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Flood defences need £1bn a year spend

Flood defence spending must double to £1bn a year by 2035 to ensure that protection for the one in six homes now at risk of flooding in England is maintained, the Environment Agency said last week.

Spending on asset maintenance and construction must rise from the £570M allocated in 2010/11 to around £1.04bn by 2035, before inflation is taken into account, it said.

This equates to an increase in asset construction and maintenance spending of around £20M per year and a total spend of £20bn over 25 years.

The Agency’s spending demands were released to coincide with the publication of revised climate change forecasts, and will be the Agency’s key weapon as it lobbies for future funding.

Its current funding settlement runs until March 2011.

Locked into the risk

“The objective − our objective − is to avoid loss of life, property and industry, ” said Agency director of flood and coastal risk Robert Runcie.

“The £180bn of benefit that our £20bn spend offers is good for people, the environment and the economy and it is on that basis that funding discussions will take place.

“The £180bn of benefit that our £20bn spend offers is good for people, the environment and the economy.”

Robert Runcie, Environment Agency

“The spend over the next 25 years is needed as the flood risk is already locked in. And while we know that £20bn is a large sum in anybody’s account, it is only a £20M year on year increase,” he said.

The Environment Agency estimates that the annual cost flood damage to residential and commercial property in England, plus the cost of further disruption, damage to infrastructure and loss of business, could rise from £2.5bn to £4bn by 2035 unless flood defence funding increases.

It believes its investment proposals could save England £180bn in avoided damage and disruption costs over the next 100 years. But the Agency accepts that alternatives to central government funding for flood defences will have to be considered.

“The insurance industry paid out £3.5bn in insured losses in the Summer 2007 floods,” said Runcie.

“When you offset our £25bn spend against the £180bn in losses it will save, the benefit to cost ratio exceeds 8:1.

“So there is a debate to be had, and that is what we’ll enter into now. Should finances come from the Exchequer or should there be some contribution from the beneficiaries?”

The greatest return on investment

Most of the Environment Agency’s budget is spent on dealing with flood risk from rivers and the coast.

Around 5M people live and work in 2.4M properties at risk from rivers or the sea and 490,000 of these face a significant risk of flooding. The Agency warned that this figure would rise to 840,000 by 2035 if future investment is only maintained at existing levels.

Its proposed option is to maintain current levels of protection and to target properties classified as being at “significant” risk of flooding where the benefits of doing so are at least double the costs. This provides the greatest net return on investment.

The £20bn cost of doing this assumes that the Environment Agency will not have to meet the costs of funding defences for future developments on flood plains. This is because developers will have to pay to defend such properties.

An additional 2.8M properties are at risk of flooding from surface water. The Agency estimates that an extra £150M a year will have to be spent on mitigating this risk by 2035.

“Big providers of national infrastructure now have to undertake risk assessments of how climate change will affect them.”

Robert Runcie, Environment Agency

In addition 55% of water treatment works and pumping stations, 14% of electricity infrastructure, 2,358 schools and 2,363 doctors’ surgeries in England are in flood risk areas, along with 4,000km of roads and 2,500km of railway.

Owners of major pieces of national infrastructure now must carry out risk assessments to see how climate change affects them, said Runcie.

“Big providers of infrastructure that we need to be functioning for the economy to work now have to undertake risk assessments of how climate change will affect them and report this to the government,” said Runcie.

“The government is producing a National Risk Assessment by 2011 and it will want all those providers to feed in.”

Flood risk: Key facts

Regions ranked by the number of properties at significant risk of river and sea flooding:

  1. South East England 111,356
  2. South West 86,178
  3. East Midlands 81,096
  4. Yorkshire & Humber 65,380
  5. Greater London Authority 40,412
  6. East of England 33,050
  7. North West 28,941
  8. West Midlands 19,173
  9. North East 19,167

Top 10 local areas with the highest number of properties in areas with a significant chance of flooding from rivers or the sea:

  1. Boston District 23,700
  2. North Somerset 20,415
  3. East Lindsey District 14,949
  4. Windsor and Maidenhead 11,477
  5. City of Kingston upon Hull 9,825
  6. Shepway District 9,065
  7. Sedgemoor District 8,092
  8. East Riding of Yorkshire 7,513
  9. Runnymede District 7,007
  10. Warrington 6,533

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