UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 970-i

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Environment, Food and Rural Affairs Committee

Flood Funding

Wednesday 6 February 2013

COUNCILLOR Andrew Cooper and Richard Wills

Henry Cator, Dr Jean Venables and Ian Moodie

Evidence heard in Public Questions 1 – 88

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Oral Evidence

Taken before the Environment, Food and Rural Affairs Committee

on Wednesday 6 February 2013

Members present:

Miss Anne McIntosh (Chair)

Thomas Docherty

George Eustice

Barry Gardiner

Mrs Mary Glindon

Neil Parish

________________

Examination of Witnesses

Witnesses: Cllr Andrew Cooper, Deputy Chair, LGA Environment and Housing Board, and Leader Green Group, Kirklees Council, and Richard Wills, Executive Director for Communities, Lincolnshire County Council, gave evidence.

Q1 Chair: Order, order. Good afternoon and welcome. Thank you very much indeed for agreeing to participate in our inquiry on flood funding. You are both extremely welcome. Could I please just ask you to give your names and positions for the record?

Cllr Cooper: I am Councillor Andrew Cooper. I am Chair of the Local Government Association’s Inland Flood Risk Working Group.

Richard Wills: I am Richard Wills. I am Executive Director with Lincolnshire County Council and Chair of the LGA’s Inland Flood Risk Officers Group.

Q2 Chair: Just as an opening question, could I ask what the relationship of flood funding is to other items of your budget expenditure? Is it ring­fenced?

Cllr Cooper: No, there is no ring­fenced funding for flooding. It is for local authorities to determine how that money is best spent. However, it is fair to say that you would not expect that money to go elsewhere without a certain amount of public scrutiny. It is un­ring­fenced.

Q3 Chair: Do you believe that the Government is being as ambitious as it might be in terms of extending flood funding to protect a large proportion of the up to 5 million properties now at risk of flooding?

Cllr Cooper: If you look at the amount of money that is provided for funding, we have recently had £120 million of additional funding put forward for flood defences. About £60 million of that £120 million was for shovel­ready projects that were already in the pipeline, so you are talking about roughly £60 million. Looking at an example such as Runnymede, to do the flood defences for the Runnymede area would require about £200 million. The scale of the problem is huge, and the amount of the funding that is given is not sufficient.

In terms of projects that we have got lined up or programmed, these will cover about 10% of the properties that are at flood risk. What we have got programmed is certainly not going to cover all of those properties that are required. We are at about 10% of what should be covered.

Richard Wills: It is fair to say, Chairman, that the demand will always exceed supply. That goes for all public sector infrastructure.

Cllr Cooper: Of course, we also have the issue of climate change. As climate change begins to bite, the likelihood of these events continuing will be that much greater.

Q4 Chair: Would you say that the funding recognises the new threat of surface water flooding? Certainly in my area, this seems to have posed a much bigger threat since 2007 and in particular during last year. Do you think that the funding reflects that as a new risk of flooding?

Cllr Cooper: Partnership funding as exists can be directed for that purpose. Of course, the funding that comes with that requires additional funding to come from other places. We do not get 100% funded schemes any more. To a certain extent, we have to look around for either local authority funding, which will have an impact on other areas, or private sector funding if that money is available. You get an awful lot of areas where there are simply not the businesses or the funding there to do that.

Richard Wills: It is interesting that, since 2007, local authorities and local communities have been more willing to put money into the pot. If you remember, Gloucestershire County Council got its residents to agree to a higher council tax rate immediately after the 2007 floods. I think there is recognition from local communities that more money does need to go into flood defence.

Cllr Cooper: Having said that, you can, for example, look at a high street in a town that could be prone to flooding. If you have got small businesses there-say, a small coffee shop that may be family­owned, that sort of property-it would be very difficult for that sort of business, which may be running at the margins, to actually put money into such a partnership funding project. If you have a business from a national chain like Starbucks, or something like that, they have greater access to funding than small businesses do. If you look at Hebden Bridge, for example, those are all generally small shops that are independently owned.

Q5 Chair: The Government is only intending to help some of the 145,000 properties deemed to be at most significant risk of flooding. Do you think that that adequately reflects the concerns and views of the local communities that you represent?

Cllr Cooper: It would be very easy to say that, of course, it does not. As I have mentioned, as you look at the size of the problem and the size of the funding required, that clearly is not being met by the funding that is being made available.

Q6 Chair: The Government announced in November an additional £120 million to be made available for flood protection schemes over the next two years, which will be capital expenditure. Is there a revenue implication for that?

Cllr Cooper: There is. Of course, once flood defences of whatever nature go in, they will require maintenance and they will require maintaining over a period of time. That funding does not come with this, and therefore we do not have the money to do that. Where are the revenue costs going to fall? It is going to hit local authorities. Local authorities, as we know, are taking the brunt of public sector cuts. We have had additional cuts that have come through over this coming finance round, in addition to the ones that we have already had. Therefore, the question is where does that money come from? What does not get funded because we do not have the funding to maintain flood defences? Of course, there are some very difficult choices that councils have to make.

Richard Wills: There is another aspect to the restriction on revenue funding, which is this: how do you fund your repayments for any borrowing? Most local authorities are actually signed up to the concept of partnership funding and are willing to do that. My own authority is putting £6 million into two schemes as part of partnership funding; indeed, the district council and the town council are putting in money as well. However, the question is twofold. Firstly, schemes need preparation, and generally speaking that has to be charged against a revenue account. You cannot charge that to a capital account until it is ready to be built, so if there is a restriction on revenue funding, you may not be able to prepare schemes in the future. Then, of course, if you are going to take out a mortgage-as it were-to build a capital project, you need some sort of growth in your revenue stream in order to take out new borrowing. There will be restrictions for some local authorities who may be willing, in theory, to add money to the partnership funding. If they cannot borrow their share because of revenue restrictions, then that could be a problem in future.

Cllr Cooper: There is another key area that I would like to expand upon, which is whether the schemes follow the money, as opposed to following the need. It may well be that the schemes go where partnership funding is available, and that might not be the best use of that money. It might be better used in places where there simply is not that resource available. That is one of the tricky things with partnership funding: councils welcome it, but there are issues associated with it.

Q7 Chair: We will come on to partnership funding. Can I just be clear in my own mind? Is the £20 million a year the figure that the Government spends on maintenance? That is the figure that I have heard the Minister quote.

Richard Wills: I am not aware of that.

Cllr Cooper: That is not a figure that I have heard.

