1 Expenditure on flood protection
1. The Government regards flood risk management as
a national priority. Currently some 5.2 million properties are
at risk of flooding from rivers, the sea or surface water.[2]
In recent years the annual cost of flood damage is estimated to
be at least £1.1 billion and this is set to rise due to ageing
defences and climate change. In 2010-11 the Department for Environment,
Food and Rural Affairs (the Department) spent £664 million
on flood and coastal risk management, 95% of which went to the
Environment Agency (the Agency).[3]
2. The Agency estimated in 2009 in its long-term
investment strategy that expenditure on flood defences needed
to increase by £20 million every year from 2010 to 2035 to
sustain current levels of protection as risk increases due to
climate change.[4] This
means that the Agency's budget would have needed to rise by 9%
during the current spending review period (2011-12 to 2014-15).
But levels of central government funding to the Agency have been
reduced by 10 % between 2011-12 to 2014-15.[5]
3. The Agency told us it had committed to 15% efficiency
savings which meant that planned levels of flood protection would
be achieved despite the reduction in its budget.[6]
Savings would be delivered through more effective working and
reductions in contract costs, rather than reductions in the scale
of the protection programme.[7]
4. The Agency has not adjusted its long-term investment
strategy in the light of these planned efficiencies. The Agency
told us it had just established a project to review its long-term
investment strategy, but it did not know what the scale of the
long-term funding gap would be.[8]
5. The Department has developed a new approach to
encourage more funding from local sources including private companies
and from local authority levies.[9]
The Agency has identified £43 million of external funding
for the current spending review period, but none of this has been
contractually agreed.[10]
In the previous spending review period only £13 million of
the national flood protection programme was funded by local contributions.[11]
6. We are sceptical about how much the Department
can rely on funding from local sources when local authorities
are balancing more pressing needs. The Department told us that
it did not expect all local authorities to raise additional funds,
but it did not have a clear plan setting out the extent to which
additional local funds would replace funding previously provided
nationally.[12]
7. In addition, more complex partnerships and funding
agreements may mean schemes take longer to put in place and may
cost more to develop. For example, legal costs are likely to increase
when negotiating individual agreements. The Agency was aware of
this risk and was committed to monitoring the impact of the new
arrangements in the future.[13]
2 C&AG's report, para 1.1 Back
3
C&AG's report,paras 1 & 2 Back
4
C&AG's report, para 1.4 Back
5
C&AG's report, para 3 Back
6
Qq 5-10 Back
7
Qq 6, 52 - 55 Back
8
Q 56 Back
9
Q 11 Back
10
Q 16, 25 Back
11
C&AG's report, para 3.15 Back
12
Qq 11- 14 Back
13
Q 26 Back
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