Procurement · 24 March 2016

Small firms voice growing concerns over crime with poor confidence in police

Business crime can prevent small firms from growing

Small business owners are failing to report crimes committed against their firms to the police because they do not believe it would lead to a successful prosecution, new research has found.

Roughly a quarter of owners do not report crimes, according to a recent study conducted by the Federation of Small Businesses (FSB). When asked why, 46 per cent said that they felt reporting a crime would not result in a positive outcome for their business.

This figure has not changed in six years, signalling an endemic and long-standing lack of confidence in the ability of the police to address the issue of business crime amongst the UK’s small businesses.

The research also concluded that 38 per cent of small business owners believe that the police would not be able to catch business criminals or achieve a successful prosecution once a crime had been committed, whilst 26 per cent said that reporting a crime would be too time consuming.

Cyber crime was found increasingly to be causing headaches for smaller firms. In total, two thirds of firms surveyed by the FSB had fallen victim to cyber crime in the last two years, whilst just under half had been a victim of non-cyber crime. In all, 53 per cent of firms had experienced both.

Despite 41 per cent of the country’s small firms having installed or upgraded security systems to protect premises – a 25 per cent increase since 2010 – the FSB has called in the government and law enforcement to do more to counter the threat and focus more strongly on business crime.

Newly appointed FSB national chairman, Mike Cherry, said: “Crime affects all businesses, but it impacts smaller firms the hardest as they cannot absorb the unexpected costs. The fact that businesses are not reporting crimes shows a real breakdown in trust and confidence in the police.”

Business crime can act as a significant barrier to growth for small business and can put startups out of business in the worst cases.

Ahead of the police and crime commissioners (PCC) elections in constituencies across England in May 2016, the FSB has encouraged candidates to put business crime at the centre of local policing plans.

“With the average cost of crime to a business now at £5,898, and instances of cyber crime on the rise, there is a real necessity to get a handle on this,” added Cherry.

The FSB has published a manifesto with suggestions of what PCC candidates could in incorporate into their campaigns to increase small business confidence. Some of the suggested measures include:

  • Increasing interaction, the small business communities and local police forces.
  • Encourage more businesses to report crimes by taking measures to break-down some of the negative perceptions of doing so.
  • Map and publish comparable data on business crimes in each area to enable small businesses to compare performance of different forces.
  • Invest in cyber investigation capabilities for every force and ensure frontline staff are trained in how to handle incidences of cyber crime, and that the response to victims of cyber crime is significantly improved.
  • Substantially increase the fraud investigation capability of all forces.
  • Step up the identification, investigation and prosecution of fraud, taking advantage of the planned improvements in the capabilities of the National Fraud Intelligence Bureau and Action Fraud.

What are the new insurance challenges brought on by cyber crime? Found out here.

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Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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