London unprepared, despite major incidents

The latest 'London Business Survey' from the CBI and KPMG highlighted how in the past year businesses had faced terror attacks on London's transport network, the Buncefield oil depot explosion, floods, power failures and the continuing threat of theft and fraud.

However, only 47% of companies with less than £5 million turnover - representing over 98% of the capital's businesses - had a contingency plan. A further 29% were currently putting plans together, according to the survey.

The findings improve in relation to company size. More than half (56%) of firms with a turnover of between £6 million and £20 million had a plan, rising to 79% for companies with a higher turnover.

Rick Cudworth, head of business continuity services at KPMG said: "Surprisingly, these figures are similar to those of last year, and would seem to indicate that whilst there is plenty of guidance and help available in drawing up and testing plans, a proportion of London businesses still believe that it won't happen to them."

Testing times

According to KPMG, four out of five businesses severely affected by a major incident close within 18 months, while 90% which lose data shut down in two years. Even in minor incidents small companies lose on average two days business at a cost of up to £10,000.

The study highlighted how smaller businesses were less likely to test plans than larger companies, with only 25% of those with less than £5m turnover do so regularly, compared to 77% of larger firms.

Lack of resource or perceived cost were the main barriers for smaller businesses, according to Mr Cudworth, who suggested that the Government may need to consider what further help could be provided.

He added: "Recent wide-scale disasters show that whilst a company cannot predict what scenario it might face - it can rehearse for the unexpected. All firms need to work out how to keep a business working during a major operational disruption."

Continuity 'crucial'

The survey revealed that retailers, restaurants and hotels are the least prepared sector in London, with just 29% having a contingency plan, compared to 70% of professional services firms and 92% of banks and financial services companies.

Sir Digby Jones, CBI director-general, commented: "There is a worrying lack of preparedness revealed by companies who too often believe they won't be affected. But whether it is fire, flood, fraud or something more sinister, the need to have tried-and-tested continuity plans is crucial.

"While larger businesses have learned the lessons of last summer's terror attacks, or the Buncefield explosion, there are too many smaller ones who have not yet drawn up a contingency plan. These are the most vulnerable and could be most in need of help in drawing up plans before it is too late."

The CBI published an introductory guide to contingency and security planning earlier this year, which can be downloaded from the CBI website - see link above/right.