Q8 Chair: Obviously, this additional money that was announced last November is welcome. Would you like to see it extended over a period beyond the next two years, into the next spending review?

Richard Wills: The £120 million could be said to replace money that was cut, of course. We have got back to a level of expenditure that the EA had prior to the last comprehensive spending review. It is most certainly welcome, but both we and the Environment Agency would probably say that we would have liked to have had more money. In the view of most local authorities, certainly, they have got schemes that would be beneficial. Of course, the Environment Agency’s own figures say that there is about an 8:1 ratio of benefits to costs for flood risk management schemes, so they do offer tremendous value for money. Therefore, I think there is a question for Government to consider the balance of how it spends its limited resources, and whether it might get better value for money from flood risk capital schemes than other capital schemes.

Cllr Cooper: The recognition of that would be helpful.

Q9 Chair: Would you say that such spending also contributed to economic growth, and could you give us examples?

Cllr Cooper: It certainly contributes towards economic regeneration and it is a way of getting people involved in the construction sector. The Government does seem to be looking at housing as almost a one­trick pony to stimulate the economy, but if you look at things like flood defences, they preserve existing housing and help it in that way. It is a good use of money, particularly when you have got a depressed construction sector, if construction is the area that you would be looking at.

Richard Wills: There are certainly places that are developing their local plans now that will probably need investment in flood risk infrastructure if they are to enable growth to take place. That is something that many local authorities are looking at as part of their planning process at the moment.

Q10 George Eustice: It is clear there is now a big onus on local authorities to take the lead on some of these flood schemes. What sort of oversight is there of the work that they are doing, or how much they are spending or not spending? Does the Environment Agency come along and chivvy councils that they do not think are taking the threat seriously enough and shake them down for money? Does Defra have some kind of communication with councils on this, or are they pretty much left to their own devices?

Cllr Cooper: I would not regard the Environment Agency as having an oversight role. It is very much a partnership that we have with the Environment Agency. It is quite a positive relationship that we have. Obviously, there are issues from time to time, but where the Environment Agency advises local authorities on the use of money and where it should be spent on projects, planning and those sorts of things, generally 99% of these recommendations are accepted in relation to planning. It is a good relationship.

In terms of oversight, we know the areas at risk. Those are well mapped. There is some new work being done by the Environment Agency to look at surface water issues, particularly in terms of mapping. The information is getting better all the time so that we can better target our resources.

Richard Wills: There are some encouraging examples developing around the country. I suppose I know Lincolnshire best. We are working very closely with the Environment Agency, internal drainage boards and district councils. We now operate a common works programme. We have not actually pooled our budgets but we are working out how we can get best value from the budgets we have. In Lincolnshire, for example, we are sharing our aspirations for improvement and then making sure that we are complementing our expenditure to get the maximum benefit. Other local authorities are doing similar things. I suppose that the clue is in the word "local": every local area will probably develop its own partnerships. There is certainly public scrutiny of money, and most of us have set up flood scrutiny panels, which now have a number of organisations on them.

Q11 George Eustice: I wanted to pick up on something that Councillor Cooper said earlier, which was regarding the danger of projects following the money rather than following need under this system. I think that was how you put it. Is there a need to redesign the way that funds are allocated to prevent that happening?

Cllr Cooper: With limited resources, there is certainly a need. In a lot of ways we are at the beginning of this, and we are going to have to scrutinise what happens and what does not happen. One of the early indications is that generally the partnership funding will go where it affects people and where actual householders are affected. Hebden Bridge is again a classic example of where it has generally shops and small businesses have been affected. That, having been flooded three times in the last year, is obviously of huge concern to them. They might not necessarily be assisted under partnership funding. There are similar issues with agricultural land. I am sure that you will hear evidence from farmers a little bit later, but agricultural land and that sort of business may well not receive partnership funding either because they would not be regarded as a priority.

Q12 George Eustice: Going back to that point, I think that one council floated the idea of a flood risk management pot of money held nationally that councils bid into. They would be judged based on the strengths and the benefit-cost ratio of their scheme, rather than by how much matched funding they have got to go with it.

Cllr Cooper: That would make sense. If we are looking at issues of need, as opposed to where the money goes, having something to fall back on would give you the flexibility to do that. When you are looking at issues of insurance and insuring areas that may be prone to flooding but might not necessarily get the funding, that would make an awful lot of sense. It would be a good suggestion, I would think.

Q13 George Eustice: Would you accept, though, that there still needs to be some sort of local stake in the scheme? Councils have always got somewhere else to spend their money, but if part of the aim is to get them to take a responsibility, they need to put some money down. How do you get the balance right between getting the councils to take responsibility versus making sure that the most important schemes get funding?

Cllr Cooper: Councils are democratically elected bodies. We are responsible to our electorate, and if we were not doing the right thing regarding citizens and flooding, the people would be rightly making an awful lot of fuss. Councils should respond to that. I am not aware of issues where people are upset about councils: they are upset about the lack of funding, and the funding requirements there. With limited resources, councils do the best we can with the funding we have.

Richard Wills: There may be a question about what happens in extremis, when you have a flood event. A small local authority can suddenly be overwhelmed by the costs associated with that, and the Bellwin Scheme does not really cover the costs adequately. There may be a case for having a national pot of money somewhere to help with the aftermath of schemes, particularly in terms of capital infrastructure, as opposed to the revenue consequences of just tidying the place up.

Cllr Cooper: Bellwin is a classic example. You will hear of flood events, and you will hear Ministers saying, "The Bellwin scheme is going to come in here, and national resources are going to flood down"-for want of a better term-"to help a local area." Taking Calderdale as an example, when the events happened three times in one year to them they reckoned that the impact of that on council budget was about £2.5 million. For Bellwin to take effect the impact has got to be more than 2% of your council’s annual budget. Of the eight councils that put themselves forward under the Bellwin scheme, only three councils out of those qualified. They did not qualify for all of the funding, because Bellwin does not cover all costs. Of the £2.5 million that Calderdale had to pay out, Bellwin paid about £86,000. Therefore, to a large extent, that £2 million is coming off the council’s bottom line. It is coming off local services and local people. It is, effectively, a flood tax on councils. Bellwin is unfit for purpose for a lot of those councils. It needs reviewing in terms of what it does; "how useful Bellwin is" is one of the areas that this Committee could look at in more detail.

