15 January 2008 | Jake Kanter
Companies in the UK are spending too much on their energy and telecoms contracts, research has revealed.
The survey of more than 300 organisations by procurement consultants Utility Watch discovered that 39 per cent of businesses accept the existing terms of energy contracts after taking over new premises, and 58 per cent don't have the impetus to make comparisons with other suppliers.
Small and medium enterprises are the worse affected, often incurring costs on a leased property, with little opportunity for changing suppliers. The survey also showed the public sector fails to escape excessive charges, commonly accepting contracts that fall within their budget.
Lance Pearson, sales director of Utility Watch, told supplymanagement.com: "There's a lack of knowledge about utility contracts and businesses tend to go with 'name-brand' suppliers. Small and medium enterprises in particular don't give utility prices priority."
And although most companies do seek effective deals on telecoms, the study found many firms were not aware of extra connection charges, fixed rates and minimum call fees.
Gary Shepherd, director at Utility Watch, urged firms to adopt a more consumer approach to buying: "By adopting a similar 'shopping around' approach to the consumer sector, the savings for commercial organisations could be considerable. In many cases, savings can be in the region of 20 to 25 per cent."