A Leyland businessman fears for the future of his firm and say he can no longer take on 20 apprentices after being blind-sided by a Government decision.
John Moriarty fits free cavity wall and loft insulation at low-income homes in Leyland and surrounding area, but worries he may have to start letting staff go or call it a day all together after a change in the way large power companies are operating.
His firm, EH Energy Ltd, based in Heaton Street, Leyland, is paid by large energy companies for fitting the insulation, as the work helps the firms meet Government carbon emission savings targets.
But after the Government announced an extension on the Energy Company Obligation (ECO), Mr Moriarty says the large firms are now ‘refusing’ to pay him for the work his business does in Leyland.
He said: “When we do insulation in a property, we work out how much carbon is saved, and we sell that ‘saving’ to the energy companies.
“But they’re now point-blank refusing to pay for it, because of this extension from the government.
“We had just advertised to take on 20 apprentices in the area, and around 50 young people applied for the scheme.
“Now that’s on hold, and I’m worried we might even go bankrupt because of this.
“I’ve heard of other smaller firms going into receivership over this recently, and it really worries me.”
Mr Moriarty said the Leyland firm, which has been operating for two years and employs 15 people, is now £134,000 out of pocket.
“If this carries on, we will go bankrupt,” he said. “It’s a disgusting situation.”
He didn’t wish to reveal which companies he’s been working with, but national reports have explained how British Gas has temporarily stopped taking applications for free boilers because the Energy Company Obligation (ECO) has been extended to 2017.
Energy firms like British Gas must help customers on low incomes and in ‘hard to heat’ homes with measures such as insulation, new boilers and double glazing.
But it says it has now met the government’s ECO a year early, so has put one of its energy saving programmes on hold.
A spokesman for the Department of Energy and Climate Change said it was up to British Gas how it implemented the scheme.
Mr Moriarty, who lives in Clayton-le-Woods, said: “Because they’ve hit their targets for this year, they’re saying that they’ll just start again [with the free installations] in January, but by that time, businesses like ours will be gone by then.
“We could go down the route of charging homeowners for the work, but you’re looking at about £1,200 for each property, and people won’t pay that, especially when they know that their neighbours or family and friends have been getting it done for free all this time.
“Also, we work with a lot of people on benefits, so there’s no way they can afford that.
“They desperately need to reduce their energy bills though. It’s not so bad in summer, but it will get worse in winter.”
He added: “We’ve had to shelve the apprentice scheme, which I’m really disappointed about.
“We were planning on starting that in August, and I’m hopeful that if we get through this, we will be able to do it in the future, but this has just pushed everything back.
“I was looking forward to giving these young people a chance and it’s a crying shame that it won’t happen now.
“I just didn’t see this coming.”
Mr Moriarty has written to South Ribble MP Lorraine Fullbrook for advice, and she has written to the Secretary of State for Energy and Climate Change, Edward Davey, about the issue.