Q14 Neil Parish: That leads me quite neatly into my question, because I have got the Bellwin scheme here. You have recommended that the Bellwin scheme be revised, such that capital expenditure on repairing infrastructure such as roads damaged by floods becomes eligible for additional central Government support. What is your estimate of the additional cost to the Treasury of such an approach? If you take the roads down in Devon, for example, some of them have virtually been washed away, especially when you get off the B roads and onto the C roads. Some of them largely do not exist, and I am not exaggerating. Have you got any idea, or a guesstimate, of the cost?

Cllr Cooper: It would vary from council to council. It would be wrong of me to come up with figures for particular councils. It would be significant. Then again, those significant costs-if they fell on the council-would have a detrimental impact on essential services. That is the thing to take away from this.

Q15 Neil Parish: One benefit, taking Devon County Council as an example: if you were actually to add in the cost of repairing these roads, it would not take you long before you would get to 2.5% of Devon County’s budget. It is a case of whether we look at when it cuts in, or probably it may be best looked at as "what Bellwin covers"; I think that is what you are saying.

Cllr Cooper: That is very much what we are saying.

Richard Wills: Devon actually estimated that the floods they had had cost £5 million, or did £5 million worth of damage to Devon’s roads. Calderdale was about £1 million; South Tyneside was £2.4 million; and Newcastle estimated £7 million to £8 million. We are talking about big sums of money that are, in themselves, a very high proportion of the total highways budget that most of those councils would have.

Cllr Cooper: Also, investment in flood defences in the first place might alleviate some of those costs. Prevention work is another thing to look at.

Q16 Neil Parish: There is a little bit of a sting in the tail in my next part of the question. Naturally, central Government and local government have played ping­pong for years with each other, but the answer is you want more money. The Government says that it has not got more money. You are saying that you want more money from the Treasury for Bellwin to cover the roads: what are you going to cut back?

Cllr Cooper: What are councils going to cut back?

Q17 Neil Parish: No, what generally do you want to see the Treasury cut back? If it is coming from the Treasury, we can open it up to the Treasury if we want, not just to the councils.

Cllr Cooper: If you are asking me what Government should cut back, I can give you a huge list.

Neil Parish: Feel free.

Cllr Cooper: These are very personal things as to what you believe should be cut back, aren’t they? These are only personal opinions of mine, but I would say to cut back on prestige projects such as HS2 and get the basics right, such as council services. I would say cut out funding for Trident missiles; I would say get rid of that. These are, of course, my opinions. You have asked for those, and I am quite happy to give them. Government is about choices.

Neil Parish: I think that you made a good point earlier, when you said that growth can be created-especially in the construction sector-by repairing, as well as building, new roads or new houses. I think that is a relevant point.

Richard Wills: As an official, of course, I would not dream of offering a political opinion.

Neil Parish: You had probably better not.

Richard Wills: As a technical observation, the budgets you are talking about are very small in terms of Government’s total expenditure. A 1% efficiency saving in the health budget, the social care budget and the education budget yields £4.5 billion.

Neil Parish: The trouble is that they are wanting more.

Q18 Chair: Have you estimated what the cost to the Treasury would be of the additional funds that you are seeking for Bellwin?

Richard Wills: We have not done that calculation yet. We have got examples of what it is costing individual councils, but we have not got a comprehensive view yet. It is something that the LGA is trying to seek, so when we have got it we can certainly share it with you.

Q19 Neil Parish: So you are going to give it to us in writing?

Richard Wills: We can certainly share what we have got, and we can tell you where the gaps are.

Neil Parish: Thank you very much.

Q20 Chair: We are about to move on to partnership funding. Just before we do, could I just ask: in 2007, I think, Hull and Gloucestershire did have money from the Department for Communities and Local Government-or whatever the Department was called then-for flood damage for roads and bridges. North Yorkshire made an application last year, because we have got the longest roads in the country.

Neil Parish: No, you have not.

Q21 Chair: We will have a debate over a drink later. What changed between 2007 and 2012, so that one bid was successful and the other was not?

Richard Wills: I think it was lack of money. In 2007, we were not quite into the recession and there was more money about. That money largely came from the Department for Transport, or ultimately from the Treasury, I suppose. There is less money in Government Departments for these emergency covers. Having said that, the Department for Transport have just awarded money for drought damage and winter maintenance damage over the last two or three years. It would be unfair to say that the Government does not respond to adverse weather issues. It really depends on how much money they have got in their budget, and whether there is any contingency left at the time that you ask. I suspect that in 2007 there was money and in 2012 there was not.

Chair: That is fair enough. Thank you.

Q22 Neil Parish: The Government is, in many ways, quite rightly keen on partnership funding. However, does the current partnership model hinder the development of shovel­ready flood defence projects?

Cllr Cooper: Shovel-ready projects, as with many things, will follow the money. They will look at where money can be adapted, and where events have occurred. That is going to be the area where it is going to go in. Shovel­ready projects really should follow need. Does need follow funding? I have mentioned that particular issue, and the difficulties there, earlier on. One of the things that we need to be doing is monitoring this, to see what does occur where money has not been allocated or not been found. We did have Richard Benyon, the Minister, coming to a conference that we had on flooding about three or four months ago, and he was bemoaning the fact that private sector money was not being found in certain areas. Where private sector funding is not being found, that responsibility then falls back on local authorities. That is the reality of a lot of these projects. If we are the ones who determine where need is, and private money is not coming, then that is where it happens. There are examples of that that we can share.

Richard Wills: The Environment Agency and Defra have both undertaken to work with the Local Government Association to review the current partnership funding model. We accept that that is the right principle: it is just a question of whether it works in practice. I would allude to an answer I gave earlier, which is that at the moment we probably have enough schemes in the pipeline that the partnership model is not hindering us. However, as we move forward into newer territory where we have not yet done the preparation works, we may run into difficulty, partly because of the revenue funding, but also because you need more than one term of a council-or, indeed, a Parliament-to prepare and build. One of the things that was impressive to me as a professional looking in on the political processes between 2007 and 2010 was that Parliament across the parties decided that this was an issue of importance. From a local government perspective, Parliament continuing that line of "this is important to any Government" would certainly help the Environment Agency and local government to have confidence that they could invest some money in preparation now, knowing that at some point in the future-we accept that this might be five years ahead, but that is as long as it takes to design some of these schemes-that confidence would be very helpful.

Q23 Neil Parish: How can we actually get the partnership model to generate more funds and bring people together? For instance, in a local village of mine I was a facilitator of bringing all the various agencies, councils and people together. There does not always seem to be a mechanism to sit everybody down and say, "What are we going to do with the limited resources?" Who is going to make the plan as to what the village needs to get rid of the water?

