The energy firms going bust this autumn are leaving a trail of millions of pounds of unpaid debts as well as forcing their customers to take massive hikes in prices as they are switched to new suppliers.
Go To Energy went bust last month owing more than £2 million, while Ampower left £3.5 million in what has become a discredited sector with numerous companies collapsing as the price of energy soars. With the Government’s Ofgem enforced price cap in place most firms cannot break even and so are calling it a day in unprecedented numbers with Bulb Energy the latest on the brink of collapse.
This year the following energy firms have gone bust: Green Network Energy, Simplicity Energy, JUB Energy, Moneyplus Energy, PFP Energy, Utility Point, People’s Energy, Green, Avro, Enstroga, Igloo, Symbio, Colorado Energy, Pure planet, Daligas, GOTO Energy and Bluegreen Energy with around three million customers between them. It could well end up with the so-called Big Six companies left as the only ones still standing mainly due to their inherited wealth from the days of state ownership.
British Gas, EDF Energy, E. ON UK, npower, ScottishPower and SSE supply 70% of the market with a long list of smaller firms making up the rest. These smaller outfits are the companies going to the wall.
Ian Carrotte of ICSM said the situation had become unacceptable for businesses as manufacturing in particular uses massive amounts of energy which are fixed overheads. He said: “Take the average small factory such as a printing company who had switched to a low tariff with one of these smaller firms. Then the energy company goes bust – usually with hundreds of thousands of pounds in credit from their customers – leaving the factory with a hike in prices as they are switched to a new company – usually one of the big six – plus they have to wait for their credit balance to be restored. You need stability to run a factory so you can keep overheads under control – this energy crisis is a nightmare for business and could force many to cut staff and downsize.”
He also said that anyone supplying goods and services to any of the firms left outside of the Big Six should be very cautious. He said: “The media concentrate on the general public – the consumers – left in the lurch by these energy firm failures – which is understandable. But each one that goes bust, the staff lose their jobs and their suppliers are left with unpaid invoices to the tune of many thousands. Enough to sink a small company. There is enormous collateral damage.”
About ICSM Credit
ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.
For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.
To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com
For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk