Council Leader delivers a second urgent message to Thames Water

Dear Chris Weston,  

Last month, we wrote to you with a simple, but urgent message: get your act together, and properly support those impacted by the devastating flooding on Caledonian Road.

One of the ways that Thames Water can do that is by making changes to the compensation approach currently being applied to the 38 small independent businesses affected by the flooding.

The impact of this flooding has been devastating. Many of these small, independent, family businesses have lost their premises, stock, equipment and income overnight. They now face months of disruption, uncertainty and financial distress. We have seen first‑hand the severe emotional and economic toll this has taken on business owners, many of whom have served this community for decades.  

Thames Water has informed businesses that compensation for damaged contents will be settled on a like‑for‑like (indemnity) basis. This model, which accounts for age, depreciation and wear is significantly out of step with what most insurance policies offer, and what is required for genuine recovery. It means essential equipment and appliances cannot be fully replaced and flooring, fittings and materials that are central to business operations will not be reimbursed at replacement value. At a time when much-loved businesses that have been a part of our community for years are suffering from financial loss and severe stress, this only adds to that burden. 

By contrast, many standard insurance policies operate on a new‑for‑old basis. We understand that residents affected by the same incident will have access to this protection. We struggle to understand why small businesses, who are the backbone of the local economy and community, are not afforded the same level of support.  

Small independent businesses cannot absorb this gap. These businesses are already navigating a challenging economic climate, rising costs and ongoing pressures that threaten high streets nationally. For many, the financial gap created by the like‑for‑like approach will simply be too great to withstand and we risk them never recovering following an incident that Thames Water are at blame for.

Misinformation has also caused real distress and loss of trust. We must highlight the significant distress caused by Thames Water’s own ‘Putting Things Right’ booklet, issued to both residents and businesses. This document stated clearly that contents damage would be covered on a ‘new for old’ basis. Businesses took reassurance from this. Some began planning their recovery on this basis. To now be told the opposite has created additional distress at an already overwhelming time.  

A fair recovery requires a new‑for‑old standard. We strongly urge Thames Water to reconsider the decision not to offer a new‑for‑old compensation model to affected businesses. If the objective is truly to put things right, then businesses must be enabled to return to their pre‑loss position, not left with unfillable gaps.

A new‑for‑old approach would restore trust and demonstrate genuine commitment to repairing the harm caused. At a time when these businesses feel vulnerable, overwhelmed and unsure of their future, this would be a fair, proportionate and socially responsible response.

Similarly, we’re hearing from both businesses and residents that have had cars and other vehicles written off as a result of flooding. While claims are being settled based on set book values, this doesn’t take into account the stress, effort, and inconvenience businesses and residents face in replacing their vehicles. It’s another example of people being treated like customers, rather than human beings.  

If Thames Water is genuinely committed to ‘putting things right’, then ensuring that affected businesses are compensated on a new‑for‑old basis is the clearest and most meaningful step you can take. 

We would welcome a meeting as soon as possible to ensure that these businesses get the support they need at this extremely challenging time.

Yours sincerely,

Cllr Una O’Halloran

Leader of Islington Council