Energy costs overtake rent for struggling bars and clubs

CLUBS and bars are now spending more on energy bills than they do on rent, industry bosses have warned, amid concerns the crisis could drive thousands of businesses to collapse.

Michael Kill, chief executive of the Night Time Industries Association (NTIA), said energy was now the single largest cost facing the sector, with many suppliers offering “untenable commercial terms”.

The Government has vowed to provide further support for households after Ofgem confirmed the energy price cap will jump 80pc to £3,549 from October. But businesses’ energy costs are not subject to a price cap, meaning many companies are facing increases to their bills of more than 300pc.

The Music Venue Trust said average energy bills for venues will surge to £5,179 per month, up from the current average of £1,245. It warned that around 30pc of UK music venues were now facing the threat of permanent closure.

Some businesses are even struggling to find a supplier willing to provide a new energy contract, meaning they may be forced to hand their keys back to the landlord.

Sacha Lord, the night-time economy adviser for Greater Manchester, said the UK’S cultural sector was “collapsing before our very eyes”.

“If we lose our night life – if we lose our pubs, theatres and entertainment – they aren’t going to come back,” he said.

Companies in the industry have discussed reducing opening hours, turning off the heating and asking customers to wear coats to events in an attempt to keep energy bills in check.

But Mr Kill at the NTIA warned that such measures were unsustainable, adding that venues were unable to pass on higher costs to customers because of the wider cost of living crisis.

Mr Lord added that the sector was in a worse position than during the pandemic as the Government had provided “no support whatsoever”.

Industry bosses have called on the new prime minister to reduce VAT from its current level of 20pc and to extend business rates relief to give companies a chance of survival. The warning comes after the pub and brewing sector also warned of mass closures.