Royal Bank of Scotland: Downturn deepens amid falling demand

  • Business Activity Index falls to 45.8 in October from 48.0 in September
  • Contraction in new orders quickens
  • Growth in employment further weakens

The contraction across Scotland’s private sector firms deepened during October, according to the latest Royal Bank of Scotland PMI® data. Adjusted for seasonality, the Business Activity Index posted below the neutral 50.0 threshold for the third month running, at 45.8, indicating a sharp decrease overall.

Inflows of new business also went into further decline, the latest downturn being the most severe in 20 months. To further add weakness across the sector, inflationary pressures reaccelerated from September’s recent low, as service providers reported quicker upturns in input costs and charges during October.

The gloomy performance resulted to the softest intake of workers in 18 months, with goods producers reporting their first reduction in employment since January 2021.

New business received at Scottish private sector firms fell sharply during October. The rate of decrease quickened from September to the fastest in the current fourth-month sequence of reduction.

Of the two sub-sectors, manufacturing firms reported the steeper downturn. Companies noted that looming recession, economic uncertainty and the cost of living crisis weighed on client activity.

The downturn in incoming new business across Scotland outpaced the UK-wide average.

Output expectations for the year ahead across private sector firms in Scotland strengthened in the three months to October. The increase in confidence was underpinned on planned expansions and investment, with firms also hopeful of future economic stability. That said, sentiment was relatively muted in context of historical data.

Business confidence across Scotland was broadly in line with that recorded for the UK as a whole.

Employment across the Scottish private sector expanded for the nineteenth month running in October. However, amid a cooldown in hiring activity at service providers, with goods producers reporting their first contraction since January 2021, the overall rate of growth ticked down to the joint-lowest in the aforementioned series.

The rate of job creation across Scotland remained softer than that seen at the UK level, which similarly also slowed in October.

October’s survey showed a sustained fall in levels of outstanding business across Scotland’s private sector. The respective seasonally adjusted index posted below the neutral 50 threshold for the fifth consecutive month, the latest reading signalling the fastest depletion in work outstanding since January 2021. As per surveyed businesses, declines in new orders allowed firms to work through previous backlogs.

The rate of contraction in Scotland was the third-fastest across the UK, ahead of Northern Ireland and Wales.

October data signalled a robust rise in input costs across Scotland’s private sector, thereby extending the run of inflation to 29 months. Adjusted for seasonality, the latest reading increased from September’s 13-month low as a result of a reacceleration in input price inflation reported at service firms. The uptick in average costs was attributed to higher wages and utilities, cost of living crisis and general inflation adding strain on costs.

Despite being severe, the pace of input price inflation was however, softer than the UK average.

In line with the upturn in average cost burdens, charge levied by Scottish private sector firms also inclined from September’s recent low at a quickened rate during October.

The rate of charge inflation across Scotland posted weaker than the UK-wide average which slowed during October.

Source: Royal Bank of Scotland, S&P Global.

Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, commented: “The Scottish private sector reported a third month of contraction during October. The downturn in activity quickened on the month, as stubbornly high inflationary pressures, the ongoing cost of living crisis and a threat of recession deterred growth. New orders received at firms also fell further.

“Employment trends across the sector indicated a slowdown in hiring activity over the recent months. The latest upturn was the joint-softest in the current 19-month sequence of expansion. At the same time, the level of outstanding business also fell at a much sharper rate. The data thus suggesting the further weakness in the labour market will not be surprising.

“As we proceed into the final quarter of the year, market conditions are set to become more challenging. The aggressive interest rate hikes, the decline in the value of sterling against the dollar and the rebound in post-COVID demand phasing out, all amidst the ongoing cost of living and energy crises, all point to an extremely difficult period for Scotland.”  

Book Week Scotland shares stories from vibrant Scottish communities

Book Week Scotland kicks off today (Monday 14 November) with a line-up themed around ‘Scotland’s Stories’, as part of Scotland’s Year of Stories 2022.

