Examination of Witnesses (Questions 460
- 479)
WEDNESDAY 28 NOVEMBER 2007
MR STEPHEN
HADDRILL, MR
IGAL MAYER
AND MRS
BRIDGET MCINTYRE
Q460 Mr Williams:
Have we been too slow in implementing the previous recommendations
of the report Making Space for Water?
Mr Mayer: Often in our industry
it is very hard to predict the impact of a trend at the beginning
of a trend. I think really that is where we are. Global warming
and climate change is a changing trend and, yes, you can look
at June and July as a bit of a wake-up call, but this is the beginning
of a trend and I think we should be reflecting on the events of
the summer and looking at how we can put co-ordinated plans across
all fronts: making the insurance affordable, the defence spending,
building code changes to make the future stock more resilient.
I think we are at the beginning of a trend and it is human nature
to almost deny that the trend is as big as it is going to be.
Q461 Mr Williams:
Whose fault is it that these previous recommendations have been
too slow in being implemented? You have said that they are too
slow. Whose fault is it?
Mr Haddrill: We do not really
want to get into a blame game here; so I think probably I would
quite like to duck that, because actually what we need is to—
Q462 Chairman:
That is disappointing. We like to know who the guilty parties
are. In all seriousness, if we do not have some candid comments
about where there are areas where there have got to be policy
improvements, then all the information that we hoover up in inquiries
like this is less relevant; so could you think again about being
a little more candid, Mr Haddrill?
Mr Haddrill: What I would say
is that we have identified some very serious shortcomings in the
way that a strategic approach has been put together, i.e. it has
not been put together yet. It particularly has not been put together
around drainage—that needs to be changed. The bodies that
would have to do that are the Government, through legislation,
and the Environment Agency. The other thing that I think needs
to be resolved is the relationship between creating a national
strategic body, giving it oversight, enabling it to look at flood
plains in the whole and having all the information, and so on,
but then not riding roughshod over the ability of local government,
people on the ground who understand the micro-risks, to have some
money to do something about those. We always know that the integration
of a national framework and local delivery is a difficult thing
to do, so I think that action needs to happen on that, but actually
it needs some pretty careful thought as well.
Q463 Mr Williams:
Can you tell us what the necessary organisational changes that
have not taken place yet are? You said that the organisational
changes have not taken place. What are they?
Mr Haddrill: The principal one
is to create an authority that can oversee the flood plain as
a whole that brings together local governments, water companies
and the Environment Agency. It could well be, and I think it should
be, the Environment Agency that does that. Secondly, a body, probably
the same body, that makes sure there is co-ordinated action on
drainage and also on the coastal issues as well. I think it is
possibly the Environment Agency that needs to be given this authority
and then needs to get on and use it.
Q464 Mr Williams:
If somebody has been too slow in following up these recommendations,
could you pinpoint the most urgent recommendations to put in place
as soon as possible?
Mr Haddrill: I think the urgent
issue is this drainage issue. If we just step aside from the floods
this summer, 6,000 houses end up with sewerage inside them every
year anyway, and that is a totally unacceptable situation. We
have towns generally reaching a protection level against that
one in 100 year event and yet the drainage system is one in 30
years. We have planning authorities giving approvals to big developments
all over the place, and then the drainage system is just expected
to take that extra effluent on without any upgrading. These are
real practical problems, not problems that are normally regarded
as very exciting until something goes wrong, when it is absolutely
disastrous, and we need that body that will bring about some energy
and co-ordination to sorting those issues out.
Q465 Chairman:
Before we move on from this, do you think the Government has been
candid enough with the public about the level of flood protection
which the nation can actually afford to buy?
Mr Haddrill: I think that the
Government needs to get over the message—and I do not think
it has yet because I do not think it has fully accepted it or
understood it itself—that this is going to take a long time
to sort out, that we are going to have to put money in year after
year as the climate changes, that we must aim to get not today's
level right but the level that we expect to be at in 30 or 40
years: because after all the mitigation benefits are not going
to come through for 40 to 50 years, so we are going to face a
rising curve and we have got to aim at that. So, no, I do not
think that message has been got over.
