MPs today criticised the Department for Environment, Food and Rural Affairs (Defra) for doing little to dispel uncertainty over who holds ultimate responsibility for protecting homes from flooding.
Speaking as the Public Accounts Committee published a report called Flood Risk Management in England, committee chairman Margaret Hodge MP said that flood protection is a “national priority” but that it was “unclear where the buck stops and who is ultimately responsible for managing the risk of flooding”.
The report’s publication follows discussions between the committee and Defra and the Rural Payments Agency. The report says that the current strategy for long-term expenditure on flood protection anticipated a higher level of central government funding than is now likely to be available.
Flood funding challenge
There have been significant changes in the funding arrangements, said the committee. In 2009 the Environment Agency projected that its flood risk management budget needed to rise by 9% during the spending review period (2011/12 to 2014/15) to sustain current levels of protection, particularly because risks are growing due to climate change. However during the same period the Agency’s flood risk management budget has been reduced by over 10%.
Defra told the committee that through efficiency savings and the improved use of resources this budget cut will not reduce capital expenditure on flood defences in this spending review period. However, the Agency had not yet adjusted its long-term investment strategy and could not tell the committee what the scale of the long-term funding gap would be.
“There is a big mismatch between what the Agency reckons it needs to maintain current levels of flood protection and the budget being made available,” said Hodge. “The Department sees more funding coming from local sources – including businesses and local authorities. We are sceptical that this will be possible when local authorities and businesses are themselves under financial pressure.
“There is also a great deal of uncertainty about whether there will be enough money to maintain and improve flood protection in the longer term, and who will pay. The department tells us that it is not ultimately answerable and shares the responsibility with the Environment Agency and local bodies. But Defra has no way of knowing whether local flood management systems are adequate or when it should step in.”
ICE director general Nick Baveystock said it had raised concerns in the past about funding for flood defence schemes because of spending cuts and changes to the way projects are funded. “The move to give local authorities more responsibility is sensible but because most flood budgets will not be ring-fenced, there is a danger that it could be used to make up shortfalls in other areas,” he said. “We need to move away from a costly and increasingly impractical ‘defend at all costs’ approach and think innovatively about how to prevent and build risk management into the planning for new and existing communities.”
Comittee conclusions and recommendations
The current strategy for long-term expenditure on flood protection anticipated a higher level of central government funding than is now likely to be available. Risk of flooding affects some 5.2M homes and the actual cost of flood damage is £1.1bn and is set to rise. The Environment Agency assured the committee that during the current spending review period planned capital expenditure would continue to be achieved through efficiency savings and the improved use of resources. However, it is not yet clear how the money required to maintain and improve flood protection in the longer term will be found. The Agency needs to publish a new long-term strategy reflecting current funding realities in which the assumptions underlying its plans are transparent.
It is unclear whether local contributions will be sufficient to replace funding that has previously been provided nationally. The Department for Environment, Food and Rural Affairs (Defra) has developed an innovative approach to attracting local funding. However, the committee is sceptical about how much it can rely on funding from local sources when local authorities are facing their own funding challenges and balancing many pressing needs. In addition, more complex partnerships and funding agreements will mean schemes take longer to put in place and may cost more to develop. Defra needs to support local authorities to bring in local partnership arrangements that are clear, transparent and not overly bureaucratic.
Defra has no way of knowing whether local flood management systems are adequate or when it should intervene. There is no timetable for producing local flood risk management strategies and Defra relies on influencing local authorities through encouragement and guidance. It is unable to guarantee that it will receive the information it needs to monitor flood defences effectively and it is unclear who is ultimately responsible for ensuring flood defences are adequate. Defra needs to articulate what information it will rely on to evaluate local risk management strategies and be clear about when and where it will intervene should local plans be inadequate. The public need to know and understand where responsibility and accountability lie.
Local communities need to have confidence in the decisions made on managing flood risk but do not always feel involved in the decision-making process. The Agency needs to engage with communities and other local sources of expertise on preferred solutions, particularly as local communities are being asked to pay more towards flood protection. The Agency should look to improve its consultation processes so they support more meaningful local engagement.
In light of speculation about the levels of funding available to provide effective flood protection, there is uncertainty over the future availability and affordability of insurance cover for properties in risk areas. The existing agreement between Defra and the insurance industry which guarantees availability of insurance ends in 2013. Defra is leaving it late to reach a new agreement and this will lead to uncertainty and worry for affected households and communities. The Government needs to reach an agreement with the insurance industry urgently and work more closely with the industry to ensure insurance cover is both available and affordable.