Rising energy prices for laundries could cause massive problems for whole UK economy
In an open letter to the new Prime Minister, the Textile Services Association (TSA) has called on Liz Truss to urgently consider immediate measures to help the commercial laundry industry as part of the emergency budget to deal with the crisis being caused by rising energy costs.
The commercial laundry sector plays a key role in the UK economy but one that was overlooked during the Covid-19 pandemic by the government and denied assistance because it falls between the definitions of various primary and secondary sectors.
The TSA recently surveyed its members asking them about the kind of changes in energy prices they are seeing. All responding companies reported significant increases, with rises of anything from 300% to 1500% being forecast over the coming months.
“Without laundries, sectors like hospitality, healthcare and many others wouldn’t be able to operate,” says David Stevens, CEO of the TSA. “At the start of the year, energy costs represented 10% of a commercial laundry’s overheads but we are looking at increases of several orders of magnitude of that.”
The TSA is concerned that without decisive action there is a risk of companies going out of business, which could have cascading effects as sectors that rely on laundry services are unable to access them. “The increased costs would have to be passed on to customers, and at that level it would generate inflationary pressures,” says Stevens. “Laundry tends to be a business that works behind the scenes, so most people don’t realise we’re there. Without laundry, hospitality would have to shut down within a day. The healthcare sector would last two days. The damage that would be caused by not supporting the laundry industry would be catastrophic for the UKPLC as a whole.”
The TSA is calling on the new government to put measures in place that supports the industry as it is an energy intensive user. The proposed measures include rate relief, low interest long term loans, qualification for grants previously denied the industry, along with subsidised energy costs and the introduction of an industrial energy cap.
“We are doing what we can to help our members reduce their costs, but with price increases this large it will make little actual difference,” says David. “We urge the new Prime Minister to take swift action to ensure that laundries aren’t forgotten during this crisis.”
The TSA is the trade association for the textile care services industry. The TSA represents commercial laundry and textile rental businesses. Membership ranges from family-run operations through to large, multi-national companies. Visit www.tsa-uk.org for more information.
5th September 2022
Dear Prime Minister,
Commercial laundries play a central role in enabling our NHS to provide sterile surgical procedures and keeping hospitality and manufacturing industries open for business. There is no primary/secondary sector that will not be critically impacted in two days if commercial laundries cannot survive this energy crisis. Back in January we wrote to your predecessor explaining the importance of the commercial laundry. We asked, on behalf of our members, for him to provide support for a sector that is vital for the continued survival of UKPLC. We received no response.
The TSA recently surveyed its members about the changes to energy costs they are facing. The response showed that the majority are looking at increases from 300% up to 1500%. This is unsustainable and will doubtless lead to many going out of business if swift action isn’t taken.
The implications of this go far beyond the laundry industry alone. Commercial laundry is a load-bearing part of so many sectors from NHS to hospitality to food manufacturing. 90% of healthcare laundry is outsourced to our members, and the hospitality industry is largely dependent on commercial laundries.
None of TSA’s advice is getting close enough to the extent of measures needed in this situation, but with bills set to rise by an order of magnitude, businesses simply cannot survive without significant support!
We call on you to not make the same mistakes of the previous government and ensure that the commercial laundry sector is included in any government support package developed to support energy-intensive users. As laundry falls between the strict definitions of primary and secondary sectors we have thus far missed out. Without remedies like rate relief, grant funding, long-term low-interest energy loans, subsidised energy costs, and an industrial energy cap, the UK risks losing companies that are vital to many other primary and secondary sectors. We also need assurances that if rationing is to be introduced, commercial laundry retains its status as an essential user.
Yours,
David Stevens CEO of the Textile Services Association