Cllr Cooper: Bringing people together is very much a local authority role, and it is a role that we already have and is already being used by local authorities. If local authorities were not there, the question would be, "Who will do this work? Who would do this coordination work?" It is a vital area. One of the issues that we do have-particularly with some of the cuts that councils are having to make-is that key staff who have got these responsibilities may disappear. It then becomes part of somebody’s job and part of somebody’s role, and that it makes it more difficult to plan in some areas. This is particularly true in smaller councils, where capacity is not as great. That becomes a concern.

Richard Wills: I think that some communities are more alert to this than others, if I am being honest. Those communities that are tuned in to this are almost writing their own agenda, which we as councils are following. In other places, we are leading. I do not think either is right or wrong; I think that both are valid. In my local area, we have had local communities that have said, "We need you to do this. We are prepared to put some money into the pot as a local community. We are working with our internal drainage boards: they have put money into the pot as well." There are some really good examples of where this could work, and as the Local Government Association we are making sure that those case studies are shared through the local government community so that others can learn from good practice.

Neil Parish: It is just a question of where you have got very small parish councils and very small areas still having quite big floods, but not necessarily having the wherewithal to kick it off. That is where you have got to get the local districts or whatever coming in.

Cllr Cooper: Yes, the principal councils.

Richard Wills: Sometimes that is about compromising on the very best design standards that you might hope for. Rather than having, for example, a 120­year or a 200­year return time, some communities would be grateful if the return time was not as frequent as 30 years. We, therefore, have put in some relatively cheap schemes-I will not say cheap and cheerful, because that sounds rather disparaging-which have not done as good as we might have absolutely liked, but have done more than otherwise would have been done. We know for certain that this year, we have prevented floods.

Neil Parish: Therefore, the Environment Agency would have to remodel some of their schemes, because they are the ones who sometimes-perhaps for good reasons-make the schemes very expensive for one flood every 120 years, if you see what I mean.

Richard Wills: If local authorities had a little more influence over some of the money, we might be able to adapt the standards to an acceptable local standard. We would have to help our public understand that that is not as good a scheme. We have a duty to help communities understand what that means.

Q24 Chair: I think it was Councillor Cooper who spoke about the Floods Minister bemoaning the fact that there was no money from the private sector coming forward. That will actually impact quite badly on flood defence spending, because we understand that the funding from the private sector is expected to be around 10% of all funding.

Cllr Cooper: He did not say that there was no funding. He said that it was not as much as he expected.

Q25 Chair: Could you give us some examples of where there has been private sector funding?

Cllr Cooper: I could not.

Chair: You could write to us with it.

Cllr Cooper: Yes, we could provide that.

Richard Wills: We can do that, yes.

Q26 Barry Gardiner: Just to clarify what you have been saying: I take it that the partnership model is good for priorities in one way because it ensures that local authorities that are prepared to put money in-because it is clearly a local priority for them-are reflecting that in the prioritisation of the scheme. However, in another sense it may mean that local authorities might be unable to put that funding into play, and that therefore even though their scheme might on any independent analysis-not looking at funding and resource-be a more important, or at least equally important, scheme to do it might be de­prioritised by the local authority not being able to contribute in that way.

Cllr Cooper: That could happen. That could occur.

Q27 Barry Gardiner: Therefore, on this balance of swings and roundabouts, where do you come down on that? Do you say that the partnership model really is worth doing, because of the voice it gives to local authorities and the connectivity it makes, or on balance, do you wish that the money could be put together and delivered in a strict priority order?

Cllr Cooper: The principle is fine, in that the people who are going to benefit from the scheme in terms of industry or whatever in the private sector make some contribution in that way. Of course, it does not always work, as we have discussed. Anything like this, if it is going to match the need, is going to need flexibility. There is going to need to be flexible funding that enables schemes that have merit and are valid, but do not meet the funding model, to be assisted. That does seem to be a role for central Government, to provide assistance where things that have merit will not otherwise occur. The point you made earlier was a good one on that scope.

Q28 Barry Gardiner: Does the partnership model ensure that the economic value of agricultural land is fully captured in the cost-benefit analysis that the EA uses? Have you any comments to make around that? I know that the NFU have been quite vocal on that issue.

Cllr Cooper: I am sure that the NFU will have plenty to say. I have spoken to farmers who have been affected by flooding. Obviously, last year was one of the worst years on record for them. The loss of prime agricultural land has an impact on food prices and on businesses around the area. It has an impact on the economy in those areas. Therefore, the question is whether that is properly reflected in the funding model. Of course, you look at that and it brings it into question. We ought to be having schemes that do protect agricultural land and do help the local food chain.

Q29 Barry Gardiner: Is there a way of tackling that within the current framework?

Richard Wills: It is not really being tackled adequately, I think. Lincolnshire has an interest in this.

Barry Gardiner: I thought you might.

Richard Wills: We have got the most Grade 1 agricultural land, and therefore it is of interest. The Greater Lincolnshire Local Enterprise Partnership is taking an interest in this, because of its significance to that particular economy. The problem is the rather simplistic way in which it is taken into account-which looks at the value of the land itself-does not take into account the future value of food production that, if lost, would be difficult to replace. In Lincolnshire, 39% of our land mass is at or about sea level, so the coastal flood defences are relatively important to us: hence why we are quite active in this field, and, I suppose, why I am here today. I think we are saying that we believe you somehow need to take into account that national food security issue. Costing it is difficult, but there ought to be a mechanism for taking that into account, because you can lose some parts of the economy and go somewhere else to set it up. However, if you lose that land-and land that is being inundated by the sea will take seven or eight years, if not more, to recover-that is lost from production for that length of time, at least. That also assumes that you can get the sea back again.

Cllr Cooper: Defra will probably tell you that agricultural land is actually included in "under consideration", but in reality, it rarely gets a look in with this funding approach. I would suggest that it would be reasonable to ask them, "How often has agricultural land been protected by partnership funding?"

Barry Gardiner: Thank you. That is a very helpful suggestion.

Q30 Mrs Glindon: Your written evidence expresses concerns about the Environment Agency’s withdrawal from uneconomic maintenance activities. What impact has this had, or what impact will it have, on local communities?

Cllr Cooper: Every time a scheme happens, there will be some form of maintenance required at some point. We have got basic maintenance issues, such as dredging rivers and things: the lack of dredging rivers that is happening at the moment is a revenue cost, and, of course, rivers that are shallower-that have not been regularly dredged-do increase flood risk. The lack of work there is particularly of concern. It is certainly going to have an impact, and it will get worse.