Scottish Book Trust, the national charity changing lives through reading and writing, has worked closely with writers and partners to put together an exciting week packed full of online and in-person events and activities.

Book Week Scotland is the country’s biggest celebration of books and reading and this year the public are invited to vote on their favourite animal from fiction – voting will close at midnight tonight, with the winner to be revealed during the week!

Continuing the animal theme, one lucky pet-owner will win a special illustration of their pet by top illustrator Esther Kent through a #BookWeekScotlandPets competition on social media.

Events throughout the week include an evening with Sally Magnusson sharing stories from four vibrant Scottish communities, and Book Shriek Scotland – a celebration of Scotland’s folklore presented by Kirsty Logan and Heather Parry, featuring storytellers and writers including Garth Marenghi.

Scottish Book Trust are also asking people to share what they’re reading this Book Week Scotland on the Reading Map of Scotland.

A new book, Scotland’s Stories, has been released today by Scottish Book Trust, featuring true stories from people across Scotland as well as exclusive contributions from published writers Angus Peter Campbell, Raman Mundair, Graeme Armstrong and Helen Fields.

70,000 copies of the book will be given out for free this week in libraries and community spaces. Digital copies, including an audio version, are also available.

From icons of literature to local tales, Scotland’s Year of Stories encourages locals and visitors to experience a diversity of voices, take part in events and explore the places, people and cultures connected to all forms of our stories, past and present.

Book Week Scotland programme highlights:

  • Scotland’s Stories: Tales from the People of Scotland with Sally Magnusson – Monday 14 November, 7pm at Glasgow Film Theatre and livestreamed online. Join Sally Magnusson to celebrate the real-life stories told by people from four vibrant communities across Scotland. The wonderful pieces in this event have been generously shared by people from the Garnock Valley, Port Glasgow and Greenock, Lochgelly and the South Islands of the Western Isles. Each story was shared by a member of the public as part of Community Campfires, supported by Scotland’s Year of Stories 2022.
  • Book Shriek Scotland is a celebration of Scotland’s spooky folklore – and some from further afield. This is an online event premiering today, Monday 14 November, in which award-winning authors Heather Parry and Kirsty Logan present an anthology of folk tales told by storytellers and writers, including Garth Marenghi, Amanda Thomson, Ailsa Dixon, John Lees and Anna Cheung. We’ll be inviting people to send us folk tales from their hometowns on social media after the event.
  • The Hidden Case of Ewan Forbes with Professor Zoë Playdon – Monday 14 November, 7–8.30pm at the Sir Duncan Rice Library (University of Aberdeen). Academic and activist Zoë Playdon will talk about her book The Hidden Case of Ewan Forbes – a true local story with international resonance – and the extraordinary court case that took place in the 1960s.
  • Story Café with Alasdair Gray – Tuesday 15 November, 6–7.30pm at Central Library, Dundee. Join us to discuss the short fiction of one of our finest writers, Alasdair Gray – author of Lanark. Spanning satire, dreams of possibility, and dystopian futures, and with diverse influences from Maupassant to Chekhov, the stories display rich imagination and a storyteller’s artistry.
  • Treasure Your History; History: Your Treasure – Wednesday 16 November,  2–3pm at Edinburgh Central Library. Librarian Iain Duffus twill show some of the rare gems the library holds (like the first Bible printed in Edinburgh, and early editions of Burns) in this specially arranged visit during which there will be the chance to explore the awesome book stacks, see some of Scotland’s first newspapers from the eighteenth century, and browse selected local items laid out to enjoy.
  • Author talk: Maggie O’Farrell – Wednesday 16 November, 7.30–8.30pm at Biggar Library. Maggie O’Farrell, prize-winning author of Hamnet and The Vanishing Act of Esme Lennox, will be coming along to Biggar Library to talk about her work.
  • Author talk: Stuart MacBride – Thursday 17 November, 7.30–8.30pm at Loch Leven Community Library. Number one Sunday Times bestselling crime writer Stuart MacBride will talk all things crime and share his latest book, No Less The Devil.

