Select Committee on Environment, Food and Rural Affairs Minutes of Evidence


Supplementary memorandum submitted by the Chairmen of Regional Flood Defence Committees in England (FL 63a)

1.  The Priority Score System and its use in ranking Flood and Coastal Erosion Defence expenditure

  1.1  The priority score system is designed to rank the expenditure of capital in flood and coastal erosion defence schemes that, if implemented, would deliver specific benefits. The system is not able to rank non-capital expenditure, in particular revenue funded work, and the benefits that can be counted are controlled. In practice some flexibility is permitted in the benefits that are included but the process is opaque. This is almost inevitable but it sits uncomfortably in a system that purports to be objective; a point that is discussed further below.

  1.2  The system is based on three criteria designed to weight the economic impact of a scheme, the effect on people and the benefits for the environment. These mirror the economic, social and environmental pillars of sustainable development.

  1.3  The benefit/cost ratio is the basis of the economic impact score. It is assessed using the guidance in the Flood and Coastal Defence Project Appraisal Guidance documents published by Defra, primarily FCDPAG3. This covers the need for defences as represented by the economic risk (economic damage resulting from flooding or erosion multiplied by the probability of the events causing the damage) compared with the whole life cost of providing the proposed defence. Only benefits and costs that can be assigned a monetary value are included in the benefit/cost ratio. The cost of repair of damage (adjusted for obsolescence and depreciation) is estimated and reflected in the benefit/cost ratio and score but consequential damage, eg from the loss of a water treatment works or electricity sub station, is generally not included, but examples are known where this stricture has been relaxed.

  1.4  The people score recognises that there are often impacts on those living in risk areas that are not reflected in the economic assessment. The focus is on impacts on people as a result of flood or erosion risk at their places of residence, rather than at their places of work. Ideally the basis of the population adjustment would be the number of residents affected but as this figure is difficult to obtain, the number of residential properties which have their risk of flooding significantly reduced by the proposed investment is used. An attempt is made to factor in vulnerability of communities at risk, based on a measure known as the "scale of economic deprivation", which ranks electoral wards on an assessment of a mix of economic indicators.

  1.5  The environment score is included to give greater priority to those projects that are expected to provide additional benefits to the natural environment. This includes the recognition that Government is committed to the promotion of Biodiversity Action Plan (BAP) targets, which include habitats such as grazing marsh, reed bed and salt marsh that may be created through appropriate flood and coastal management projects. This is intended to assist achievement of the target that all projects should, at least, maintain the status quo in habitat terms and should, where possible, provide environmental enhancement. Thus additional priority is provided for those projects that support national environmental policy by addressing national BAP targets as well as their primary defence.

  1.6  Further details on the applicability of the priority score system can be found at http://www.defra.gov.uk/environ/fcd/policy/grantaid.htm#psstudies.

  1.7  There is a general belief amongst practitioners, and those for whom the priority score system is a black art which has a profound but opaque effect on their efforts to manage flood risk—which includes the RFDCs—that a new approach is required. Defra have commissioned research on the subject the results of which can be accessed at: http://randd.defra.gov.uk/Document.aspx?Document=FD2013_2315_TSM.pdf. The work is attempting to use current thinking on multi criteria analysis (MCA) to update the priority score system. Defra and Environment Agency officials are in the best position to describe the current state of play in adopting the findings of this work, but from our participation in workshops devoted to the subject, it seems very unlikely that a wholly objective system can or will be devised.

2.  The broader issues of resource allocation

  2.1  From the above description and discussion it can be inferred that the Priority Score System, or any foreseeable development of it, will not remove the need for judgement in the allocation of resources. To be credible such judgements need to be transparent and open to challenge, at least during their formulation and preparation. Arguably they should also be open to subsequent review as part of a necessary learning process.

  2.2  It is clear that RFDCs, meeting four or five times a year, cannot hope to second -guess the detailed assessment of alternative uses of resources developed by a large cadre of full time officials, but they can and do help to formulate the total need for expenditure at regional level and challenge the subsequent proposed allocation of resources at both regional and national level, as outlined in the response to Q789. As argued there, we believe that this is both feasible and healthy, and compatible with the accountabilities of the EA Chief Executive and Board to Parliament and government, and of the RFDCs to the communities we are there to serve and represent.