Richard Wills: Silting up of rivers reduces the amount of flow that you can get through a river. However, equally significantly, they are also storage areas for water. We think that it is important that you maintain those adequately. Indeed, if you were to come and have a look at how internal drainage boards work-which will be in evidence shortly, I think- you would see a difference between the way in which they work and the way in which the Environment Agency works. There is a difference, of course, in purpose, but nevertheless our view is that we do need to maintain them. That is not to say that the Environment Agency needs to maintain them. They may need to contribute towards the cost of maintenance, but we as a county council are working in partnership with our internal drainage boards to do some of our consents and regulatory work. I see no reason why internal drainage boards should not do some of the maintenance where they exist, given that they are geared up to do it and have done it very effectively.

Q31 Mrs Glindon: Have you got any specific examples where reduced maintenance has already led to flooding that might otherwise not have happened?

Richard Wills: Most local authorities are now doing some of the investigations that we are required to do post­flooding. There does appear to be some evidence-at the moment, I would not want to suggest that it was conclusive evidence-that lack of maintenance has led to some floods. It would be unwise to just use one round of floods to say that that is the principal cause, but there has certainly been a lack of maintenance, not just by the Environment Agency. Sometimes local highway authorities-mea culpa-have not maintained their drainage systems as well as they perhaps should have. One of the things that I think the Lead Local Flood Authority rules and statutory rules will require us to do is to look more at our own house. Therefore, before I criticise others, I would certainly want to make sure that we have got our own house in order.

Q32 Mrs Glindon: Has the LGA had any direct discussions with the Environment Agency and Defra about the potential problems arising from reduced dredging and other watercourse maintenance?

Cllr Cooper: We are always talking to the Environment Agency and Defra through the Local Government Association Inland Flood Risk Working Group. We have officers within the LGA who do some excellent work in terms of the liaison with them. We are forming quite a coordination role there, in terms of bringing different people together-CLG, Defra and a variety of different interested bodies-to have a forum to have these discussions, and I think it is pretty much appreciated.

Richard Wills: I think it is appreciated. To be fair, those conversations happen on the ground as well. It is just that we do not always agree with each other.

Q33 Mrs Glindon: Do they go beyond discussion and conversation? Do you feel that they can be fruitful?

Cllr Cooper: They can certainly be fruitful. There are certainly recommendations. We have sat down with the Minister on occasions: Merrick Cockell, who is the LGA’s chair, has sat down with the Minister. Therefore, a lot of the things that have come out of those discussions have gone directly to Ministers through those sources.

Q34 Neil Parish: Can I just come in, Mary, to pursue that? My view is that for 20 years-nearly 30 years, now-there has been a policy of not dredging rivers. That is one of my pet themes. I think that we have got to be much more proactive in reversing what I consider to be the policy of allowing our rivers to silt up. Would that be your view?

Cllr Cooper: I would leave that to the professionals. I am not an expert in flood risk or drainage. However, what I would say is that you need to take advice from the professionals in that area. It is certainly something that has been raised by professionals, and has been raised with us at today’s Inland Flood Risk Working Group as an area of concern by people who work in the sector. You are not out of line with some professional thought on that area.

Richard Wills: We would be looking for some proper modelling, to say what the effect on the flow is of higher riverbeds. Those models are available to be done, technically. One of the things we have asked for in our area is for the Environment Agency to demonstrate why they think it does not need doing. Sometimes they are able to convince us, and sometimes they are not.

Neil Parish: Thank you. Sorry, Mary.

Q35 Mrs Glindon: That is okay. How do councils make cost-benefit judgment as to the appropriate spend on maintaining watercourses for which they are responsible? How can this lead to local communities being confident that these judgments would lead to sufficient levels of investment before a flooding incident occurs?

Cllr Cooper: Councils are, as we know, multi­faceted bodies with a range of responsibilities. These include health and social care; education, to a certain extent; street lighting; emptying the bins; and any number of other things. It is part of those overall judgements; it has to be. Of course, as funding levels decrease, those choices-between basic social care and flood risk-become harder and harder. If you cut council funding, that is what is going to happen. Every council is going to be different; every council is going to have different pressures on it. It is certainly an area you would expect scrutiny bodies within councils to look at. One thing I would suggest is that this could perhaps be an area for a model scrutiny, as to what sort of questions councillors ought to be asking about their own council in terms of what it is doing about flood risk and those sorts of areas. Councils actually having a model scrutiny to look at this issue could be a recommendation that comes out, so that they can consider that themselves within their own governance mechanisms.

Richard Wills: From a technical point of view, looking at an individual scheme, the sort of things we would take into account are how many properties were protected, what amount of land was protected, if you are talking about agricultural land and what benefit that land would have on the overall economy and wellbeing of the place. You can look at an individual scheme in much the same way as the Environment Agency does now. We would probably use similar models. Then, as Councillor Cooper has said, you then have to say, "Does that ‘good value for money’ scheme compare better than a good value for money scheme in social care, or in some other things?" There are two aspects to value for money, therefore: is it good value for money as a scheme, and how does that scheme compare with other things that the council wishes to do?

Q36 Chair: Thank you. Could we move on to sustainable drainage systems, in which the Committee-and particularly myself-are extremely interested. Do you think SUDS have a role to play in flood defence and surface water run-off?

Cllr Cooper: Yes, they do. The ultimate question is why it has not been done earlier.

Q37 Chair: Why has what not been done earlier?

Cllr Cooper: Why have sustainable urban drainage systems not been in place much earlier, and why is it very much a voluntary mechanism that, as we understand, is now going to come into play in 2014? Only a few months ago, we had no idea when they were going to be implemented. Of course they have a role to play, but one of the issues that is going to be facing us is the impact on viability of new developments. One thing that we are up against is the housing lobby and what they are going to be saying in terms of the use of sustainable urban drainage systems.

Richard Wills: Amongst other things, I am a fellow of the Institution of Civil Engineers, so I guess that I am supposed to know some of the technical aspects of this. Partly, it is about design philosophy and the way we have gone about doing things. Historically, our rainfall patterns have allowed us to get rid of water from where it falls as quickly as possible and put it somewhere else, which is usually into some river or whatever. What we have realised as a profession-belatedly, I think-is that attenuation of water plays a very significant role in the ultimate flood risk management. That came out very clearly in Sir Michael Pitt’s review, hence the recommendation that eventually found its way into legislation, albeit with a lot of enabling clauses.

