Environment Agency chairman Sir Philip Dilley has rejected claims from MPs that there is a £600M “black hole” in England’s flood defence budget.
Dilley was responding to a report from the Environment, Food and Rural Affairs select committee of MPs, published this week, that challenged the ability of the Agency to source a necessary £600M of funding from external contributions. The extra cash is needed to top up a £2.3bn government funding commitment over the next six years that would allow a further 300,000 properties to be protected from flooding.
The extra cash is needed to top up the government’s £2.3bn funding commitment to the Agency for the next six years. In total, this spend will protect 300,000 properties from flooding.
“We support the principle [of private funding], but we have repeatedly expressed concern about the relatively small amounts of private sector funding secured to date,” said committee chair Anne McIntosh.
Only £40M was secured from private sources for flood projects, in 2014/15 alongside £108M from local authorities.
Dilley said that it was to be expected that partnership funding came from other government-funded sources, including councils.
“Partnership funding can come from local authorities or Local Enterprise Partnerships,” said Dilley.
“But there are opportunities to bring in private sector funding alongside that.”
Dilley, a former chairman of Arup, added that he was keen to bring is own expertise to bear by helping the Agency work more collaboratively with other central government bodies.
“There are opportunities to work more collaboratively with other infrastructure providers.
For example, where there are highway schemes we actually could use them to improve flood protection.”
Dilley added that he was satisfied with the level of investment provided.
“In the flood defence world, there is always the possibility to spend more.
“But we’ve got a settlement for six years that will allow us to make a 5% improvement in the number of homes protected.”
That level of improved protection will only be delivered if the minimum of £600M of partnership funding is secured and the Agency delivers a 10% reduction in the capital cost of its schemes.
That will be a challenge, admitted Dilley.
“I do think we are going to have to take another step,” he said.
“We do have an efficiency target and we are not going to do it by doing things the same way and by just pedalling harder. We do need to make some changes.”
Dilley said one opportunity for savings could come through snappier procurement.
“You could argue that Network Rail, the Highways Agency, the Environment Agency and the other principle procurers could work together with the providers and have one conversation,” he said.
Dilley also stressed that maintenance funding was just as important as capital funding.
Maintenance funding has been falling, in line with the government’s deficit reduction strategy, but the Agency did win an extra £35M last year and another £35M this year.
“In our plan for 2014/15 we identified dredging at 250 locations - but the further funding has meant that we are now dredging at 400 locations and we are on target to complete that work by the end of March,” said Dilley.