Only a fifth of flood-hit businesses report re-opening

Almost 5,000 businesses across North West England were adversely affected by the widespread flooding caused by storms Desmond and Eva last December. More than four months on, only around a fifth of these have reported a return to trading using a special online map set up by the Department for Communities and Local Government.

Communities secretary Greg Clark said that it was a testament to the sheer hard work and remarkable spirit of company owners across the North West that more than a thousand had indicated that they were trading once more after the devastation caused by the flooding.

This is undoubtedly true for the businesses that have re-opened but, with nearly 80% having not yet signalled that they have returned to trading, many more will have found the costs and devastation insurmountable, with a substantial proportion facing serious restructuring or insolvency.

The map, launched two months ago, is part of the Government's support package for flood-affected businesses, which also included £250 million in funding available through local authorities. The costs to some businesses far exceeded the help available however and many did not have adequate flood insurance in place.

The Association of British Insurers (ABI) estimated the total cost of the winter’s flood events to be £1.3 billion. The average claim for flood damage was £50,000, representing a substantial increase on the average claim of £31,000 for the storms of the winter of 2013-2014.

A 2015 report by the Federation of Small Businesses (FSB) found that 75,000 firms in or near flood plains struggled to get insurance and a further 50,000 were refused cover outright. The problem could be particularly pronounced for businesses with premises that had been affected previously.

The Flood re scheme is aimed at helping to ensure that households can access affordable flood insurance but so far there are no firm plans to extend this to businesses. In Barclays’ 2016 Hopes & Fears survey, SMEs named extreme weather events as the factor most likely to have a negative impact on their businesses.

By Phil Smith

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