I think that most people in the drainage world would now accept that sustainable drainage systems are a way forward. You have got to look at the particular geology of a place: it is not just a matter of digging a hole and hoping that the water will soak away, because I can tell you that it will not in some of my patch. That is the way forward. There is plenty of international experience around this from which we can learn, particularly in Holland. Partly it is about design philosophy, and my view is that we will be able to improve our flood risk management through that technique. However, it is very difficult to retrofit. At the moment, one of our problems is that we have got a lot of combined surface water and dirty water sewage systems. At some point-we discussed this briefly this morning-we are going to look at whether sewers should just be for sewage and surface water should be dealt with somewhere else. That, I suspect, is also a massive investment if you are going to retrofit, but it is something at which we are going to have to look.

Q38 Chair: Mr Wills, can I just ask you what, in your view, the reason is for the delay in the enabling regulations being passed? You are obviously a very clever person.

Richard Wills: You might have to ask the Department for Environment, Food and Rural Affairs for their answer to that. I think that we are mainly waiting for the financial instruments. I do not think that it is the technical bit, because we could go away and write our technical rules. The question is, "Who is going to fund the cost of adoption?" In the highways world-which is a parallel issue-if a developer builds a road, we ensure that it is built to a good standard and then it is adopted and becomes part of the public expense. That methodology could be used for drainage, but Defra-in both this Government and the former Government-said that there would be no extra burdens on local authorities. Both have said they will keep that promise. I think that is where the problem lies, because it is probably not possible to do that very easily.

Q39 Chair: Can I just ask what councils are doing to help expedite the funding aspect? Would you see a role in my own area? I know this is not uniform across the country, but Yorkshire Water would be keen to have a role. Do you see that being part of the solution?

Cllr Cooper: I certainly think that we need to be working with the Environment Agency and with water companies on this. One of the issues that we do have is that, come 2018, Government funding falls out in support of SUDS. Going beyond 2018, we have an issue with our ongoing funding. We do not know where it is going to come from.

Richard Wills: There are a number of water authorities that are developing sustainable drainage systems in their areas: Northumbria, for example. I think that you could get evidence from the water companies that would say what can be done, and sometimes they may well find that it is beneficial for them. One of the things that I have asked my colleagues to do is that, when we next have a flood that is about surcharging of a combined sewer, we at least do a desktop study to say what would happen if you took that water out; how much would it cost; and whether it is economically feasible. Then you could ask the question of who could pay for it.

Q40 Barry Gardiner: I would love to pursue your combined sewer, but I will not. I have been working on ours for 10 years and trying to get people together to agree who should pay for it. We have got to stop building in areas that are susceptible to flood risk, haven’t we? PPS25 has been less than universally effective in getting that to happen. Do you think that we need more legislation in this area?

Cllr Cooper: Local authorities are being highly pressured in terms of providing land for developments. I mentioned housing being part of the one­trick pony to boost the economy earlier, and certainly councils have got a role to play there. In terms of the local plans that councils have been developing, we have areas of green belt that are under threat. If it is not going to be the green belt-if we are not going to re­designate areas there-and the brownfield and provisional open land is not available, then it veers councils towards considering the possibility of building in floodplains. The reality is that there has not been an awful lot of work done around the country in which floodplains have been brought into use. The irony is that a lot of the design stuff-and I might hand over to Richard there-means that you can build properties that are less susceptible to flood damage if they are new than if they are old properties, where it is more difficult. You generally would not like to see building in a floodplain, but there are ways of limiting the damage there. It is a pressure about more housing development.

Richard Wills: You could certainly argue that we are in a floodplain at this moment.

Q41 Barry Gardiner: Before I ask Mr Wills to come in: just specifically from your own experience on your council, are you-or have you been-building in areas that you know are susceptible to flooding risk?

Cllr Cooper: That was certainly one of the proposals in Kirklees Council’s local plan, yes. There were areas that were in the floodplain.

Q42 Barry Gardiner: What did the Environment Agency say about that, in terms of their role as commenting upon it?

Cllr Cooper: The council looked at it and looked at the proposals there and deemed it to be an acceptable risk.

Q43 Barry Gardiner: Sorry, the EA did, or the council did?

Cllr Cooper: The council did.

Q44 Barry Gardiner: That was not my question. My question was, "What did the EA say?"

Cllr Cooper: I cannot remember what the EA said. I cannot remember the EA’s advice on that.

Q45 Barry Gardiner: That is fine. My point is this: is that not always the way? The EA come in and they say, "You really should not be building here." Councils-and I perfectly understand those pressures, Councillor Cooper-then say, "We have not got any alternative. We have got a waiting list that is so long, and we just need to do this."

Cllr Cooper: As I mentioned early on, councillors go along with 99% of the advice that they receive from the Environment Agency with regard to local plans. Usually, it is only a very small amount of advice that does come into question. That is the advice that we have received.

Richard Wills: It has to be risk­based. Taking Lincolnshire as an example, you would be unable to build on 40% of Lincolnshire if you took it strictly. It is a floodplain. We are almost certainly in a floodplain here, but this building has been around for a while. It is about risk. What local authorities are doing with the Environment Agency is they are looking at the hazards that are available: what would happen, for example, if you got a breach of the coastal defences? We have done hazard mapping, for example. What we have not done yet is put a probability to that and you actually need both in order to determine whether it would be safe to build.

But what do you mean by that? If you are going to have six inches of water across a large area, that is not the same as rapid inundation and a wall of water coming at you at 60 miles an hour. It has to be risk­based, and therefore a simple answer that says, "You should never build in a floodplain" is not right. To allow floodplain building with no risk assessment would be wrong. I think that it has to be a risk­based system, and, as Councillor Cooper says-I think it is 97%, rather than 99% of the cases-

Cllr Cooper: I will give you 2%.

Richard Wills: Where the Environment Agency offers advice, councils accept 97% of that. That, in itself, is not the problem. We have got problems where in the past we have built in floodplains and frankly we have not provided for that. Hull, Doncaster and parts of my own area are certainly some of those.

Q46 Barry Gardiner: Do I take it from both of your answers that you would not advocate a stronger role for the EA, such that they could effectively veto a particular build, even though they are the best risk analysis experts that we have in this area?

Cllr Cooper: Given what we have said about the 97% or 99%, then it is not a huge issue.

Q47 Barry Gardiner: You do not see it as an issue?

Cllr Cooper: It is not a huge issue in that way.

Q48 Barry Gardiner: So you would not advocate them having a stronger role?