Q466 Mr Williams:
In the Statement of Principles you talk about the one in 75 year
risk. I have looked at a number of flood maps and they vary between
the Environment Agency and Norwich Union, for instance. Which
one is going to be the definitive one in telling somebody you
are a one in 75 possibility, or above it, or below it, or whatever?
How is that going to work when there are so many different interpretations
of the data?
Mr Mayer: Broadly speaking, I
do not think our data is very much different than what the Environment
Agency has, but to bring to it life for you, the EA maps will
pinpoint to a 100 metre area. We have invested in mapping technology
that looks within that 100 metres and will identify individual
homes that may be sitting at a higher elevation and therefore
lower risk. We have shared that data and we are quite happy to
continue to share that data.
Q467 Mr Drew:
Who do you share it with?
Mr Mayer: With the EA and with
any government authority that would like to have that data. I
think it is useful data. Again, some of the flooding that we saw
this summer, as I said earlier, happened exactly as we expected,
particularly in Tewkesbury in Gloucestershire, but what our flood
mapping did not predict, as Mrs McIntyre has said, is the monsoon
type rainfalls that happened in Hull and Sheffield, and that is
where Stephen has rightfully said that we need to take a look
at the drainage, because if there is new information that has
come in that suggests an additional urgency, then we need to look
at it.
Q468 Mr Drew:
You mentioned the issue about time and that this is a long-term
commitment, and that is something, from what we have already drawn
evidence upon, we would agree with. The problem is when you go
and talk to constituents the one thing they say to you is, "There
is no time. We cannot go through this again." I have had
constituents who have been flooded five times in seven years and
time is on their side. Next time it comes down, literally when
you look out of your window at a heavy day's rainfall--- That
is not a life that is fair for anyone to live.
Mrs McIntyre: You only have to
visit people's homes and experience the effect of it, not just
on the day of the flooding, but go there two months later and
experience the stench of flooding and the period of discomfort
that the family feels from flooding, to know that getting flood
defences and investing flood defences is the way that we need
to move forward, and we have talked about the amount of money
we believe initially needs to go into that.
Q469 Paddy Tipping:
Mr Haddrill, you have been pretty robust in your criticism of
the Government's £800 million by 2010-11 for flood defences.
Why is that?
Mr Haddrill: We felt that a larger
figure was needed. We were talking actually about £750 million
a year for three years plus £150 million that was identified
by the National Audit Office as being needed for repairs that
were required to the existing infrastructure, and that produced
a figure that was larger than the Government's profile which went
up to 800. That is the first point. The main point is that my
understanding from the Environment Agency itself and from Barbara
Young is that that 800 million figure that was announced, I think,
at the time of the main floods, was really the figure that the
Government had in mind before the floods. I think that, as a result
of what happened during the floods, we know that the number has
got to go up if we are going to deal with those things that came,
particularly the drainage issue. The third thing is that we do
not really think it is an adequate response to the problem of
coastal flooding in particular, where we have been asking for
the last two years for expenditure over a 25-year period—so
quite a long period—of eight billion pounds to protect the
towns on the east coast.
Q470 Paddy Tipping:
What calculation have you done of the real need?
Mr Haddrill: We will do the calculation
as a result of this risk assessment that we are doing. I do not
want to say 800 is not good enough, it should be something else,
until we have sat down, done the risk assessment, done the gap
analysis, and then we will come out with the new number, but I
know it should be higher.
Q471 Paddy Tipping:
I am concerned with your statement that the Government is letting
down thousands of householders. That is exactly what you have
said. You have asked for 750 a year over three years. It has gone
up to 800 million by 2010-11. It steps up. The actual margin of
difference is pretty limited, is it not?
Mr Haddrill: The margin of difference
between us was still about 400 million, for the reasons I gave,
and it is now 400 million plus whatever we need to deal with the
lessons for the summer, plus the coastal defence. I think that
is quite a wide margin.
Q472 Paddy Tipping:
So what schemes are being dropped?
Mr Haddrill: Firstly, we know
that the maintenance programme was delayed.