Explore the full Book Week Scotland programme on the Scottish Book Trust website.

Marc Lambert, CEO of Scottish Book Trust, said: ‘Book Week Scotland is a special time of year, where people across Scotland can come together to celebrate and experience the magic of books and reading.

“The 2022 programme features a mix of fun, spooky, inspiring and unusual events and activities. This year’s Book Week Scotland forms part of Scotland’s Year of Stories 2022, celebrating Scotland’s rich culture of telling stories. We hope you’ll be able to join in with a Book Week Scotland event in your community, or one of the many ways to take part online.’

Sally Magnusson, broadcaster and writer, said: ‘I am delighted to be hosting ‘Scotland’s Stories: Tales from the People of Scotland’ during Book Week Scotland because this special event celebrates the stories that remind us who we are, that connect us to our families and our communities and that enable us to share the challenges and the joys of life with one another.

“Showcasing the extraordinary stories from ordinary people at the Glasgow Film Theatre is a great way to round off Scotland’s Year of Stories 2022.’

Alan Bett, Head of Literature and Publishing at Creative Scotland, said: ‘Book Week Scotland is upon us with an imaginative and inspiring programme to excite, intrigue and surprise.

‘This high-profile national focus on literature brings readers together to engage with stories and meet their favourite authors.

‘In particular this year’s connection with the Year of Stories allows our folklore and rich heritage to be viewed and enjoyed through contemporary voices.’

Pamela Tulloch, Chief Executive of the Scottish Library & Information Council (SLIC), said: ‘Book Week Scotland is a terrific opportunity to celebrate everything that is great about books, reading and bringing together people, families, and communities to explore and revel in the power of words and shared stories. Libraries across Scotland have great programmes lined up during Book Week Scotland.

‘Research shows that reading for just six minutes a day can reduce stress levels by up to 68 per cent in people of all ages, and with our libraries across Scotland filled with an abundance of free reading materials – whatever your interests and ability – we hope people will take the opportunity to use Book Week Scotland to start or get back to enjoying books and at the same time rediscover the enchanting world of the many brilliant libraries right on their doorstep.’

Neil Gray MSP, Minister for Culture, said: ‘Book Week Scotland’s theme around Scotland’s Year of Stories continues our celebration of innovative and ground-breaking forms of storytelling. This has been a bumper year for new and untold stories from people in communities across Scotland.

‘There has never been a better time to enjoy a good story and this week’s events will also highlight the wealth of emerging and forward-looking writing and storytelling talent we have on our doorsteps.’

Aberlour Children’s Charity seeks urgent assistance as fund for disadvantaged families runs out 

·        Aberlour Children’s Charity is launching a new national ‘Poverty Relief Appeal’ on Monday, 14th November to secure donations for its Urgent Assistance Fund 

·        The Fund, which provides cash for essentials such as food, bedding, clothing and heating, is currently closed to new applications due to extreme demand during the cost-of-living crisis

·        In the last eighteen months, the Fund has awarded over £1M to struggling families in Central Scotland – the most of any Scottish region

Aberlour Children’s Charity, one of the largest Scottish children’s charities, is launching a new national fundraising drive to secure critical donations for its Urgent Assistance Fund, which provides vital financial support to the most disadvantaged families in Central Scotland.  

Following the Covid-19 pandemic and amid the cost-of-living crisis, the charity has had to close the Fund, which delivers cash grants, typically within 48 hours, for essentials such as food, clothing, and energy costs, to new applications. 

Over 12,000 people across Scotland have received grants from Aberlour worth £1.44 million since April 2021.   

In the Central Belt*, 2,862 grants have been made since April 2021, supporting 9,377 individuals. The average grant value awarded is £373.36, and the most requested item that families are seeking to buy with grants from the Urgent Assistance Fund in the region is clothing, followed by food, bedding and then money towards utility bills.

Aberlour’s new Poverty Relief Appeal launches today – Monday, 14th November – across national TV, radio, press and digital.

