Flood-affected businesses will receive an extra £51m in government support » SMEInsider

Flood-affected businesses will receive an extra £51m in government support

Chancellor George Osborne has pledged an additional £51m to help families and businesses affected by Storm Desmond, but the Federation of Small Businesses argues that the funding will not even come close to helping SMEs cover the rebuilding costs.

 

Financial assistance

Last weekend Cumbria and Lancashire were severely affected by Storm Desmond; falling victim to severe flooding and strong winds, with many businesses in the region now out of action until at least the New Year.

It’s estimated that over 2000 businesses have been affected. In many cases, the water in some small firms hasn’t even receded yet, costing SME owners thousands of pounds in recovery costs.

On the 9th December, Osborne announced an additional £51 million to support households and businesses affected by the floods, taking the total support pledged by the government to over £60 million.

The money will cover the costs of rehabilitation and the reconstruction of people’s homes, providing Local Authorities with over £500 for each household affected. An additional £10m has been invested into local flood defences by the Environment Agency to ensure that there will be no repeat of the chaos experienced by thousands of residents.

 

Getting back on their feet

The department for business innovation and skills (BIS) has announced that £5m of the funding will be committed to helping business owners affected by the floods, with funding equivalent to £2,500 per business provided to local authorities. They are also suspending business rates for many of those affected until they are trading again.

“We are providing £5 million of quick support for businesses forced to close their doors due to the floods,” said Anna Soubry, minister of small businesses.

“Our priority is to help these hard working business owners get back on their feet, so they can open their shop doors and be back in business for Christmas,” continued the minister.

 

‘Identify the hardest hit businesses’

John Allan, national chairman of the federation of small businesses, is happy that government is providing financial assistance to affected businesses, but he believes that £2,500 doesn’t begin to cover the costs for some local firms.

“For many of the small businesses impacted by flooding this will come as very welcome news – but for some, £2,500 will not even come close to covering the cost of rebuilding their business.

“We would urge the Government to identify the hardest hit businesses and consider additional funding support for these exceptional cases.

“Recent FSB research suggests around 75,000 smaller businesses at risk of flooding have found it difficult to find flood insurance and 50,000 have been refused for flood insurance cover.”

The FSB has previously expressed serious concern that small businesses are excluded from the Government’s flood programme, Flood RE, which guarantees affordable flood insurance.

“Ministers should look again at the availability of affordable and comprehensive flood insurance for small businesses, potentially through a dedicated Flood Re style agreement,” continued Allan.

“The financial cost to small businesses following the 2012 flooding was £200 million. We can’t hope to create a buoyant economy, particularly in rural areas, if vulnerable small businesses can’t sufficiently protect themselves from increasingly unpredictable and severe weather that in the worst cases can close a business