More should have been done to speed up compensation payments and provide aid for businesses hit by last year’s riots, a report^[1] from the London Assembly warned today.

‘Picking up the pieces’, by the Assembly’s Budget and Performance Committee, outlines a series of recommendations designed to apply not only to the aftermath of rioting, but also to other events like flooding or major fires. It argues that poor coordination immediately after the riots and lack of urgency from Government and the insurance industry to settle claims held back the recovery process.

Despite having the knowledge, resources and skills available, the report warns that a comprehensive recovery service was not put in place and many small businesses were left confused about where to look for help.

Insurance companies are subject to particular criticism, with the report pointing out that four months after the riots a third of businesses were yet to receive a penny from their claim, with many relying on charity handouts from organisations like the High Street Fund to keep afloat.

John Biggs AM, Chair of the Budget and Performance Committee said:

“This report isn’t about the riots – it’s about what happened the next day, when the camera crews had gone home and people were left to pick up the pieces. While a lot of good work was done to help the worst-hit businesses back on their feet, more could clearly have been done to speed up the process, especially for insurance claims.

 “Charities like the High Street Fund did a fantastic job providing a lifeline for traders who in some cases had lost everything, but the Mayor and local authorities could have provided more information and coordination both for the victims and for charities.

“The Riot (Damages) Act needs to be reformed and we would like to see the insurance industry using its skills and experience to play a leading role in administering government cash in the future.”

The report says more could be done to help small businesses understand the claims process when they buy a policy and calls for the ABI to publish the full breakdown of how long it took each insurance company to pay out its claims^[2].

The report also welcomed the Government’s review of the Riot (Damages) Act (RDA) and calls for the legislation to be updated to cover all riot-related damage and for the definition of a riot to be improved^[3]. The Committee agreed that the State should continue to pay for loss caused during riots but is calling for the insurance industry to be given a leading role in administering RDA claims and distributing government cash directly to victims.

Recognising the private sector’s contribution, the report praises the work of Sir William Castell’s High Street Fund^[4] which gave out grants of several thousand pounds within days of the riots. The report says the Mayor and local authorities should do more to help philanthropic organisations identify those in greatest need, should similar events occur in the future.

The Committee will hold a follow up meeting on Tuesday 4 December at City Hall to discuss implementation of the recommendations with representatives from the Insurance industry, the government and the High Street Fund.

Ends

Notes for editors:

1. Read the report: ‘Picking up the pieces: A London Assembly report on how businesses were helped to recover from the August 2011 riots’
2. The Committee also questioned the Association of British Insurers’ suggestion that it had gone out of its way to support small business. By January 2012 there did not seem to be any real difference between small and large businesses in terms of the number of riot claims at least part settled.
3. The RDA defines a riot as ‘twelve or more people using or threatening unlawful violence for a common purpose’. It only covers damage to ‘house, shop or building’ and excludes cars, vans and other motor vehicles.
4. The High Street Fund was set up immediately after the riots by Sir William Castell and distributed more than £3m to small businesses affected by the riots. Grants of between £2,000 and £8,000 were given out to 575 separate businesses while residue funds have been invested in long term projects in the worst affected areas like Tottenham and Croydon.
5. John Biggs AM, Chair of the Budget and Performance Committee is available for interview – see contact details below.
6. As well as investigating issues that matter to Londoners, the London Assembly acts as a check and a balance on the Mayor.

For more details, please contact Alastair Cowan in the Assembly Media Office on 020 7983 4504/4283.  For out of hours media enquiries please call 020 7983 4000 and ask for the Assembly duty press officer.  Non-media enquiries should be directed to the Public Liaison Unit, on 020 7983 4100