Scottish Gas owner Centrica freezes pay but engineers continue with essential home visits

Scottish Gas owner Centrica is looking to slash costs by as much as £400 million including a pay freeze for non-customer facing staff as it braces for a hit from plunging business energy demand amid the Covid-19 lockdown.
Centrica, the owner of Scottish Gas and British Gas, is one of the biggest power providers in the UK. Picture: John DevlinCentrica, the owner of Scottish Gas and British Gas, is one of the biggest power providers in the UK. Picture: John Devlin
Centrica, the owner of Scottish Gas and British Gas, is one of the biggest power providers in the UK. Picture: John Devlin

The group – one of the UK’s largest power providers – said it was seeing an increase in demand for energy among households as Britons have been forced to stay at home, but it added that it was being hit by a “more significant” impact from falling business energy use.

As well as the pay freeze for many staff, the group is also deferring all employee cash bonuses, scrapping its final shareholder dividend payout to bolster its finances and halting spending on non-essential projects. It had already axed executive bonuses for 2019 earlier this year.

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Centrica, which also trades under the British Gas name, has stopped non-essential customer visits to protect staff amid the pandemic, but said it still has several hundred UK service engineers who have volunteered to carry out essential home visits to ensure energy supply is maintained for customers.

The FTSE-100 group said it was “difficult to quantify” the hit from coronavirus to its earnings outlook, given the uncertainty over the length of the lockdown, customer behaviour and economic impact.

Bosses said they were committed to taking appropriate actions to maintain a strong balance sheet.

Interim group chief executive Chris O’Shea said: “As the scale and length of the crisis unfolds, it is becoming increasingly clear what a vital role so many of the Centrica team perform to keep our communities warm, safe and supplied with energy.

“I am extremely proud and humbled by the response of colleagues, and on behalf of the board I would like to say how grateful we are to them. While there are so many uncertainties surrounding the impacts of this situation, I am confident that we have acted promptly and prudently to underpin the long term strength of Centrica.”

Last month, two of the top bosses Centrica stepped down, leaving their successors to deal with the volatility caused by the coronavirus crisis.

Chief executive Iain Conn and chairman Charles Berry, who is also the chairman of Glasgow-based engineering group Weir, both resigned from Centrica immediate effect. Berry has been on medical leave since the beginning of February, while Conn had already said he would step down this year.

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