  2.3  What then are some of the current issues? Is there an appropriate balance between expenditure on recurrent maintenance of assets (revenue) and capital expenditure for replacement of assets at the end of their useful life and new structures designed to increase the standard of protection? What revenue funded resources should be committed to control development, in the implementation of PPS25 and elsewhere? Flood risk mapping is revenue intensive, what priority should be given to that? What revenue and capital expenditure should be allocated to improving the quality of flood warnings (accuracy, reliability, specificity, timeliness) and what to increasing their uptake (numbers of subscribers to Flood Warnings Direct)? What is the correct balance between expenditure on policy and process development centrally and delivery in the Regions? What fraction of the total expenditure on measures to improve standards of protection should be spent on preparatory studies and strategy development and what on building the assets that deliver that protection? Defra ministers have made it clear that they expect multiple objectives to be delivered from investment in flood risk management. Some of these objectives stem from European Environmental Directives. What priority should be given to those? Many of these issues cannot be judged effectively on an annual basis, which is why we are pressing for a long term funding arrangement, from which effective strategies for all of the above can be prepared and implemented efficiently.

  2.4  From our oral evidence, the Select Committee will know that the RFDC chairmen as a whole have had the opportunity to review the planned expenditure for the coming financial year funded by Grant in Aid and after discussion have endorsed the executive's proposals. The final decisions on allocations will be made by the EA Board during February. Of course there are always small differences in opinion at the margin. Peter Ryder has expressed the view that improvements in the quality of flood warnings might be achieved, which is compatible with Pitt's Interim Conclusions 3 & 7 and Tim Farr has recommended a different approach to the deployment of demountable and temporary defences, which feeds into Pitt's Recommendation 3.

  2.5  There are other outstanding issues which exercise the RFDC Chairmen. These concern the acceptability and role of third party funding, eg from developers or public and private authorities. Should such contributions affect the priority score of capital flood alleviation schemes, through their reduction in the net cost to the public purse? There is an imperative throughout the Pitt review that flood risk management needs to engage a wider range of authorities and is not something that can be delivered effectively by any one central organisation. This is certain to require the effective pooling of resources and their agreed deployment; policies to govern these arrangements need to be put in place.

3.  The use of local levies

  3.1  Although reference was made in the response to Q778 to the local levy, we are not sure that the significance of this source of funding and the implications for resource allocation were made sufficiently clear. The vast majority of revenue expenditure and capital investment by the EA in England and Wales is now supported by a Grant in Aid from Defra and the Welsh Assembly Government. In 2008-09 this is expected to amount to £530 million of which £250 million is for capital expenditure.

  3.2  In addition regional committees have raised a further £27 million for use in 2008-09 through a levy on principal local authorities in their regions. The levy rate is agreed by each Committee separately and must have the support of a majority of their local authority members. As a result, the amount of levy and the rate at which it is set vary widely. The amounts raised by each English committee are set out in the table below:


Flood Defence Committee
Approved Levy
08/09 £k

Anglian Central
926
Anglian Eastern
1,670
Anglian Northern
1,473
Midlands
3,000
Northumbria
1,542
Yorkshire
778
North West
3,433
Southern
1,131
Wessex
3,015
South West
473
Thames
10,000
Total
27,441


  3.3  Local levy is typically invested in flood protection measures which are important to local communities but which do not achieve a priority score that is high enough to be funded from the national grant in aid. Although projects must be cost beneficial, the investment of local levy is otherwise entirely at the discretion of the regional committee, who generally exercise their collective judgment against a range of options. Because the sums involved are relatively small it is often necessary to accumulate balances to fund individual schemes, which requires forward planning and commitment. Some Committees are beginning to seek third party funding too.

  3.4  It may be helpful to illustrate the approach and implications with three examples:

    Improving the defences at Kilnsea

    The village of Kilnsea in east Yorkshire faces the imminent erosion of the coastal defences which protect it with a serious risk of flooding to houses in the village that would result.

    The economic case for realigning the defences at Kilnsea so as to protect the village is not good and it is difficult to justify spending money from the national flood and coastal defence budget, so the defences would probably be abandoned. When we looked in more detail, however, we concluded that we could carry out the work provided a significant part of the funding was raised by others, since even though no money would be available from national budgets we could use the resources from the levy raised by the Yorkshire Regional Flood Defence Committee to lever in resources from elsewhere.

    The offer of a £100,000 grant from local levy stimulated local residents who had formed the Kilnsea and Spurn Flood Defence Group to raise funds themselves and to seek further grants, and also brought a sizeable commitment from the East Riding of Yorkshire Council for infrastructure protection. These funds allowed the Environment Agency to go ahead and build a new earth flood bank in time for the 2006-07 winter storms. The Group has taken on the responsibility for managing the new defence, which will protect the village for a further 30 years or so and give the residents much needed time to plan their future.