The TV advert follows seven-year-old ‘Emma’ whose normal family life is turned upside down as they struggle to cope with the financial pressures of the cost-of-living crisis. We see an empty wall where a radiator once stood followed by an empty plate once filled with nutritious food, and, eventually, Emma looks into a bedroom with no bed as she prepares for another night sleeping on the floor.  

SallyAnn Kelly, Chief Executive at Aberlour Children’s Charity, said: “This is one of the most challenging periods families have faced in decades and Scotland’s poorest children face a dark, cold winter. 

“The worst-off families in our communities can simply no longer afford to put the lights on, heat their homes, put food on the table, or buy basic necessities for their children such as a bed or bedding.  

“Every penny donated to Aberlour goes directly to families and our Urgent Assistance Fund has been a vital means to many. However, the reality is that we are only able to help one out of four existing applications and, unfortunately, the Fund is now closed to new applications until we can secure more donations.

“Christmas is a time when families struggle more than any other. As the cost-of-living increases daily, the impact could be devastating, and we are asking anyone that is in a position to contribute – however big or small the amount – to donate via our website to support those in need.”

Chloe Taylor, support worker for Aberlour based in Glasgow, added: “We work daily with families who have always lived normal lives but sadly the impact of the Covid-19 pandemic and the cost of living crisis has created extreme stress in the household.

“When there are so many families looking for support, it can be very easy to be forgotten, so initiatives and financial support such as the Urgent Assistance Fund are absolutely vital for struggling families in the Central Belt.”

Aberlour’s Urgent Assistance Fund can provide immediate relief to families with children (aged 21 and under) who are suffering extreme hardship.

Money is paid straight to families who apply via a sponsor (health professional, social worker, teacher, third sector organisation, clergy or other professional). 

Donations to Aberlour’s Urgent Assistance Fund via:

www.aberlour.org.uk/povertyrelief 

Information on the Urgent Assistance Fund: www.aberlour.org.uk/get-help/urgent-assistance-fund

First Minister leads tributes to the fallen on Remembrance Sunday

First Minister Nicola Sturgeon joined Rt Hon Lord Provost of the City of Edinburgh Robert Aldridge, as well as veterans, and military personnel to pay tribute to the fallen on Remembrance Sunday.

Hundreds gathered on the Royal Mile near the Stone of Remembrance at the City Chambers to remember all those who gave their lives in conflicts over the years.

The RAF Central Scotland Pipes and Drums led a parade from Edinburgh Castle to the City Chambers, followed by the Band of the Royal Regiment of Scotland, veterans, and representatives from the three Armed Services.

Following the firing of the One O’Clock Gun from Edinburgh Castle at 11am, they joined people across the country in falling silent for two minutes of reflection.

After a short ceremony, wreaths were laid at the Stone of Remembrance by the First Minister, the Lord Provost, Baroness Goldie, Minister of State for Defence, Chiefs of all three Armed Services, veterans associations and others. This was followed by a service of remembrance at St Giles Cathedral.

Ms Sturgeon said: “Remembrance Sunday honours the memory of those who made the ultimate sacrifice to protect our way of life. It also gives us the opportunity to mark the service and sacrifice our veterans and those still serving in our Armed Forces community have made, and continue to make, to defend our freedoms.

“At this time of year, many families in Scotland come together to remember their loved ones and it is an opportunity for everyone to pause, reflect and be thankful. We remember them with pride. They will never be forgotten.”

Dr Claire Armstrong, Chief Executive of Legion Scotland, said: “From the First World War to more recent conflicts, it is vital that we do not forget those who paid the ultimate price for our freedom.

“Today is a chance to come together and remember all the servicemen and women who gave their lives over the years, as well as those who returned with physical or mental scars.

“As we recognise the extraordinary sacrifices our Armed Forces community continue to make, it is also a chance to express our hopes for a peaceful future.”

Further commemorations took place around Scotland, including services at Glasgow Garden of Remembrance at George Square, and other locations.

Entries are now open for The MoonWalk Scotland 2023

Raise money for those living with breast and other cancers

On Saturday 9th September 2023, thousands of women and men will set off from Holyrood Park in Edinburgh to walk an overnight half or full marathon through the streets of the capital.