Cllr Cooper: No.

Q49 Chair: Would you advocate that water companies be statutory consultees?

Richard Wills: Yes.

Cllr Cooper: Yes.

Q50 Chair: Yes, Mr Wills? You would? Could you work that into the record rather than nod your heads?

Richard Wills: I think it would be helpful for water companies to be statutory consultees. Indeed, when we are developing schemes, they are participants in what might be called pre­application advice, as well as working with local planning authorities as we are developing local plans. That is not just for flood risk, of course. It is also from a water resources point of view.

Q51 George Eustice: This is quite a good thing to follow on, given that we were just talking about flood risk. I just wondered what information the LGA has been getting regarding communities’ ability to secure insurance in the light of the Statement of Principles being about to expire and the recent flooding that we have experienced?

Cllr Cooper: We have had quite a bit of information from a number of areas. One that springs to mind is Runnymede Council. We have heard that people have had to get excesses of about £10,000, so insurance is costing a huge amount of money, which is basically unaffordable for those households. That is a real issue for many. It runs out in June 2014, and so obviously it is an issue now. We have sat down with the Association of British Insurers, and spoken with them directly about this. They have told us that their proposal has been to establish a scheme similar to the way that Government insures against terrorist events. It is a scheme that they call "Pool Re".

The Association of British Insurers told us-and you might want to ask them about this-that to establish such a scheme in the UK would cost between about £100 million and £200 million, which would enable us to have affordable insurance for householders. That would roughly be the cost of doing that. We have spoken to Defra about this, to try to get their view on the ABI’s suggestion-so we are trying to get the two bodies to give us some kind of information on this area-and Defra has been quite cautious. It has not been showing its hand at all in this area, so we have got concerns. The Pool Re model that the ABI are talking about is worthy of further investigation. If you can elicit information as to the true cost and get Defra to go along with that, I would be interested to know what you manage to find out.

Richard Wills: We did get some information from the Morpeth Flood Action Group, which was badly affected. They said that the increase in building and contents premiums between 2008 and 2010 for owner­occupier households that were flooded was 71%, compared with 9% for non­flooded housing.

George Eustice: Is that because the existing Statement of Principles have not covered that?

Chair: We are just coming on to that.

Q52 Neil Parish: Has the Government involved local authorities in discussion about the continuation of affordable flood insurance to households after the expiration of the Statement of Principles in the middle of this year? Have you been consulted enough?

Cllr Cooper: We have certainly been making representations, making our views quite clear and facilitating discussions. We have provided opinions, but we are not getting an awful lot back.

Richard Wills: There was a working group that they set up, which was mainly about evidence gathering, and we have participated in that. Clearly, we have not been engaged in the consultation between Ministers and the ABI.

Cllr Cooper: That is direct, one­to­one consultation.

Q53 Neil Parish: In an ideal world, what model would you prefer to see adopted by the Government-there is a nice blank sheet of paper for you.

Cllr Cooper: I was quite impressed by the idea of taking a similar approach to terrorism. These are unexpected events; they are expensive; for the areas concerned, they are catastrophic. You look at that and think that there is a lot of synergy between those two elements.

Q54 Neil Parish: That is where the Government would be the insurer of last resort, then? That is what it is under terrorism, is it not?

Cllr Cooper: It would underwrite those costs. However, when you look at £100 million to £200 million for the level of distress and problems that are there, this does not seem unreasonable. The other way of looking at it, of course, is that it will help to direct and provide an impetus for flood defences, and mean that if Government is trying to renegotiate that and look at that again it will have more incentive to get the defences right and get the defences in the right place. It will reduce the impact of that cost.

Richard Wills: I am aware that Defra have looked at what other countries do and what they model. There are some counter­intuitive things. For example, the Federal Government of the United States underwrites major flooding, but the Government in Germany does not. You sometimes have a Government that says, "We will underwrite the basic risk," and in other areas it has to be fully covered through insurance systems of one sort or another. Most councillors that I have spoken to are talking about property level insurance: understandably, since why would insurers risk insurer certainty? There has got to be something about property level, but we also ought to be taking into account the property level protection as well.

Q55 Neil Parish: Would a community-based method of pooling flood risk work for areas of high flood risk, for example? Would that be something that you would quite like to see?

Richard Wills: One of the issues that we have got to talk about is the question of where the flood emanates from. The beneficiaries, who are often the people that are flooded, are not necessarily the causes of the problem.

Neil Parish: That’s right. They could be further upstream.

Richard Wills: They could well be. Therefore, pooling at a community level may not work if the cause is a river away.

Cllr Cooper: It could also be across a number of different council areas.

Chair: We have very heavily overrun. We are extremely grateful to you for being so generous with your time. Mr Wills, Councillor Cooper, thank you very much indeed.

Richard Wills: Thank you.

Cllr Cooper: Thank you.

Examination of Witnesses

Witnesses: Henry Cator, Chairman, Association of Drainage Authorities, Dr Jean Venables, Chief Executive, Association of Drainage Authorities, and Ian Moodie, Policy and Technical Researcher, Association of Drainage Authorities, gave evidence.

Q56 Chair: Before we start, may I thank you very much indeed for being with us this afternoon. May I declare my interest, in that I am a Vice President of the Association of Drainage Authorities, a privilege that I hold with great contentment and glee. Could I ask you each to introduce yourselves for the record and give your position, starting with Dr Venables?

Dr Venables: I am Jean Venables. I am Chief Executive of the Association of Drainage Authorities.

Henry Cator: Henry Cator, Chairman of the Association of Drainage Authorities and also Chairman of the Broads IDB in East Norfolk.

Ian Moodie: I am Ian Moodie. I am the Policy and Technical Researcher to the Association.

Q57 Chair: Thank you. At the outset, could I ask a general question? Are you able to share with us what your budget is overall as an association; what the resources available to IDBs are; and how many engineers are retained by IDBs? If you do not have it, we could ask you to write to us on that.

Dr Venables: The Association of Drainage Authorities is a membership organisation. As such, we have a very tiny budget. I am looking to Ian for the number. Our internal drainage boards raise money locally for their own activities. I am seeking Ian to support me on this one. It is £60 million.

Ian Moodie: Yes, that is about right. The actual budget of the Association is in the region of £250,000 annually, or just slightly less than that at the moment.

