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London riots still affecting businesses emotionally and financially

Posted on 07/08/2013

Two years on after the London riots, small businesses are still affected both emotionally and financially, according to a study from Royal Holloway.

“Indeed, the support that small businesses have received has been mixed,” said lead author Dr Rachel Doern from the School of Management at Royal Holloway.

“While some have had fantastic emotional and practical support from local councils and the community, some say they have been totally ignored, with many business owners still waiting for compensation. Our study found that a lack of adequate external support following riots has increased the vulnerability rather than the resilience of small businesses.”

The researchers found that for small business owners, the riots created two businesses that had to be managed - the primary business that continues to trade on a daily basis, and the secondary business which revolves around managing physical repairs and replacing stock, chasing up insurance or funding, and appealing to customers to come back. In effect, doubling workloads.

In addition, they found that the riots led not only to significant structural and physical losses and business closure, but also to lost opportunities for further development, the loss of personal belongings in some cases and to losses emerging from psychological and emotional costs.

“One owner told us that it was like a bereavement, but without being able to take time off to mourn,” said Dr Doern. “In these cases, moral support from the community has made a very big difference.  It has motivated them to carry on and has helped to counteract some of the negative feelings associated with the riots.  It has shown them that they are valued in the community and serve an important role.”

According to the study, other forms of support have varied, depending partly on the borough businesses operate in. In the best cases, councils were said to be helpful when they provided emotional/moral support, taking an active interest in the business and making regular visits, practical support such as additional rubbish removal, information and advice on how to apply for funding and financial support through business rate relief and/or one off payments or loans. In the worst cases, business owners reported that no support had been provided at all, including from local councillors or MPs.

In addition, researchers found that some of those owners were still waiting for compensation. One had filed a claim with the police fund - The Riot Damages Act - which was subsequently lost, resulting in him receiving only a quarter of the money claimed, and another had his claim rejected when police ruled that the disturbance that caused the damage was not technically a riot as it could not be proven that more than 12 people were involved. The High Street Fund was reported by many to be the most responsive and effective. 

“We cannot underestimate the importance of small businesses. They play a vital role in the local community and provide many economic benefits, such as job creation and innovation. It is crucial to remember that they are vulnerable. Our study shows that both emotional and financial support can make the difference between survival and failure,” added Dr Doern.


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