Since the news broke last week about the record £10.5M fine imposed by OFGEM on energy supplier SSE for mis-selling, we have been asked by a number of our clients how this will affect their contract with SSE.
The first thing to be clear of is that the mis-selling this fine related to is for pre-dominantly domestic customers who have been sold a contract either in-store, by phone or on their doorstep.
Most business customers will not have bought their energy contract this way and will instead have agreed a fix price for their energy supply over a pre-detemined duration, often 12 months (if you have not agreed a contract within the last 9 months we would recommend you contact Auditel for an informal discussion to see if better value can be obtained for you). As a safeguard, if you have agreed a contract (with SSE or any other supplier) we would recommend that you check your current invoices agree with the rates you originally contracted to ensure they are correct.
Some customers have questioned whether the size of the fine may affect the customer service experience provided by SSE in the future. SSE posted half yearly profits of £398M last November and the fine, although it may seem enormous to most of us, represents less than 3% of the half yearly profits.
Finally, it was interesting to read that one of the main reasons given for the mis-selling was that customers did not understand the products they had purchased. Perhaps a good reasons to seek professional independent advice when renewing your energy contracts ?
In March 2012 the government published the Finance Bill 2012 which included incentives for companies to hold, exploit or conduct development work towards patents. These provisions are called The Patent Box and can normally be claimed in addition to R&D tax credits.
The Patent Box is essentially a reduction in Corporation Tax to 10% applicable to the worldwide profits derived from patented items or processes. These concessions are being phased in between April 1st 2013 (60% relief) and April 1st 2017.
UK and European patents are potentially eligible, as are those of certain EEA states.
An eligible Patent Box claim might result from:
a) Sales of patented products – the qualifying company is required to have undertaken ‘qualifying development’ of the item or process.
b) Sales of spare parts.
c) Sales where the patented product is a component in a larger discrete unit. For example, if the patented item were an automotive spark plug, it is theoretically possible for Patent Box relief to apply to profits derived from sales of the whole engine.
We issued a blog earlier in the week about the need for the government to extend its assistance on better information in the domestic market to small businesses. Clearly someone is listening as on the BBC News today Ofgem have announced that small businesses will receive clearer information from suppliers under new energy regulations.
So what does this mean for small businesses, those with fewer than 10 employees (micro businesses) currently are protected to some degree under the current regulations. Under the proposed changes the regulator wants to expand this to firms which spend up to £10,000 a year on gas and the same on electricity.
Last week Nick Clegg the Deputy Prime Minister annouced at the Rio+ 20 Summit that all businesses listed on the Main Market of the London Stock Exchange will have to report their levels of greenhouse gas emissions from the start of the next financial year.
The new regulations will be introduced from April 2013 and they will be reviewed in 2015, before ministers decide whether to extend the approach to all Large companies from 2016. It would come as no surprise for this to include ALL companies large and small by the time 2016 comes around.
Auditel have helped hundreds of clients address the previous Carbon Reduction Commitment legislation and are ideally placed to offer the same support for Greenhouse Gas Emission disclosure. So if you want to understand more about the new requirements please contact me and I will be pleased to help.
The DEFRA announcement can be found here
The Utilities Intermediaries Association (UIA) is a Trade Association for Third Party Intermediaries (Tpis) who facilitate energy purchasing contracts, compliance, energy management and ‘green’ schemes between suppliers and consumers. Typically these organisations will be Consultants or Brokers.
The UIA is an independent, not-for-profit company and works with organisations within the energy industry, particularly Suppliers, to improve relationships and understanding & to drive up standards by means of a Code of Practice for TPIs with an INDEPENDENT redress for clients. The UIA has regular contact with ministers, select committee members, Ofgem and sits upon and makes contributions in several Ofgem sub-committees that help formulate energy policy.
Auditel is an approved, accredited member of the UIA, having fulfilled all UIA criteria. Howard Ward, Auditel’s Facilities Services Director, was a founder member of the UIA Council in 2006, when the Association was established in response to growing concern among legitimate third party intermediaries about sharp practices being used by some in the industry.
Many of the major energy suppliers have pledged their support for the UIA. Consumer Focus and Ofgem support the initiative of the Trade Association, the Regulator having made the following statement:
“Ofgem welcomes the UIA initiative as the first step to the self regulation of Third Party Intermediaries in the energy market. We hope that the Code of Practice increases consumer confidence giving customers the assurance that their independent representative is acting with their best interests in mind.”
Using an Auditel consultant to manage your energy requirements ensures that you are provided with a high standard of service, delivered with competence and integrity and in compliance with the UIA code of practice.
