Big freeze costs Scotland's small companies £716m

Published on Monday 15 March 2010 20:25

SCOTLAND'S coldest winter in almost half a century cost small firms north of the Border £716 million in lost income, research out today shows.

• The bad weather has had a bad effect on Scotland's economy. Picture: TSPL

The bill for the whole of the UK is estimated at more than 7 billion after heavy snowfall and freezing temperatures forced many small firms to temporarily shut up shop between December and February.

According to Bank of Scotland (BoS), the winter of 2009-10 – the second coldest ever recorded – hit revenues at seven out of ten small firms, which make up the lifeblood of the Scottish economy.

The cost of the weather rubbed salt in the wounds of many small firms, with 28 per cent already battling to overcome negative growth due to the recession.

More than a third found themselves cut off or had to close their premises during the weather chaos. More than 40 per cent were unable to send and receive supplies due to obstructed delivery routes.

Only one in ten small businesses in Scotland, which account for 99 per cent of all firms in the country, actually benefited from the adverse weather conditions, which saw temperatures languish 2.3 degrees Celsius below the normal average temperature for Scots winters. Northern Scotland suffered in particular, clocking up the coldest winter since Met Office records began in 1914.

More than a third of Scottish SMEs said the weather cost them up to 10,000 while, for 16 per cent, the bill reached between 10,000 and 30,000. The loss of revenue topped 30,000 for 6 per cent of SMEs.

However, despite Scotland being the worst-hit area of the UK in temperature terms, it was small businesses in the south-east of England that took the greatest financial hit, racking up losses of 1.4bn. London firms faced a similar level of paralysis, losing 800m while the north-west was the third worst affected region of the UK with total estimated losses of 778m.

Donald Kerr, head of commercial banking for BoS, said: "Scotland's business have faced a double blow over the past few months. They have had to grapple with the downturn in trade as a result of the recession, as well as the impact of the severe weather conditions."

Kerr said that while small firms can't do anything to influence the weather during future winters, they can take steps to protect themselves against financial losses.

"Most importantly, businesses need to let their customers know that they are open," Kerr said.

Colin Borland of the Federation of Small Businesses in Scotland said: "The FSB always urges businesses to have a solid, up-to-date contingency plan in place to deal with exceptional circumstances – from extreme weather to a flu epidemic.

"Clearly, there will be aspects of these situations outwith any business's control, but by thinking about what must happen to keep their core activities running, they are in better shape to minimise any losses."