    Completing the Flood Alleviation Scheme at Banbury

    Extensive rainfall during Easter 1998 on the Cherwell catchment caused flooding within Banbury to over 160 residential and 30 commercial properties. Banbury railway station was out of action for several days. The event was estimated to have a return period of 1:100 years. Upstream flood storage with online improvements in Banbury and a pumping station to take water away from properties during flood conditions will provide a 1:200 year standard of defence reducing the risk of flooding to 386 residential and 97 commercial properties.

    The pumping station was completed in 2003, but it proved difficult to obtain the land for upstream storage. Eventually CPO action became necessary and was approved by the Committee. A Public Enquiry was called and was due to take place in September 2006. However, the priority score for the scheme was 16.9 at a time when the threshold for Grant in Aid funding had risen to the mid twenties, so funding could not be assured and the Public Enquiry had to be abandoned.

    Alternative funding options were explored. Cherwell District Council has agreed to contribute £2 million and to seek a similar sum from business in the town. On this basis the Committee has resolved to commit £9.7 million over four years from the local levy to enable the scheme to be built. This is almost a quarter of the expected levy over that period which shows very significant solidarity from the local authorities in the Region, which include the London Boroughs as well as upstream authorities out to the Cotswolds The Public Enquiry will restart in 2008-09. Banbury railway station and several commercial properties flooded again in Summer 2007.

    Breadth of Local Levy's Impact

    In the Midlands region, there have been many examples in recent years of schemes that have brought a range of benefits. On the River Maun at Mansfield a collapsing culvert was opened up and an attractive, natural and flood-friendly watercourse created in partnership with the County Council, in front of whose offices the work was needed and by whom it was undertaken. At Coleshill in the West Midlands an old quarry adjacent to an industrial area produced an environmental improvement at the same time as offering a substantial reduction in flood risk. Local Levy has helped to fund the provision of temporary defences (at Beale's Corner, Bewdley and Upton-upon-Severn), a recent development in which the Midlands region has been pioneering creative solutions to flooding issues and expanding the flood risk management options available to the Environment Agency. The scheme at Newark that is currently getting off the ground will bring much needed third party financial contributions into the arrangements, allowing a project that might otherwise have remained unfunded and thus un-started to happen.

    The Midlands region's programme for 2008-09 will cost approximately £3.5 million, and will be applied to flood vulnerable locations at Worcester, Ashbourne, Long Itchington, Burton Joyce, Gunthorpe, Radcliffe-on-Trent and Newark. Approximately 788 properties will be better protected or prepared as a result of this expenditure, including approximately 50 houses (in the second year of a three year rolling programme) at Trentside villages downstream of Nottingham that suffer repeated regular flooding where conventional methods of flood risk management are unlikely to be cost beneficial.

4.  Internal Drainage Boards

  Internal Drainage Boards ("IDBs") exist primarily for the drainage of agricultural land and only extend over low-lying areas of land that require this function. There are 160 individual IDBs at present, covering substantial areas of eastern England and running inland from the south, south-eastern and south-western coastlines. Defra has recently launched an initiative to concentrate these IDBs into 22 sub-catchment groups (see attached map).[2]

  The responsibility for land drainage of IDBs is confined to Internal Drainage Districts ("IDDs"), which are defined in a document of many years standing known as "The Medway Letter", and which is based on a formula derived from worst known flooding events (of no particular date or specification) and for rural areas an additional eight feet in elevation from that line.

  Many IDBs remain fundamentally unchanged in functional structure from the 1930s and earlier. There is a strong body of opinion that the change recently initiated by Defra is overdue, and ought to be undertaken on as broad a basis as possible to improve the integration between land drainage and flood risk management, particularly in relation to updating the IDDs and the definitions contained in the Medway Letter.

5.  Self Help

  It is to be noted that in the village of Woodborough, Nottinghamshire during the June flood event, one of the householders in the flooded area had the foresight to acquire Floodguard to block his doors and vents against the waters. His was the only house not to be inundated in the flooded area and demonstrated the viability of such flood defence products and the potential for their application by householders in certain circumstances.

  6.  If further explanation on this evidence and our oral responses to questions asked on 23 January please let us know.

Tim Farr (Midlands RFDC)
Peter Ryder (Thames RFDC)
Jeremy Walker (Yorkshire RFDC)
Chairmen of Regional Flood Defence Committees in England

February 2008







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