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Flood defence spending 'insufficient', says damning spending watchdog report

Spending on flood defences is insufficient to meet the maintenance needs identified by the Environment Agency, according to a report by public spending watchdog the National Audit Office (NAO).

The UK’s spending watchdog acknowledged that both the Agency and the Department for Environment, Food and Rural Affairs (Defra) had to operate with “limited resources”. For 2013/14, £606M was allocated for flood risk management.

The NAO was critical of cuts made by the Coalition Government. “The government made an extra £270M available following the winter storms in 2013,” the report said. “In cash terms, this has restored maintenance funding to 2010-11 levels. However, this represents a real terms decrease of 6% between 2010-11 and 2014-15.

“Excluding the one-off funding of £200M provided following the winter floods, total funding decreased in real terms by 10 per cent in the same period.

“Sustaining the current standard of flood protection is challenging in this context, especially as climate change increases the load on flood defences.”

The NAO found that the Agency’s projects for the construction of new defences provided good value, and that it has a “robust process” in place to prioritise its spending on maintenance, based on the benefits and risks identified in flood risk models.

However, the NAO is concerned about prioritisation of spending. “As of August 2014, 1,356 asset systems (50% of the total) with a lower benefit-cost ratio– were being maintained to a minimal level,” its report said. “These are likely to deteriorate faster as a result, increasing replacement costs in the long term where assets are retained.”

The spending watchdog was sceptical about Government policy of encouraging communities to take steps to manage their own flood risk. It said: “Defra is working with local authorities, encouraging them to publish quickly their local strategies for dealing with future floods. But as of March 2014, only 16% had done so, despite this requirement being in place since 2011.”

The UK’s spending watchdog said there were five million properties at risk of flooding as of December 2013.

The Environment Agency’s estimate of the replacement value of flood defence assets it maintains stands at £24bn.

Amyas Morse, head of the National Audit Office: “Against a background of tight resources, the Agency has improved how it prioritizes its spending, including on the maintenance of flood defences. On this measure the Agency is achieving value for money.

“However, if we set aside the emergency spending in response to last year’s floods, and give due credit for efficiency improvements, the underlying spending on flood defences has gone down. The Agency, as it recognises, will need to make difficult decisions about whether to continue maintaining assets in some areas or let them lapse, increasing in future both the risk of floods and the potential need for more expensive ad hoc emergency solutions. The achievement of value for money in the long term remains significantly uncertain.”

The Government disputed the NAO’s funding claims. Flooding Minister Dan Rogerson said: The NAO has drawn conclusions on funding based on inappropriate comparisons. The NAO compares two financial years (10/11 compared to either 13/14 or 14/15) rather than looking at the total amount we have spent over this Parliament. This Parliament will see a 5% real-term increase in flood spending, compared with the previous Parliament.

“The NAO figures exclude £200M of additional funding which was provided following the winter floods. Repairs are carried out after every flooding event, large or small, often funded from the Agency’s existing budget. Previous years’ spending therefore also includes costs relating to incident response and repairing damaged flood defences.”

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