New research from the Federation of Small Businesses (FSB) has found small firms are not reporting crimes against their businesses because they don’t think it would lead to a successful prosecution (38%).
The FSB findings call into question the accuracy of the current crime statistics and suggest low levels of trust in the ability of the police to deal with business crime among small businesses.
Nearly a quarter of smaller business owners (24%) do not report any crimes committed against their business. When asked why, most said they felt reporting it would not achieve anything positive (46%). This figure has not changed in six years, highlighting an ongoing lack of confidence in the authority’s ability to address business crime over that period, despite the launch of Police and Crime Commissioners (PCC) in 2012.
These worrying findings come as candidates seeking to become PCCs set out their stall to voters. The FSB has produced a manifesto that urges candidates to put business crime at the heart of their plans to ensure this issue is finally addressed. Business crime acts as a barrier to growth for the UK’s 5.4 million small businesses and in the worst cases, puts entrepreneurs out of business.
Mike Cherry, National Chairman at FSB, said: “While the new definition of ‘business crime’ adopted by the police in April 2015 is a real step forward, there is still a long way to go in understanding and addressing the true extent of the problem. 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.”
Other frequent responses from business owners explaining why they did not report business crime included: the belief that police would not be able to find the criminals or achieve a successful prosecution (38%), and that reporting crime was too time consuming (26%).
FSB research also found a third of small businesses thought business crime was increasing in their area. This stands in stark contrast to the Government’s Commercial Victimisation Survey last year which claimed business crime was decreasing. Coupled with the number of businesses that do not report crime, it is clear that Government statistics may not be reflecting the reality experienced by many firms.
Two thirds (66%) of those surveyed by FSB have been a victim of cyber crime in the last two years, just under half (48%) have been a victim of non-cyber crime, and 53% have been a victim of both. On average, those affected have been a victim of cyber crime four times and non-cyber crimes three times.
Businesses have made a concerted effort to improve their security. Two fifths (41%) of businesses have installed or upgraded a security system to protect their business, an increase of 25 per cent since 2010. But security will only do so much. The Government and police need a stronger focus on business crime.
Cyber security is on the increase and is therefore an area of particular concern for small firms. As a result, it is being taken even more seriously, with 80 per cent of small firms protecting their IT systems with computer security software. Only 3 per cent of small firms reported not putting any cyber security measures in place.
Mike Cherry, continued: “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.
“FSB members call on candidates for PCCs standing in elections across England in May to make combating business crime a central theme in their long-term plans. We are issuing our PCC manifesto today, in the hope we can forge a better relationship between police and businesses once and for all.”
Suggested measures PCC’s could incorporate into their campaigns to increase small business confidence include:
• Placing business crime at the heart of local Policing Plans with clear business crime objectives.
• Increasing the interaction between the small business community and their local police force.
• All PCCs to conduct a routine survey of local businesses on policing matters, akin to the ‘Business Attitude Survey’ in London.
• Encourage more businesses who are victims of crime to report it by taking measures to break-down some of the negative perceptions of doing so.
• All forces to use the new business crime definition based on clear guidelines about what qualifies as a business crime.
• Map and publish comparable data on the number of business crimes in each area (reported and detected) to enable small businesses to compare the performance of different forces.
• Invest in cyber investigation capabilities for every force. This may involve hiring in external expertise where needed to deal with the growing number of incidents.
• 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.
• All forces should substantially increase their fraud investigation capability.
• PCCs and local constabularies should take advantage of the planned improvements in the capabilities of the National Fraud Intelligence Bureau and Action Fraud. This should deliver a ‘step change’ in the identification, investigation and prosecution of fraud.