Sector warns of unprecedented energy price hikes

Leaders from across the creative industries are raising the alarm over the potential impact of rising gas and electricity bills.

In the wake of rising energy prices and the absence of a commercial energy price cap, leaders of arts buildings and venues are reporting record bill increases, with hospitality operators saying they are set to face average bill increases in excess of 300%.

There are cross-sector concerns that the rising energy prices could force shortened opening hours or closures unless they receive government support.

READ MORE:

An open letter to the government signed by five organisations representing the hospitality sector, including the Music Venue Trust (MVT) and Night-Time Industries Association (NTIA), states that “rocketing energy prices have become a matter of existential emergency”.

They warn that music venues and nightclubs, alongside pubs, restaurants and hotels, are already reducing the hours they open their doors due to prohibitive trading conditions, with some confronted with the threat of permanent closure.

The letter says it “increasingly clear a significant number of energy providers have withdrawn service provision from the hospitality market,” and added that there is “unequivocal evidence” the primary purpose of a free market for energy supply to business is failing the sector.

MVT CEO Mark Davyd said government must act to “create a genuinely functioning market for energy services that can deliver supply at a reasonable cost or step in to create an affordable supply for businesses".

According to figures from the MVT, the Grassroots Music Venue sector is facing a potential additional £90m a year in energy costs.

“After two incredibly difficult years where venues have had to fight for simple survival, it would be an extraordinary outcome to see them closed and permanently lost because of an energy market that is completely out of control and not fit for purpose,” Davyd added.

Arts buildings feel the pinch

The concerns raised by the hospitality sector have been echoed by leaders in theatres and arts centre.

Salford theatre and gallery complex The Lowry expects its electricity bill for 2022/23 to increase threefold, to a level “substantially higher” than its £860,000 annual Arts Council grant.

Lowry Chief Executive Julia Fawcett said the organisation is committed to reducing its energy consumption, adding the “major challenge” it is facing will be felt across the sector.

Theatre Royal Bury St Edmund’s Artistic Director Owen Calvert-Lyons said the theatre’s new electricity tariff increased by £47,000, with another increase expected in gas bills.

“Theatres across the country are going to start to close if we don’t get some help from our government soon,” he wrote on Twitter.

Z-arts Chief Executive and Artistic Director Liz O’Neill said their gas and electric bills are forecast to go up by almost £100,000 compared to pre-pandemic levels, a 600% increase and equivalent to 10% of total turnover.

She told ArtsProfessional the arts centre is in a fortunate position this year, as it has a reasonable level of reserves, but added they are still considering reduced hours and closing some days.

“We certainly can’t sustain this level of increase beyond one year. [Our] 2023/24 budgets are already seriously challenging, and if these energy costs continue it could further threaten activity delivery, and in the long-term even our existence.”

“I imagine many venues are facing these threats even now. The cultural sector is in a critical situation as we try and rebuild after the pandemic.”

Z-arts is the only dedicated Manchester arts centre for children and families and runs free after-school, weekend and holiday arts activities for many children who face considerable hardship and multiple levels of depravation. O’Neill says she expects demand for their services to increase through the winter as families try to save for energy bills.

“So the onus on us to continue to deliver a warm, safe, creative environment for children and families at this time of need, is even greater.”

“The very least the government needs to do is provide financial support to charities who run public buildings straight away, whilst finding a longer term solution to make sure we’re not in this position in coming years.”