Business Briefs - May 21

The performance comes despite the firm admitting that it lost more than 500,000 customer accounts in the last year and its pledge to freeze bills until at least July 2016.

SSE blamed “increasingly challenging and highly competitive market conditions” for the decline to 8.5 million accounts.

SSE’s profits for last year meant that it made an average of £69 from the supply of household electricity and gas - before tax and interest payments.

The rise in profits follows a tariff hike in November 2013 and the firm’s subsequent pledge to freeze prices, which it recently extended to next summer in the wake of a 4.1 per cent average reduction in gas prices from last month.

SSE’s total customer base is now the same size as it was in 2008, having peaked at 9.65 million in March 2011.

The company also trades as Scottish Hydro, Southern Electric, Swalec and Atlantic.

A new report published today has revealed that Scotland’s new fire service is facing a new financial black hole of £42.7 million by the end of the decade.

The shortfall, which is equivalent to the cost of more than 1,000 firefighters, has been identified by Audit Scotland.

The public spending watchdog’s report says The Scottish Fire and Rescue Service (SFRS) achieved £16m of savings in the first year since its controversial merger from eight regional services by the SNP government in 2013.

Audit Scotland also said that this trend is expected to continue with projected savings of £328m by 2027/28.

However, it said: “As a result of future cost pressures and likely reductions in funding, we estimate a potential funding gap of £42.7m in 2019/20.”

The funding gap facing the service is on top of a £48.2m black hole revealed to MSPs last month by the service’s chief officer, Alasdair Hay, for the three-year period up to 2016.

Audit Scotland said nearly 80 per cent, or £207m, of the SFRS’S budgeted gross expenditure goes on funding its 8,315 staff, including nearly 4,000 full-time and 3,000 retained firefighters.

Fire Brigades Union (FBU) Scottish secretary Stephen Thomson said frontline services were facing a “continued onslaught” of cuts and warned that some of Scotland’s fire engines could be lost, with a damaging impact on call-out times.

He said: “We are obviously very concerned that it will hit the frontline in terms of firefighter reductions.

“There’s a continued onslaught of cuts that will inevitably have a detrimental effect on the number of fire engines we have in Scotland and their ability to turn up at call-outs.”

Labour’s justice spokesman Hugh Henry warned that the £42.7m funding gap could lead to cuts to civilian staff, which he said had affected the recently merged Police Scotland, and would eventually lead to reductions in firefighter numbers.

He said: “It could lead to problems with frontline services and firefighters, at some point, could be hit by a share of these cuts.”

Community safety minister, Paul Wheelhouse, said: “The service is already in the process of developing its long-term financial strategy and a number of important underpinning strategies that will set out how SFRS plan to manage their finances.”

The Council of Mortgage Lenders’ April estimate for total gross lending is £16 billion, 1 per cent down on the previous month and 4 per cent lower than the £16.7 billion of lending last April.

The CML notes in this month’s Market Commentary that lending appears to be in the throes of an incipient recovery.

Mohammad Jamei, CML economist, said: “Although lending in April was fractionally down on the previous month and year, this followed a stronger March. Overall, we now seem to be on the cusp of a modest lending recovery. Household finances are generally improving as earnings growth continues to outstrip inflation, and mortgages are being offered at extremely competitive rates. As a result, we expect to see stronger lending in future months.”

Jet2.com has announced a major expansion at Edinburgh Airport.

The budget airline has revealed 12 new destinations in a move that the company said would create 150 jobs.

The launch of the new routes by Jet2.com and Jet2holidays will happen next year and include Antalya, Crete, Dalaman, Gran Canaria, Lanzarote, Paphos, Rhodes, Tenerife, Kefalonia, Larnaca, Vienna and Zante.

An additional aircraft will also be brought in at Edinburgh.

It will provide more seats to seven existing destinations - Alicante, Faro, Ibiza, Majorca, Malaga, Menorca and Reus.

Jet2.com and Jet2holidays will start flying to the three new Canary Island destinations of Gran Canaria, Lanzarote and Tenerife in February. The other routes will be phased in later in the year.

Edinburgh Airport chief executive Gordon Dewar said: “This is great news for Scottish passengers and marks the biggest growth for an airline and holiday company at Edinburgh Airport since we became an independent company.

Dundee-based Alliance Trust Savings (ATS) has this week announced that it executed its 3 millionth trade on platform shortly after midday on Monday.

This news represents another milestone for the platform which has already passed the £7bn under administration figure this year and follows last week’s anouncement of the acquisition of Stocktrade which will accelerate the platform’s growth strategy and has the potential to add up to 48,000 new customers and £4.6 billion of new assets onto the platform.

The acquisition is expected to complete later in the year.

Patrick Mill – Managing Director at Alliance Trust Savings, said:“The ability for platforms to offer integrated dealing services to their clients will become increasingly important in the UK market as investors appetite for equities and ETFs continue to grow. As we celebrate our 3 millionth trade on platform we look to the future. The acquisition of Stocktrade will bolster our stockbroking proposition while the introduction of our new platform technology will continue to enable us to grow the business cost effectively.”