The North East mayor is poised to launch a new project aimed at slashing energy bills for hundreds of small businesses, writes Local Democracy Reporter, Daniel Holland.
A £2.8 million programme to help small and medium-sized enterprises (SMEs) cut their energy costs is expected to launch later this year.
The scheme will provide businesses with expert advice, energy audits, and funding to install efficiency measures that will reduce their energy usage.
Plans for the support project were drawn up before the war in Iran, which has sparked a surge in fuel prices, and the North East Combined Authority says that it expects demand for the programme could now be greater than anticipated.
There has been particular concern for businesses who rely on heating oil to warm their properties.
The Federation of Small Businesses (FSB) has estimated that 7% of SMEs use heating oil, rising to 17% in rural areas like Northumberland.
Mayor Kim McGuinness said: “We’re pulling together ambitious plans to support families right across the region. From energy bills to security, the UK must stand on its own two feet and the North East has a huge role to play in that.”
The North East Combined Authority’s SME Energy Savings Programme will run up to the end of March 2029.
It will include a £1 million grant fund open to businesses for the installation of energy efficiency improvements, with applicants expected to match the money they are offered from the mayor’s office.
A further £750,000 will be spent procuring a firm to deliver an advice service and carry out energy audits, which will be open to SMEs and voluntary organisations.
It is hoped that the scheme will provide grant funding to 300 businesses, non-financial support to a further 420, safeguard 279 jobs, and save more than 2,000 tonnes of CO2.
A report from the mayor’s office states: “This programme was developed before the beginning of the Iran conflict. This, and any other factors that cause higher energy prices, increase the importance of helping SMEs to reduce energy costs.
“Demand for the programme could be higher than anticipated because of global events, and therefore the North East CA will keep a watching brief on the situation. The programme will be managed to ensure that the available support and funding is allocated across the three-year period of the project and not issued disproportionately during periods of peak demand.”
It added that businesses in Northumberland, North Tyneside, Newcastle and Gateshead that received a grant via the Government-backed Business Energy Savings Team (BEST) to install energy efficiency measures saved over £6,700 on their annual energy bills on average.
The report said: “This is a significant saving when compared to the median average profit for SMEs in the UK (2024) of £70,000, potentially increasing profitability by 9.5%. The savings are more significant for UK SMEs with 1-9 employees who have a median average profit of £24,000, potentially increasing profitability for this group by 28%.
“Figures released by the Sage small business tracker show that between Q3 2024 and Q3 2025, the North East had the third smallest growth in average profitability of all UK regions.”
Daniel Holland
Reporter for the Local Democracy Reporter Service.
South West Durham News covering news across County Durham.
