what they need to maintain a loyal following.

A fully functioning business app, designed to your business, will fill this communication gap. And it will fill it so well that you’ll go way beyond just keeping the custom you already have.

It has the powerful potential to put you leagues ahead of your competition. So far in front that you can expect a considerable change in your business fortunes.

Isn’t it time you dived in and follow the likes of Google and Apple?

Energy management is quickly becoming a business necessity. Growing environmental concerns and rising energy prices are substantially increasing cost pressures on businesses – and it’s only going to get worse. Finding ways to reduce your energy consumption and go a little greener is becoming ever more important.

Making changes

Energy management can be time-consuming, but there are several positive changes businesses can make without devoting excessive resource to the process.

• Green energy tariffs.Switching to a green tariff doesn’t mean that the electricity coming out of your sockets will be directly from renewable sources. Instead, your supplier will buy the volume of electricity that matches your energy use from a renewable generator. In theory, more businesses signing up to green energy tariffs will increase the amount of power from renewable sourcing circulating through the National Grid. Signing up to a green tariff could mean that your Climate Change Levy is reduced – or even removed entirely.
• Smart meters.If you haven’t already invested in a smart meter, now is the time to do it. Smart meters transmit regular meter readings directly to your energy supplier, eliminating estimated bills. Your smart meter can also provide you with a wealth of information about your business energy use – providing you have access to a data reporting platform. The true value of a smart meter lies in its data reporting capabilities, and you need access to that data in order to make the most of it.
• Switch things off.Switching equipment off will reduce your energy consumption, and probably your bills – but remembering to switch off the lights and the kettle at the end of each day is only half the battle. Many businesses turn on all of their equipment every morning purely out of habit, even when it’s not necessary. Improving your operational efficiency could mean big energy savings.
• Outsource. Outsourcing your energy management is a great way to increase your energy efficiency without devoting excessive staff time to the problem. Your energy management consultant will be able to assess your business energy use and draw up a step by step plan for improvement. They’ll be able to help you identify energy saving technology that will benefit your business, and help you access financing schemes like the Non-Domestic Green Deal and the Energy Efficiency Financing Scheme operated by Siemens Financial Services and the Carbon Trust.

Control consumption and reduce environmental impact

Energy costs and the environment are often pitched as two disparate and incompatible concerns for business, but the truth is they go hand in hand. Reducing your energy consumption by implementing green energy strategies will reduce your business’ impact on the environment and should reduce your energy costs.

There are many banks providing business finance in the UK and dozens more organisations providing finance, from peer-to-peer lenders to asset based financiers.

Each lender’s regional reach and appetite across sectors differs – so it may well be that whilst one lender can’t help you – another might.

The Government and BBA have worked with an array of finance providers to produce a useful directory to help you find alternative finance providers:

www.businessfinanceforyou.co.uk

There are also Community Development Finance Institutions, peer-to-peer lenders, asset financiers, invoice finance and more that can be accessed through businessfinanceforyou.co.uk and you can find out more at www.gov.uk/business-finance-explained.

Please also use the Norfolk Chamber Directory to find local sources of funding

Many businesses aren’t aware that when applying for finance, lenders will check the credit scores of the business and its directors.

Your credit score can be affected by a range of things, including:-

• Unpaid bills (yours or others at your address)
• Whether you’re on the electoral roll
• Paying suppliers promptly
• Past searches for credit (including getting quotes for finance or utility contracts)

If you have been surprised to be declined finance it may be worth asking a credit reference agency for your score – visit www.bipa.uk.com to find out more.

The major banks ( Barclays, HSBC, RBS (incl. NatWest), Lloyds (incl. Halifax/Bank of Scotland) and Santander (plus NI banks) in the UK and Northern Ireland have agreed that if your loan application is declined you have the right of appeal, as part of the BBA Better Business Finance Programme (betterbusinessfinance.co.uk).

When an appeal is raised, the decision will be reviewed by a second person from within the bank who was not involved in the original decision.

The banks will consider all the information originally provided and ask for more where they think it is necessary.

Barclays https://tinyurl.com/BarclaysAppeals

RBS https://tinyurl.com/RBSAppeals

Santander https://tinyurl.com/SantanderAppeals

Lloyds TSB https://tinyurl.com/LloydsAppeals

HSBC https://tinyurl.com/HSBCAppeals

The whole process is monitored and scrutinised by an independent team to ensure the banks are implementing a fair, prompt and transparent process.

In the first year of the programme, an appeal led to a change in decision in 4 out of 10 cases as a result of the process.

