Flu pandemic would drive a quarter of firms to the wall

2006

Nearly a quarter of businesses would be unable to survive a flu pandemic, new research has suggested.

The study by the London Chamber of Commerce and Industry's London Business Panel survey warned that a significant minority of firms did not have sufficient working capital in place to enable them to last out a 12-week outbreak of avian 'flu, the typical length of time a pandemic would be expected to last.

Some 23 per cent of the 287 directors polled admitted their business would not be able to survive for three-months if their customer base were disrupted by a pandemic.

A total of 60 per cent said that they would and 17 per cent were unsure.

In other findings, 30 per cent said that they had updated their contingency plan specifically to deal with an avian 'flu outbreak.

Some 22 per cent had not, 18.6 per cent did not know and a further 29 per cent did not have a contingency plan, said the LCCI.

But just 17 per cent said that they had tested their contingency plan since the threat of avian 'flu emerged.

Some 10 per cent of firms said that their business would be sensitive to public events such as football matches, conferences and concerts being compulsorily cancelled by government to prevent the spread of avian 'flu.

More than one fifth said that they would no longer be able to operate their business model if between 10 and 30 per cent of staff became unavailable for work.

Forty per cent said that they would not be able to function if between 30 and 50 per cent of their staff became unavailable for work.

And 39 per cent said it would be necessary for more than half of their staff to be unavailable before their business became unviable.

LCCI president Michael Cassidy said: "This is not scaremongering by the LCCI. Thinking ahead is the best way of tackling this type of threat. Running out of cash through lack of fore-thought is the swiftest way to insolvency, particularly with smaller businesses."

He added: "This is a worrying outcome of our survey which should be treated as a wake-up call for business leaders."

Britain has a high vulnerability to the spread of avian flu once it has mutated to the human form, because of our dense population and international links, he warned.

"So readiness to deal with its consequences should have high priority in business planning. This survey shows that much still needs to be done to avoid the most obvious threats of such an eventuality," he concluded.

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