Flood Risk Management in England - Public Accounts Committee Contents

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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© Parliamentary copyright 2012
Prepared 31 January 2012