Examination of Witnesses (Questions 80-99)
ENVIRONMENT AGENCY
27 JUNE 2007
Q80 Mr Bacon: Presumably the two,
that chart on the bottom right-hand corner and this, should add
up to £483 million, because that is what the Report says,
should they not?
Dr King: There are other sources
of income.
Q81 Mr Bacon: You sent a document
to the regional flood defence committees recently in which you
said, and I quote, "Our planning assumption is that our resource
settlement over the next three years will be flat cash in line
with our current 2007-08 baseline (a real-time reduction in funding)
with any growth limited to capital investment". Is that still
your planning assumption?
Baroness Young of Old Scone: It
is indeed our planning assumption until such time as we get an
outcome from the Comprehensive Spending Review.
Q82 Mr Bacon: So you are hoping and
expecting that you will do well out of the Comprehensive Spending
Review, but until such time, that is your planning assumption.
Baroness Young of Old Scone: We
felt it was the safest assumption to go forward with.
Q83 Mr Bacon: So your budget now
is what, £500 million?
Baroness Young of Old Scone: Yes;
or thereabouts.
Q84 Mr Bacon: When the secretary
of state yesterday, at column 166, said that it was £615
million. What was he referring to?
Baroness Young of Old Scone: I
suspect he was referring to expenditure on flood risk management
and on coastal management which currently is funded with local
authorities.
Q85 Mr Bacon: Just through local
authorities?
Baroness Young of Old Scone: Yes
and I suspect there may well be some funding in that amount for
some central Defra functions as well. I am not entirely sure what
he was quoting there. We can certainly try to rationalise that
for you.
Q86 Mr Bacon: If there are various
sources of funding, a clear note that sets out in a chart where
they all come from and what they all add up to so we know what
we are talking about. Could you also, within that, specify capital
expenditure, maintenance expenditure and new expenditure and do
it for each of the last five years and what your planning assumptions
are going forward?[8]
That would be great. Could I ask about the administrative cost
of £64 million, which it says is 14% of the total? 14% sounds
quite high. Can you briefly say what administrative costs cover?[9]
Baroness Young of Old Scone: Administrative
costs cover a number of functions both nationally and regionally.
At the regional level they cover regional and area support staff,
human resources, finance, legal facilities, accommodation, with
costs of supporting our flood risk management committees, which
are the not quite democratic but para-democratic process, and
support services. At national level they cover our flood risk
management policy and process costs, our computing costs, overheads
of our head office and also national centres as well as our national
corporate costs of running a board and paying me and things like
that.
Q87 Mr Bacon: Which obviously adds
considerably to the total cost!
Baroness Young of Old Scone: Absolutely;
hugely!
Q88 Mr Bacon: Can you just remind
us what the total number of staff employed by the Agency is?
Baroness Young of Old Scone: It
is just under 13,000 at the moment.
Q89 Mr Bacon: How many of those work
in the HR department?
Baroness Young of Old Scone: We
have recently benchmarked our HR function and it benchmarked very
well against external benchmarks.
Q90 Mr Bacon: Do you know how many?
Baroness Young of Old Scone: About
200 I think.
Q91 Mr Bacon: I just have a figure
in my mind that the Immigration and Nationality Directorate with
14,000 staff employed 540 in HR, so if you are on 200, you are
doing quite well.
Baroness Young of Old Scone: We
compare very well with external commercial benchmarks.
Q92 Mr Bacon: Is it possible you
could send us a note with a detailed breakdown of the costs you
have just been describing, the administrative costs?
Baroness Young of Old Scone: Yes,
indeed.
Q93 Mr Bacon: That would be very
helpful. Could I ask you to turn to page 5 where it describes
in paragraph 4 and I quote "The Agency has not met its target
to maintain 63 % of flood defence systems in target condition"?
Could you just briefly explain what is "target condition"?
What is meant by the phrase "target condition"?
Mr Kersley: We assess a preferred
condition that we would like our assets to be at and that is informed
by our science R&D programme that basically finds the optimum
point between the costs of maintaining the fabric condition of
an asset and the risk of its failure.
Q94 Mr Bacon: So "target condition"
means optimum condition, preferred condition?
Mr Kersley: Yes.
Q95 Mr Bacon: But your target is
not to have all your assets in their target condition, it is only
to have a percentage, in this case 63% of your assets, in their
target condition. That is right, is it not?
Baroness Young of Old Scone: Our
target is a progressive one in that over successive years we would
aim for a higher target.
Q96 Mr Bacon: Presumably, if it is
your preferred optimum condition, you would aim for 100%, would
you not?
Baroness Young of Old Scone: We
would aim for 100%.
Q97 Mr Bacon: Budgetary restrictions
stop you.
Baroness Young of Old Scone: Our
estimate is that in order to be able to break the backlog of poor
condition, and we do have a backlog of poor condition which we
have inherited, we would need £150 million a year to do so.
We do not think it is realistic to set a 100% target at a time
when we are not likely to have a hope in hell of completing it.
Q98 Mr Bacon: So your estimate is
that you want £150 million extra a year, but you did say
in answer to an earlier question that you have not asked for an
extra £150 million a year yet.
Baroness Young of Old Scone: We
have asked for a settlement under the Spending Review which is
primarily focused on capital but inevitably in our allocation
we look at what is the most cost-effective investment strategy
and increasingly, as we know our assets better and we have a better
asset management process, we can take a judgment as to whether
we get a better bang for our buck from a maintenance investment
or a capital investment.
Q99 Mr Bacon: A couple of weeks ago
when the Committee visited a couple of Environment Agency assets,
the people showing us around talked about temporary and demountable
barriers. In paragraph 3.14 there is reference to that in various
places including in Worcester where barriers were purchased. I
remember reading some years ago how delighted the folk of Worcester
were that they were to get these temporary barriers. How much
does it cost in the case of a city like Worcester to get temporary
barriers set up and available or demountable, whichever they are,
available? Do you know what was spent in that case? Do you have
a rough idea?
Dr King: We do have the figures,
though I am not sure whether we have them here. It is important
to differentiate between demountable barriers and temporary barriers.
Demountable barriers are highly engineered aluminium structures.
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