Walkers will be uniting to raise much needed awareness and money, which is granted towards research, prevention and supporting those living with cancer in Scotland.

Walkers can pick any theme from previous years to decorate their bra and add a sprinkle of silver.

Organised by breast cancer charity Walk the Walk, The MoonWalk Scotland will be the final event in the charity’s trilogy of MoonWalks in 2023, following The MoonWalk London, at Clapham Common on Saturday 20th May and The MoonWalk Iceland, at Lake Myvatn on Tuesday 13th June.

For all the events, Walkers can choose between half and full marathons, as well as a virtual option to take on the MoonWalk in their local area.

Those looking to experience Scotland and London can enter both and receive a special 10% discount on entry.

For the ultimate challenge take on the 3 Land Challenge and do all three MoonWalks!

Sign up for The MoonWalk Scotland now at www.walkthewalk.org

Celebrating 25 years of MoonWalking!

Money raised by Walk the Walk through its MoonWalks is granted to help other charities and organisations across Scotland and the UK in their united aims.

The one and only iconic, original night-time walk – The MoonWalk London – was created in 1998 by Nina Barough CBE and celebrates 25 years of MoonWalking.

MoonWalks in Scotland (2006) and Iceland (2011) followed. All three MoonWalks are organised by the cancer charity Walk the Walk, founded by Nina.

Foysol Choudhury MSP urges constituents struggling with energy bills to seek help

Local MSP Foysol Choudhury has urged residents in the Lothian region struggling with their energy bills to seek support amid the growing cost-of-living crisis. 

Foysol Choudhury MSP joined Advice Direct Scotland at a parliamentary reception in Holyrood to discuss the charity’s free, practical advice available to constituents who may be worried about money. 

The event, on November 3rd, gave politicians a chance to speak to Advice Direct Scotland about its energyadvice.scot service. 

They offer advice and support for understanding energy bills, issues with meters, complaints and disputes and switching suppliers.  

Staff from Advice Direct Scotland also discussed their moneyadvice.scot service which provides free information and support on a wide range of debt-related issues. 

Specialist debt and money advisers can work with people to assess their current situation, look at their income and outgoings, and consider what to do next, including a full range of free end-to-end debt solutions. 

It comes after the Energy Price Guarantee kicked in from October 1st, setting the cap at £2,500 a year for an average household. 

Households have also started to receive the first instalments of the £400 Energy Bill Support Scheme in their October electricity bill, which will be applied monthly in six instalments until March 2023. 

Those on traditional prepayment meters will receive vouchers by post. 

Advice Direct Scotland has urged consumers to stay alerts to scams and fraudulent messages as they do not have to apply for the schemes. 

The charity also encourages household to check their benefits entitlement, through its calculator at www.advice.scot, to ensure they are not missing out on key support. 

Foysol Choudhury, a Labour list MSP for the Lothian region, said: “It was great to learn more about Advice Direct Scotland’s service and how they can provide free, practical, and impartial advice on a range of issues including debt, energy bills and consumer rights.  

“These are issues which many of my constituents are unfortunately facing during this cost-of-living crisis. 

“I know that households across Lothian and Scotland are struggling and worried about the coming winter months, especially with the rise in energy prices. 

“Please be assured that we are here to support and assist you wherever possible. 

“I would urge you to use Advice Direct Scotland’s resources and to reach out to your local representatives if you need further help.” 

Andrew Bartlett, chief executive of Advice Direct Scotland, said: “It was encouraging to see so many MSPs keen to find out how they can support households through the cost-of-living crisis and difficult winter ahead. 

“With the recent rise in energy prices, and more on the horizon, we know that many households are facing financial difficulties. 

“Right now, we have qualified advisers ready to provide free, practical support to anyone in Scotland through the energyadvice.scot service – and we can also help any customers having difficulties reaching their supplier. 