All members publicly display the UIA logo, indicating their willingness to adhere to the UIA code of practice and clients can be rest assured by the independent redress scheme in the final analysis.
Posted by: Paul Foster
Significant increases in the cost of energy is a compelling reason for any organisation to reduce energy consumption. The good news is that energy cost reduction is relatively easy to achieve and can lead to significant bottom-line benefits.
Energy consumes 5 to 20 percent of overhead costs. This is spiralling upwards as tariffs continue to increase in 2012 and beyond. Organisations MUST therefore find a way of mitigating this in order to remain competitive.
Wake up ….you must pay attention to energy efficiency!
The trend is towards a cheaper, greener more sustainable future and you need an active corporate energy strategy. If you don’t adjust, you may not survive as profits decline and you will find many clients who demand environmentally friendly products just going elsewhere.
Energy management is a serious issue
This week we see the importance of getting the little things right. Last weekend The Feathers Hotel Group, based in the North West of England counted the cost of a poor internet connection, when an unnamed Formula 1 team checked out of their hotel and into a rival property just a few doors away.
This came at a cost of £3500 to the hotel group, and further more, left them with an empty hotel for the weekend. Long-term it is unlikely that the team will ever stay at the hotel again, and consequently an avoidable fault has cost the group a prestigious customer. James Pink of telecommunications experts Pink Connect had this to say: “In today’s digital age, people need to be able to access information quickly so it’s more important than ever to ensure a strong, fast internet connection for customers.”
With the ever-changing improvements in technology, customers expect excellence at all times. The problem stemmed from the hotel’s use of an ADSL connection, which are subject to a fair use policy or download limit. When these limits are reached, the hotel is then left with a slow service until the following month.
With hosepipe bans in force across much of Central and Southern England and a potential impact on businesses likely in the medium term, there are understandably many column inches devoted to this precious commodity. They warn about misuse, laud projects to conserve it and argue that ‘the UK must take a “more strategic overview of water management” if it is to avoid the “spectre” of drought becoming an annual event’.
Integrated water supplies and water trading are fast becoming the source of much innovative thinking. Severn Trent, for example, recently confirmed that technical discussions are underway to look at how to transfer 30M litres of raw water 80 miles from Birmingham to Gainsborough, using its water ‘grid’ network, in order to supply 10,000 homes in Anglia Water’s drought-stricken region. This is only possible because Severn Trent has been shrewdly shifting water from the wetter west of its region to the dryer east over the last six months to balance out regional supplies.
The cost of a First class stamp is due to rise from 46p to 60p at the end of April 2012. A second Class stamp will cost 50p, a rise from 36p.
The announcement of the price rises came after the regulator Ofcom lifted some price controls on Royal Mail.
There is very little doubt that these increases, labelled in today’s media as being “disproportionate” will have a significant impact on small businesses.
Ian Murray, the shadow postal affairs minster, said he would write to Ofcom, the postal regulator, urging it to investigate the “shameless profiteering at the public’s expense” by Royal Mail.
Businesses that will bear the brunt of the price rise will want to stock up before the increase at the end of the month, but Royal Mail is rationing retailers purchase of stamps and according to the BBC has capped supplies this month to 20% of a retailers annual allocation.
David Powell, an Auditel consultant in Leeds was quoted in The Telegraph after buying 2000 First Class stamps and 1000 First Class Large Letter stamps, in effect 2 years worth of postage, saving himself £430.00.
Retailers have reported a five-fold rise in sales as people stock up on stamps at the lower price.
Martin Lewis, of Moneysavingexpert.com, said the rush for stamps was “completely unprecedented in my memory”.
Interesting to see Nick Clegg on Breakfast TV announcing the new Government initiative requiring energy companies to tell consumers the best deal they have available. Apparently this has been introduced because of the bewildering number of products the big 6 energy companies currently have available which makes it difficult for households to select the best option for them.
Although this may be true I believe the decisions householders face are nothing compared to the complexity of business tariffs. As a business owner to ensure you are achieving best value you need to be sure that your meter is the correct profile for your business, available capacity is at the appropriate level for your demand, termination notices have been logged allowing you to change supplier and negotiate freely, VAT/CCL is charged at the correct level – the list goes on and you have not yet even started to consider looking at rates or length of contract !
It’s not surprising that when I ask my clients about the key benefits of asking Auditel to manage their energy contracts ‘time saving’ ranks just as highly as ‘financial savings’. If you are interested in finding out more about how Auditel are helping clients reduce their energy costs please contact me (firstname.lastname@example.org or 01727 865501) to discuss further.