Future Flood and Water Management Legislation
Memorandum by the Association of British Insurers (FFW 18)
The UK insurance industry is the third largest in the world and the largest in Europe. It is a vital part of the UK economy, managing investments amounting to 24% of the UK’s total net worth and contributing the fourth highest corporation tax of any sector. Employing over 275,000 people in the UK alone, the insurance industry is also one of this country’s major exporters, with a fifth of its net premium income coming from overseas business.
Executive Summary
Unlike in many other countries, flood cover is standard in property insurance in the UK. However, for this to continue, steps must be taken to manage the rising flood threat better. Around five million properties in England, amounting to around one in six homes, are at risk of river, sea or surface water flooding. 500,000 properties are at ‘significant’ (greater than 1 in 75 years annual probability) risk, and this will rise by a further 350,000 by 2035 unless steps are taken now.
The Flood and Water Management Act is a vital step towards better protection for homeowners and businesses in the UK, from the rising threat of sea, river and surface water flooding. The Act fulfils part of the agreement in the 2008 ‘Statement of Principles’ between the ABI and the Government.
The Act is an important first step, and we do not believe that further legislation is now required as a priority. However we do believe that a number of ‘gaps’ remain and there is a need for:
·
Binding targets for reducing the numbers of properties and businesses at significant flood risk, and for the Environment Agency to report against these.
·
Local Authorities to be held accountable for the delivery of their local flood risk management plans.
·
More work to identify and provide information and assistance to those at high risk.
·
Communicating flood risk to the public and insurers better, in a convenient administrative format before the need to do so under the EU Floods Directive by the end of 2013
·
Sewerage companies to be consulted about new developments, before planning permission being given, to confirm the capacity of their system to adequately drain water from the development and surrounding properties.
·
Understanding any barriers to the uptake of resilient repair of flood-damaged properties better.
The Act is an important step, but now it is vital that the Government puts in place a credible long-term investment strategy for flood defence expenditure, to protect properties to a minimum standard.
Responses to the questions asked by the Committee
Q 1: Which of the key issues covered by the consultation into the draft Flood and Water Management Bill and by the Walker and Cave reviews should be taken forward as legislative priorities?
1.
The ABI does not believe that any further legislation is necessary, but we do need to ensure that the proposals in the Act are implemented effectively on the ground, and that continuing efforts are made to understand and model flood risk better.
2.
The Act sets out the foundation for a much-needed long-term flood risk management strategy, and this should be fully implemented without delay. Many of the proposed measures in the Act will require additional funding, in particular for Local Authorities. Government needs to ensure that sufficient funding sources are available to finance Local Authorities’ new powers and responsibilities as part of a long-term funding strategy. The ABI welcomes the Environment Agency’s work on the long-term investment strategy to date. Now the Government needs to respond by setting out its long-term strategy as soon as possible.
Q2: Which further policies are required to ensure flood and water management delivers optimum social, economic and environmental outcomes.
3.
The most efficient way to avoid creating new flood risk is to stop developing high flood risk areas. If development is necessary in these areas, higher minimum standards should be applied to buildings constructed, including design features to protect against flood water and minimise damage should water enter the building. Applying the routine national standards is insufficient in high-risk areas. Developers should be strongly encouraged to strengthen community resilience to flood risk by following the guidance in the ABI leaflet on Insurance Issues for New Developments.
4.
In 2006, the ABI welcomed the introduction of Policy Planning Statement 25 that was intended to strengthen and clarify policy on developments and flood risk. While it appears to be working in most areas, further work is needed to spread best practice amongst all Local Authorities, and to ensure that increased ‘localism’ does not lead to any increase in unwise developments in high-risk areas. This is particularly relevant in terms of surface water flood risk where the level of understanding has traditionally been low. Recent EA work has improved understanding of this risk. It is crucial that, where relevant, LAs further develop their Level 2 Strategic Flood Risk Assessments to ensure surface water flood risk is properly considered in the planning process.
Q3: Any issues related to the Flood and Water Management Act 2010 (including sustainable drainage systems (SUDS) and the transfer of private sewers and lateral drains)?
5.
The Act puts in place a framework identifying accountabilities for managing flood risk. We are pleased that the Environment Agency (EA) has now a clear national overview role and that Local Authorities have a clear responsibility for identifying and tackling surface water flooding.
6.
There remain some gaps in the Act that we urge the Government to address (further details in attached Annex):
A.
Targets
7.
The ABI believes that there is a need for binding targets for reducing the numbers of properties and businesses at significant flood risk, and for the Environment Agency to report against these.
8.
At the very least, we would like a statement from the Government of their vision for managing flood risk in the future.
B.
Independent public scrutiny
9.
It is important to empower local communities to hold their Local Authority to account and ensure they are delivering on their local flood risk management plans. Otherwise, the local community may only be aware their local authority is not managing flood risk effectively when they are flooded – this is too late.