“Anyone with debt worries should speak to our advisers at moneyadvice.scot for possible solutions, and it’s vital that everyone checks they are receiving their full entitlement to benefits by using our calculator at www.advice.scot.” 

Work completes on giant mural at Glasgow Royal Infirmary

Latest addition to Glasgow’s Mural Trail shines a light on health inequalities 

A new mural has been officially unveiled at the Princess Royal Maternity Hospital at Glasgow Royal Infirmary, adding to Glasgow’s growing mural trail and raising awareness of health inequalities which exist in Scotland.

The Black mother and baby mural was developed in partnership between NHS Greater Glasgow and Clyde  (NHSGGC) and local campaigner, Rachel Dallas. The mural marks NHSGGC’s own commitment to tackling health inequalities in maternal health and baby outcomes in the UK.

The 20 x 30ft design can be seen above the main entrance to the maternity unit on Wishart Street and features the image of a real mother and baby from the local community.

It comes following research which reveals significant racial disparity in maternal care and baby outcomes within Black and ethnic minority groups across the country. A number of partnership groups within NHSGGC are helping to drive forward and further reduce inequalities by promoting diversity in all areas of healthcare, including public health and staff messaging.

Jackie Sands, senior arts and health lead at NHSGGC, said: “Art plays a powerful role in helping raise awareness of major issues in captivating and thought provoking ways.

“The Black mother and baby mural unveiled today will feature in the landscape of Glasgow for years to come, shining a light on, and reminding people of the continued drive to reduce health inequalities – particularly for Black women and babies.

“NHSGGC is delighted to play host to such a mural and to play a part in helping reduce some of those inequalities which do exist.

“A huge thanks to Artisan Artworks for painting the mural and to Rachel Dallas for joint fundraising to make the mural possible.” 

Campaigner, Rachel Dallas, said: “This mural is a tribute to the women behind the statistics on racial disparities in maternal health.

“As a mixed Black woman living in Glasgow, I hope it reminds all who enter the hospital (staff, patients, and visitors) of the right to equality of both health care and health outcomes, as well as providing a beautiful representation of the strength and resilience of motherhood.”
                                               
Frank Carty of Artisan Artworks, added: “I am honoured have been involved in painting this mural which it is hoped will highlight inequality in maternal care for Black mothers.

“The image should also be very welcoming and maternal to all visitors to the maternity Hospital, and I’m hoping it will provide a really positive focus for that part of the hospital.”

A Basic Income for Scotland event

BASIC Income Network Scotland are launching a campaign centring Basic Income within discussions for Scotland’s future, starting with an event on Tuesday 29th November.

Join us at the Wee Red Bar in Edinburgh for an evening of speakers, dynamic discussion, and live music.

👇

https://bit.ly/3FVT8iS

👇

Glenigan Construction Index: Project start decline bottoms out

  • Underlying project-starts remain depressed, 17% down on the preceding three months, 13% lower than in 2021.
  • Residential (-21%), non-residential, (-13%) and civils (-13%) all fall against the preceding three months.
  • Northern Ireland (+16%) and Scotland (+19%) post strong results during November Index period

Glenigan, one of the construction sector’s leading insight experts releases the November 2022 edition of its Construction Index.

The Index focuses on the three months to the end of October 2022, covering all underlying projects with a total value of £100m or less (unless otherwise indicated), with all figures seasonally adjusted.

The key takeaway from November’s Index is the gradual levelling out of project-start decline, which has characterised the Index since May 2022.

However, whilst performance has stabilised, overall underlying project-starts remain at a low ebb, 17% lower than the previous three months to October, and 13% down on the same period last year.

According to Glenigan’s Senior Economist, Rhys Gadsby, “It’s encouraging to see a fall in project starts has slowed during the period covered by this Index, however, optimism should be cautious.

“Our recent Forecast, released last week, indicated some gale-force headwinds going into 2023, so we shouldn’t expect this performance plateau to be the harbinger of full recovery, at least in the short term.

“Geopolitical disruption, an uncertain domestic economy and a government finding its feet have dented market confidence. Despite the much-needed market assurance expected from the Chancellor’s Statement on 17th November 2022, it’s unlikely it will provide an immediate boost in activity.”