How do I appeal? If you have been declined finance you bank should have given you instructions on how to appeal with your decline. You will need to instigate an appeal if you feel you have been declined unfairly. In most cases it can be started with a phone call to your bank, and there isn’t a charge.

An appeal can be made after any formal request for lending had been declined – this means any application that has gone through a credit assessment, after the bank has received the information from you to make a decision.

The bank should explain to you why your application has not been successful, and work with you to reshape the request if possible and give guidance on alternative sources of finance if appropriate. The banks and the BBA are making this as easy as possible.

Where is there more information? Contact your bank for information on appealing.

Alternatively, the participating banks and the BBA launched the website https://www.betterbusinessfinance.co.uk to provide more information on the appeals process and lending in general.

There is a range of Government support for finance Just as businesses have different finance needs, there are a range of different Government support products for businesses, from grants to loans for start-ups, to tax breaks for angel investors.

You can find information on all Government schemes, a tool to help identify the most relevant ones at: gov.uk/business-finance-support-finder

What is the capital grant scheme? The Low Carbon KEEP capital grant scheme allows SMEs to recoup 40% of the cost of purchasing capital items, such as essential equipment or software, which are fundamental to the success of a Low Carbon KEEP project. All capital items purchased utilising Low Carbon KEEP capital grant funding will remain in the ownership of the SME partner. Should the Low Carbon KEEP project come to a premature conclusion, the amount of the capital grant awarded will be proportionally reduced. . If you decide not to apply for capital funding at the beginning of your Low Carbon KEEP project, but change your mind afterwards, you can still apply at a later date, provided your project has not come to an end.

What is the maximum value of capital funding available? The maximum value of ERDF capital funding available to any single project is £20,000. All grant calculations and payments are made excluding VAT. The capital grant funding can be used to purchase more than one item on more than one occasion

Can you provide an example of a capital grant item which is deemed fundamental? All items deemed eligible for funding must be fundamentally linked to the project activity proposed and be directly beneficial to its delivery. For example a logistics project might legitimately propose capital expenditure on vehicle tracking devices but not on the installation of low energy lighting equipment in the SME Partner’s offices. The role of the capital items proposed must be fully explained and justified in the body of the application. All items must be procured according to ERDF regulations to be eligible for payment. The approval of proposed capital expenditure is entirely at the discretion of the programme’s assessment panel. If in any doubt as to the legitimacy of a proposed capital purchase the partnership must consult with the programme management team prior to submission of the application.

Who is responsible for payment when initially purchasing capital items? All claims to funders are made retrospectively on a quarterly basis, with the SME incurring the entire expenditure in the first instance.

When will the SME partner receive the funds from the capital grant scheme? No grant will be paid to the SME Partner before it has been successfully claimed from funders by the programme management team. This may take several months.

When can the SME partner make a capital purchase to be eligible to claim funds from the capital grant scheme? The SME Partner must be prepared to enter into a Capital Grant Agreement with the Low Carbon KEEP Programme prior to any purchases being made. No claims will be processed without a fully signed agreement in place. All items must be fully evidenced and that evidence submitted in a timely manner to be included in programme claims to the funders.

Any other useful information? All costs detailed in the application must be as accurate as possible. The monetary amounts detailed will be used to form the basis of the Capital Grant Agreement and will not be altered after approval of the project. It is strongly recommended that accurate quotes are sought from potential suppliers to achieve the required level of accuracy.

For more details contact

• Email: lowcarbon@anglia.ac.uk
• Tel. 0845 196 4310/5818

Britain is getting greener. The drip feed of climate change news stories, new-look rubbish dumps and colour-coded bins filling our front gardens has paid off and the amount of rubbish recycled or thrown away by the British has fallen by 15% over the last six years. Recycling has made a big impact, with around half our household waste now recycled. However, there’s also been an overall reduction in the amount of household waste produced, falling in by as much as 7% in some places. Some of this is down to the recession – people spending less equates to less packaging; a stagnant housing market means less moves and fewer attics, cellars and sheds to be cleared. However, one of the most striking trends is the decline in the amount of newspaper being recycled and this correlates directly to the 28% fall in the circulation of British national dailies as we increasingly turn to digital sources for our news. In fact, the latest Reuters Institute Digital Report shows that smartphones now play a big role in news consumption with 28% of their survey sample accessing news via their mobile each week in the UK.

