UK flooding costs small firms £831 million

Will Green is news editor of Supply Management
6 March 2014

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6 March 2014 | Will Green

The recent flooding in the UK cost small firms £831 million after they were affected by disruption to the movement of goods and supplies and other factors.

A survey by the Federation of Small Businesses (FSB) reveals 29 per cent of members in affected areas experienced transport disruption as a result of the floods, costing each firm an average of £1,531.

The FSB said it was three months since the first flood warnings were issued, with many areas in the South West still suffering, and the impact on businesses had been “significant”.

A third of firms in affected areas suffered reduced demand for goods and services while 16 per cent experienced staff absences.

John Allan, national chairman at the FSB, said: "In the past few weeks we have heard countless stories from our members who were left devastated by some of the worst flooding on record. Not only have they had to cope with a lack of demand for their services, many have had to close. That is why government support has been welcome, and with many still affected, why that support needs to be kept under review." 

The FSB said more than a third of members in flood-hit zones expect it to be more difficult to renew their insurance and 59 per cent expect it to be more expensive. The organisation called for more government support for small businesses to access insurance along the lines of the “Flood Re” scheme, which supports homes but not businesses.

Allan said: "We also know small businesses are worried they will find it increasingly difficult and considerably more expensive to insure their businesses. Certainly the evidence we have from our members points to small businesses' exclusion from the Flood Re scheme being unhelpful. We want the government and the insurance industry to look again at the support they have in place for small businesses in flood hit areas and see whether there is more help they can provide to ensure they have access to adequate and affordable insurance." 

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