10.
The ABI recommends an independent body has responsibility for auditing Local Authorities’ performance against flood risk management plans and making this information publicly available. The Environment Agency is best placed to do this.
C.
Identifying and helping people at high flood risk
11.
The EA and Local Authorities should liaise with all homes and businesses that they do not expect to be able to protect to below significant flood risk levels, to ensure that they are all aware of the significant flood risk they face and the options open to them.
12.
Local Authorities should be empowered to provide and co-ordinate free property-level flood risk surveys, and provide support for homeowners and businesses willing to modify their property to make them more resistant and/or resilient to flooding.
D.
Effectively communicating flood risk
13.
It is critical that Government publish and effectively communicate flood risk in line with the EU Floods Directive by December 2013. This means publishing Flood Hazard and Risk maps for all forms of flooding (with preliminary flood risk assessments due by December 2011). The ABI would like to see significant steps made in communicating this information well before being compelled to by EU legislation.
14.
A similar situation exists for plans to deal with flooding, which must be published by December 2015.
E.
Sewerage and new property development
15.
The ABI believes that sewerage companies should be consulted about new developments, prior to planning permission being given, to confirm the capacity of their system to adequately drain the development and surrounding properties.
F.
Resilience
16.
The ABI appreciates Government efforts to facilitate resilient repair in the future, but believes more work is needed to understand how to achieve this best, the cost implications for customers, and how homeowners will feel about being required to repair their home in a particular way.
ANNEX: Full Detail on the Six Issues Related to the Flood and Water Management Act (2010)
A. Targets
The ABI believes that, as in the Climate Change Act, the Act should set legally binding targets for reducing the number of properties and businesses at risk of flooding, and a requirement for the Environment Agency (EA) to report against these.
At the very least, we would like a statement from the Government of their vision for managing flood risk in the future, particularly on what they regard as acceptable levels of homes and businesses at flood risk and how delivery of flood protection measures can be monitored.
B. Independent public scrutiny
It is important to empower local communities to hold their Local Authority to account and ensure they are delivering on their local flood risk management plans. Otherwise, the local community may only be aware their local authority is not managing flood risk effectively when they are flooded – this is too late.
The ABI recommends an independent body has responsibility for auditing Local Authorities’ performance against flood risk management plans and making this information publicly available. The Environment Agency is best placed to do this.
C. Identifying and helping people at high flood risk
The EA and Local Authorities should liaise with all homes and businesses that they do not expect to be able to protect to below significant flood risk levels, to ensure that they are all aware of the significant flood risk they face and the options open to them.
Local Authorities should be empowered to provide and co-ordinate free property-level flood risk surveys, and provide support for homeowners and businesses willing to modify their property to make them more resistant and/or resilient to flooding.
D. Effectively communicating flood risk
It is critical that Government publish and effectively communicate flood risk in line with the EU Floods Directive by December 2013. This means publishing Flood Hazard and Risk maps for all forms of flooding (with preliminary flood risk assessments due by December 2011). Those in relation to river and coastal flooding are to be based on NaFRA. Those for other forms of flooding are to be based on the Strategic Flood Risk Assessments produced by Local Authorities.
The ABI would like to see significant steps made in communicating this information well ahead of being compelled to do so by EU legislation. We have indicated our willingness to work with Government bodies to ensure that this information can be provided directly to insurers in a convenient administrative format, so that insurers can take account of it within their systems as soon as possible, thereby ensuring that the public can access flood insurance on the best possible terms, but we are concerned at the lack of progress on this.
A similar situation exists for plans to deal with flooding, which must be published by December 2015. Many of these plans - such as Catchment Flood Management Plans and Shoreline Management Plans - already exist but are not properly communicated to the public. Surface Water Management Plans are less well developed but many should be available well before 2015. Again we would like to see much more effective communication of this information to the public and insurers well ahead of the timetable set by the EU.
E. Sewerage and new property development
During the Bill consultation we welcomed the proposed end to automatic connection and the clear role of water companies in the planning process. This needs to be taken forward. Although planning documents may provide advance warning of development needs for sewerage companies, we feel that they should be consulted before planning permission is given, to confirm that the capacity of their system can be increased to effectively drain the development without reducing the capacity to effectively drain any other properties below the acceptable design standard.
F. Resilience
The ABI appreciates Government efforts to facilitate resilient repair in the future, but believe more work is needed to understand how best to achieve this, to understand the cost implications for customers, and how homeowners will feel about being required to repair their own home in a particular way. To inform our work on how to promote property-level flood protection and flood resilience the ABI conducted a research project into the cost of resilient repair resulting in a guidance document published in co-operation with the Environment Agency, the National Flood Forum and the Chartered Institute of Loss Adjusters. This guide is intended to encourage flooded customers to discuss their options with their insurer and loss adjuster.
October 2010
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