Good New for the Environment? Good news for the environment then? Possibly, but the perception that digital news is somehow ‘carbon light’ compared with newspaper products is wrong. The Guardian has taken the bold step of publishing the carbon footprint for its entire digital media operations and estimates that for providing content for www.guardian.co.uk and www.guardiannews.com this was about 10,000 tonnes of CO2e last year. This is around a third of the company’s current overall carbon footprint and about the same as the carbon emissions of Luxemburg!

Behind this ‘big number’ is the Guardian’s willingness to try and get under the skin of the complexity of the internet and attribute realistic power consumption and CO2e figures to each leg of the ‘news pixel’s’ journey – from the device you read the news on, across the network, to the various datacentres and servers they control around the world and back again. Most revealing is the fact that the vast majority of the energy consumed is by customer devices – Wi-Fi hubs, modems, laps tops and smart phones account for about 86% of the footprint, while the data centres that support them account for single digit percentage points of power usage.

The Guardian covers its report with caveats around the estimates and informed guesses it has had to make about these emissions, however the holistic view of the energy consumed by a pixel of news from the journalist’s typing fingers to the reader does reveal that behind the shift from paper-based news to digital news is an equally important shift in energy consumption from the producer to the consumer.

Related articles: Digital carbon footprint: steps in the right directionhttps://www.guardian.co.uk/sustainability/sustainability-report-2012-digital-carbon-footprint

Last week, the House of Lords voted again on the Government’s proposed changes to civil liability for employers who breach health and safety legislation.

The Lords had previously voted against Clause 62 of the Enterprise and Regulatory Reform Bill, removing civil liability for such breaches but that was overturned in the Commons, and the matter was returned for further consideration by the Lords earlier this week.

The ‘controversial change’ (not much in real life in our opinion) will see an amendment to s47 of the Health and Safety at Work Act 1974, removing the existing right of an employee to rely on a breach of health and safety legislation, in order to obtain compensation.

The current law provides that where statutory health & safety regulations are not complied with leading to injury or damage, the claimant can seek compensation on the basis of the employer’s breach of those regulations. The changes mean that it will only be possible to claim compensation for accidents which would currently constitute a breach of health and safety regulations where it can be proved by the claimant that the employer has been negligent at common law.

The proposals stem from Professor Lofstedt’s report, “Reclaiming health and safety for all: An independent Review of health and safety legislation” which recommended an overhaul to the regulatory system, including the reduction of (perceived) red tape & the review of strict liability for civil actions.

However, in his progress report published earlier this year, the Government’s approach to civil liability is “more far reaching” than Professor Lofstedt anticipated. Suggestions have also been made that this change will place a heavy reliance on the Health & Safety Executive to ensure compliance, particularly given recent funding cuts (about 35%).

However, those in favour of the change argue that it is not justifiable to hold employers’ liable for incidents outside of their control, which could not reasonably have been prevented and that the change is required to address a perceived and growing “compensation culture”. The Government’s view is that fear of civil suits is causing employers to over implement health & safety requirements and to insist on unnecessarily cautious work practices, both of which are increasing costs and reducing business growth, and stopping people from doing things sensibly- hiring an expensive work platform – when a bit of planning, a well maintained ladder and 2 competent members of staff could have done the job

Concerns have been raised about the impact that the removal of civil liability for health & safety breaches will have on injured parties.

At present, an employer can often defend a civil claim for breach of health & safety regulations on the basis that it has taken all reasonably practicable steps to comply with its duties. There are a few limited circumstances where strict liability applies, allowing an employer no defence if a breach of the relevant regulation is established.

For example The requirements of the Lifting Operations & Lifting Equipment Regulations 1998 (to thoroughly examine lifts/ lifting gear) & the requirement for a Written Scheme of Examination under the Pressure systems (Safety) Regulations 2000 are examples of strict liability, many other requirements have the caveat so far as is reasonably practicable’ which gives business the opportunity to devise a cost/ benefit solution but is obviously open to (mis)interpretation and over zealous enforcement/ action

During the Lords’ debate, the Government argued that the cases that will be most significantly affected by this change are “those which would have previously relied on an absolute or strict liability duty”. This argument appears to be based on the assumption that the issues and evidence to be considered for a claim in negligence will still be broadly the same as those which currently apply in relation to claims brought for a breach of statutory duty where the “reasonably practicable” defence is available, and that therefore the change will not place any greater burden on claimants than they currently face.

However, the removal of strict liability would seem to move the risk of injury through simple misfortune from the employer to the employee, and seems to be a step away from the “no fault” approach to compensation which some have argued for. The Lords’ vote means Clause 62 will be included as part of the Enterprise and Regulatory Reform Bill when the bill receives royal assent.