One in six Yorkshire businesses planning to downsize as costs spiral

New research shows a significant number of businesses in Yorkshire and Lincolnshire are thinking of downsizing or shutting up shop as a result of rising costs.

The Federation of Small Businesses has released its Small Yorkshire, Humber and North East Business Index, which measures confidence among different companies.

It shows levels of optimism in the region are well below the national average.

The general economic conditions in the UK (49%), input costs such as cleaning and office supplies (41%) and utility costs, so gas and electricity costs (30%) are seen as the biggest barriers to growth over the coming twelve months.

In Yorkshire, the Humber & North East, 16% of businesses have said they intend to contract the business in the next twelve months (to downsize, sell or close). This has seen a slight rise from the third quarter of last year.

The so-called energy crisis is down to a number of factors - a reduction in the production of natural gas as well as an increase in demand.

Wholesale gas prices have reached record highs. But while homeowners are protected by the price cap - businesses don't benefit from the same protection.

A spokesperson for the Federation of Small Businesses said: “Small businesses lack the leverage to negotiate with energy suppliers that bigger businesses have, and they lack the protections that domestic consumers benefit from, so it is a perfect storm.”

Becky Stevenson, a Sheffield Business Consultant, said there is 'no support or funding' to help with energy costs.