Q473 Paddy Tipping:
This is capital.
Mr Haddrill: I cannot give you
a specific list.
Q474 Paddy Tipping:
So why are you upsetting householders and saying, "We may
not be able to insure you in the future"? This sounds a bit
like scaremongering to me?
Mr Haddrill: In fact I am not
really saying we are not going to be able to insure you in the
future, I am saying—
Q475 Paddy Tipping:
That is the perception of some people.
Mr Haddrill: It may be the perception,
but everything I have said I have started off by saying that we
want to carry on doing this business, looking after people, and
so on; so that is our starting point. There have been delays to
major projects, including in areas that flooded. I know that the
Environment Agency is very worried about having had to delay projects
around the Leeds area, for example, which hopefully they will
now be able to go ahead but were put on hold. I would be happy
to come back to you with further examples, but really, I think,
the Environment Agency might best answer that.
Q476 Paddy Tipping:
It would be helpful if you could come back with schemes that you
could point to being delayed. Turning to the two companies: my
impression is that you are more than happy with the step up arrangements.
That is what you have both said in your evidence. Capital money
needs to increase over a period of time.
Mrs McIntyre: We are supportive
of the ABI in terms that we need to increase our expenditure.
If you look at the facts, 564 million was the amount allocated
at the end of 2002 and then it was frozen in 2004. If you look
at something like the Foresight Report, which said you needed
to increase the spend between ten and 30 million per annum for
climate change, and you took claims inflation at about five per
cent per year, you would be looking today at a spend of about
775 million, assuming no additional changes, and that is taking
the low end view of the Foresight Report. Our view is let us do
the analysis that we are doing today, let us learn and really
understand what has happened through the June and July floods,
let us have a look at the Pitt Review and see what that says as
well, and then let us come out in partnership with government
on a sensible view of how much is needed to be spent; but just
by taking the pure fact of the amount of money that has been frozen,
we believe that identifies a gap in addition to the National Audit
Office saying there is 150 million required to spend.
Q477 Chairman:
How refined can you get this number? When we did our Foresight
Report you came and told us it needed to be a billion a year,
then the Government came out with 800 and you said, "Yes,
jolly good, we applaud the Government", and then, shortly
after that, when the Comprehensive Spending Review came out, you
immediately issued another press release saying, "It is not
enough, a billion pounds is required." I am getting the impression
this is plucking a nice, big, round number without a great deal
of precision. I did a little calculation over the three years
of the Comprehensive Spending Review by simply upgrading the 650
million where it starts by a three per cent inflation rate, which
maybe somewhat under, for the construction industry, and you come,
believe it or not, at the end of the comprehensive spending period
to a figure of £689 million. So, that leaves £111 million
of net extra activity. You say to yourself: "How much is
this extra really worth?" and, coming back to your point,
which is why I asked you what probability of flooding you were
trying to achieve and you said a one in 75 year figure, what I
find is that there are lots of disjointed bits. Is that one in
75 everywhere or is it under certain circumstances, only in the
high risk areas, and where should we be spending the money and
how much extra over and above the continuing works that are in
the pipeline? I apologise if it is a slightly disjointed analysis,
but it does show some of the complexity in actually arriving at
a number that is realistic. Is your review going to be more realistic?
Mr Haddrill: The reason we want
to do a thorough review of all the high-risk areas is exactly
to produce a realistic number. Actually the construction index
is quite a bit above the retail price index, and we do not think
that the 800 million does a great deal more than stands still.
It does some more than that. As I was saying, there are also gaps
in terms of the maintenance of the existing infrastructure that
we were concerned about.
Q478 Paddy Tipping:
So what figure are you asking for in 2010?
Mr Haddrill: I am not specifying
a figure now.
Q479 Paddy Tipping:
You say 800 million is not enough but you are not prepared to
say what you want the figure to be?
Mr Haddrill: We will say that
when we have done this review. I do not want to say, or we cannot
say, what is an evidence-based number today. All we do know is
that, because of the lessons of the summer, it should be more
than the number that the Government identified before the summer.
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