November 22 Index Graph.jpg

Sector Analysis – Residential

Decline was consistent across the board, with project-starts falling 21% against the preceding three months to stand 10% lower than 2021 levels.

Despite social housing faring slightly better compared to other verticals covered in the Index (-7% against the previous three months), the value still dipped 26% against last year.

In contrast, private housing-starts tumbled 24% on the previous three months whilst only falling 6% compared to 2021.

Sector Analysis – Non-Residential

The downward trend continues in the non-residential verticals. However, office project-starts were an exception, remaining largely unchanged on a year ago and were up an impressive 11% on the three months preceding October. Whilst industrial starts were up 4% on the previous three months, they slipped 15% behind 2021 levels.

Hotel and leisure starts fell 19% against the preceding three months, experiencing a massive 38% decline against last year. Education (-24%) and health (-41%) work starting on site also declined against the previous three months, respectively standing 28% and 31% lower than a year ago.

Civils project starts slipped back 13% against the previous three months but remained stable compared to 2021 figures.

Regional Analysis

Similar to other Glenigan Indexes published in 2022, Northern Ireland project-starts saw another performance uptick, rising 16% on the previous three months and up by a massive 35% on a year ago.

Scotland also experienced a strong period, with on-site starts up 19% on the last three months and 10% higher than 2021.

Project-start performance was less consistent in other regions. Whilst Wales witnessed a 25% boost against the preceding year, figures were 5% down on the previous three months. The North West remained largely unchanged on the last three months and a modest 2% down on 2021.

All other regions registered decline during the November Index period, and compared to last year. Project-starts in London and Yorkshire & The Humber both experienced steep falls (-35%) against 2021 levels.

For more information about the Glenigan Index and its other publications and services click here.

PAC: Ofgem failures “come at considerable cost to energy billpayers”

“Problems in the energy supply market were apparent in 2018 – years before the unprecedented spike in prices that sparked the current crisis, and Ofgem was too slow to act.“

In a report published today Westminster’s Public Accounts Committee calls on the Department for Business, Energy and Industrial Strategy and Ofgem to say how they will make “the energy retail market work in the best interests of customers during the transition to net zero” after finding that failures at the energy regulator have come “at a considerable cost to billpayers”.

Since July 2021, 29 energy suppliers have failed, affecting around 4 million households. Customers have been left to pay the £2.7 billion cost of supplier failures. This means an extra £94 per household, a cost that will very likely increase.

The Committee found that this was due to “Ofgem’s failure to effectively regulate the energy supplier market”. 

Ofgem “did not strike the right balance between promoting competition in the energy suppliers market and ensuring energy suppliers were financially resilient”. 

Despite problems with the financial resilience of energy retailers emerging in 2018 Ofgem did not tighten requirements for new suppliers until 2019, and for existing suppliers until 2021. By this point wholesale gas and electricity prices increased to unprecedented levels. 

The price cap “is providing only very limited protection to households from increases in the wholesale price of energy”, and Ofgem expects prices could “get significantly worse through 2023”. The Committee says BEIS and Ofgem should “review the costs and benefits of the price cap from a consumer’s perspective” to inform decisions about the future of energy price controls.

The position of vulnerable customers, who already pay higher energy prices, is “unacceptable”.  

Dame Meg Hillier MP, Chair of the Public Accounts Committee, said: “ “It is true that global factors caused the unprecedented gas and electricity prices that have caused so many energy supplier failures over the last year, at such terrible cost to households. But the fact remains that we have regulators to set the framework to shore us up for the bad times.  

“Problems in the energy supply market were apparent in 2018 – years before the unprecedented spike in prices that sparked the current crisis, and Ofgem was too slow to act.

“Households will pay dear, with the cost of bailouts added to record and rising bills. The PAC wants to see a plan, within six months, for how Government and Ofgem will put customers’ interests at the heart of a reformed energy market, driving the transition to Net Zero.”