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  • July 2013
07

MPs issue warning on 'inadequate' flood defences

Open-access content Thursday 4th July 2013 — updated 2.43pm, Wednesday 6th May 2020

Government spending on flood prevention remains insufficient to meet the growing risk, despite increases announced by Chancellor George Osborne in last week's spending round, MPs warned today.

The Commons environment committee said ministers at the Department for Environment, Food and Rural Affairs 'must convince the Treasury that capital investment from all sources must be increased by £20m year on year for 25 years to keep pace with threats due to climate and demographic changes'.

The report comes after two years of record rainfall led to extensive flooding across the UK and cost the economy millions, stretching the resources of the Environment Agency, which has operational responsibility for flood and coastal risk management.

The committee has given Defra 18 months to show that the partnership model for funding flood defence can deliver much greater private sector funding 'since the approach has secured very little to date'.

It says there must be a better balance between revenue and capital spending, and funding must be delivered more swiftly to local authorities so they can secure more private sector money for managing local flood risk, such as surface water.

The committee points out that more 5.5 million, or one in six, properties in England and Wales are at risk from flooding and there is 'a likelihood of more severe weather incidents leading to increased flooding in future'.

Climate change is predicted to increase flooding by the sea and rivers, while changing rainfall patterns and some new building developments make surface water flooding more frequent.

Defra will spend about £2.3bn on coastal erosion and flood risk management in the current spending period from 2011/12 to 2014/15.

But, the report said, the current method of allocating funds 'is biased towards protecting property' so the money is largely spent in urban areas. 'Defra's failure to protect rural areas poses a long-term risk to the security of food production as a high proportion of the most valuable land is at risk of flooding,' the report said.

The committee also welcomes the agreement to establish a new 'Flood Re' insurance scheme to make sure everyone can get affordable insurance. The scheme would be funded by a levy, probably about £10 a year, on all household insurance customers, and the committee demands safeguards to keep the cost down.

Committee chair Anne McIntosh said: 'Delay by the government and the insurance industry in agreeing provision of affordable flood insurance has caused a lot of householders unnecessary uncertainty. The opaque cross-subsidy provided in the current Statement of Principles must be translated into a more transparent scheme with clear and robust governance arrangements.'

A Defra spokeswoman said more money was being spent on flood defences 'than ever before'.

She said: 'We have secured a historic six-year settlement on capital spending for flood defences. From 2015 we're spending £370m on building new flood defences, rising to over £400m in 2021. We are providing an above-inflation increase of £5m for the Environment Agency's floods maintenance work. 'We have also reached an agreement with the ABI guaranteeing affordable flood insurance for people in high-risk areas both now and in the future.'

This article appeared in our July 2013 issue of The Actuary.
Click here to view this issue
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