Q58 Chair: This is a personal view, which I have discussed with yourselves and with local drainage boards in my own area, and, indeed, with Lord Smith. Do you think there is an argument for drainage boards retaining some of the levy that they raise from their members-from the local farmers-and that they currently pass to the Environment Agency? Do you think that there is an argument that that should be kept with some of the local drainage boards so that they could do some of the necessary maintenance and dredging of both major and minor water courses?

Dr Venables: The funding is often complex to the outside, but there are checks and balances and there is a logic to the way in which the levies and precepts are raised and spent. There is some money that some IDBs give to the Environment Agency for maintenance of rivers, particularly main rivers, outside of the IDB area, but from which the IDB benefits. There has been some concern expressed recently, and we have been having quite a long dialogue with the Environment Agency over the extent to which that maintenance is being done and can be accounted for. There is a move in some places to take that maintenance from the Environment Agency and do it directly. As such, they would then be looking for a reduction in that precept.

Q59 Chair: In your written evidence, you express concerns about the Environment Agency’s reduction in its maintenance budget and the decrease in de­silting work, which has exacerbated recent flood events. What level of maintenance budget do you believe should be adequate to deliver effective levels of dredging across the country?

Dr Venables: There are two things in that question: there is one about the maintenance budget altogether and then there is the other one about dredging. The maintenance budget itself-at the moment, this year-is inadequate to do all the work that needs to be done. That is why they drew up their protocol as to the economic appraisal of work. I have to say that it is the EA’s economic appraisal, not necessarily whether or not that river is worth maintaining. It may well be that if you have got lower costs and have different benefits that you can attribute to the benefit of maintenance, then it would be worth doing, and a lot of local communities see the worth of doing it. It is not necessarily a criterion that the EA can include in its calculations. When the EA say that a stretch of river is uneconomic to maintain, it is uneconomic from their point of view, and should not be taken as, "It should not be done by anybody."

Henry Cator: Could I give an example? In the Anglian Central region, for the year 2013/14, the Regional Flood Coastal Committee put in a bid for £6 million, for what they considered to be essential maintenance work. They were awarded £2 million only.

Q60 Chair: Would you say that the Environment Agency is being effective in prioritising spend in areas most at risk of high consequences due to flooding, and what more should the Environment Agency be doing to raise revenue for maintenance?

Dr Venables: The Environment Agency has been given the target of reducing flood risk to properties. Therefore, that actually targets their maintenance at conurbations. Other priorities for other people are not on their list. This is just the way in which they have been told to do it, and they run out of money before they get to the bottom of their list of things that need to be done. There are a lot of areas in this country that are not getting adequate maintenance and this is just storing up problems for the future.

With particular regard to dredging the Parrett and Tone down in Somerset, they reckon down there that we have lost a third of the capacity of the river and it needs dredging. However, in order to justify the dredging, one has to find benefits of £2 million. You are looking at an area that has been devastated since late spring-June or July-last year. It has been under water, and so many of the local businesses have been completely undermined by it. It is a fundamental problem down there. There has been land underwater now for months and months, and it will take years to recover. That is not just agricultural land: it is also all of the local businesses that are consequential on that. Therefore, if one were to clear the river, it would not necessarily prevent flooding in Somerset, but it would reduce the extent and duration of it. If you reduce the duration of it, then the water quality would not deteriorate, and you could pump it out faster.

Q61 Chair: What do you think, Mr Moodie?

Ian Moodie: Just to add a bit further: you asked about other sources of revenue funding. We have already talked about the precepted rate that the Agency raises on IDBs; that is a form. We have also talked about IDBs potentially taking on sections of main river that are not a high priority of the Agency. Where you have an IDB, you have a local source of funding from their ratepayers, but also from special levy they place on local authorities. The Environment Agency have a couple of powers in this regard as well. They can charge a general drainage charge to agricultural beneficiaries of maintenance works that happens on rivers, and that happens across the Anglian region at present. They also have, under the Water Resources Act, the ability to charge a local special drainage charge over a discrete area of beneficiaries. It may be that, for a specific reason, they want to hold on to a section of main river. It should be enmained, and they will be able to do a level of maintenance once every five or 10 years. However, for the more rural community around that, a greater level of work would need to be done. That could be a means to subsidise that work from other sources.

Q62 Neil Parish: I just wanted to speak specifically about the Parrett and the Tone. Bridgewater and Taunton are at risk, ultimately, so I think that needs to be added into the figures. I also think it is about the amount of time that the water is hanging around on the moors. It is not a case of it just flooding the grass and then taking off again, and the grass then recovers: it has actually destroyed it all. We really do have to wake up, in my view, and smell the coffee. What you are saying is music to my ears, but it is important to make sure that something actually happens, because we have been talking about this for some years now.

Dr Venables: Sadly, it did not smell as nice as coffee down there when we went down last August.

Neil Parish: No, it does not. No, I realise it does not.

Henry Cator: For years and years, we have been depleting the maintenance budget, thinking that we could get away with it. We are now finding that we cannot get away with it, and the cost has caught up with us. It is time that people who are in a position to do something about it increase the amount of revenue that is available for the maintenance budget, at the expense of capital spend if necessary. Looking after what you have got is actually much more important than putting in new schemes.

Q63 Chair: Could I just ask: should the Environment Agency be using its levy-raising powers more widely, in view of what you have just told us?

Ian Moodie: I certainly think that it has the ability to do that. As we have said, there is a need to recognise the importance to revenue funding of basic maintenance activity. I think it has been clear across 2012 that it is having an impact now, and it is having an impact on the national economy.

Henry Cator: One of the problems is that we have gone away from local executive responsibility. When local flood defence committees were replaced by regional flood and coastal committees, we were told that those RFCCs will have more executive power. That has not been the case, and so you do not get the same local interest and prioritisation that you got in the past. I am a great believer that local knowledge in a local catchment is key. To give the power back to local people so that they can then prioritise that spend for themselves and explain how they have done that prioritisation to the communities that they serve is, I think, very helpful. One has a problem at the moment, because it is all centralised, and we are just told that there is not enough money to go around, so we will just prioritise high­risk areas. Of course, low­risk areas also have a very high consequence, so you cannot ignore them.

Q64 Barry Gardiner: Mr Cator, you just said that there is not enough money to go around. You will recall that in, I think, 2010 Defra was saying at that stage that it was going to take double the existing budget in order to maintain and reconstruct some of the ageing infrastructure. That, I think, was the budget of £2.17 billion that we have over this spending period as well. Actually, I think there has been a 6% drop now. Is that commitment that the Government has given-that £2.17 billion over the spending period-enough to give you any reassurance about the priority that is placed on flood protection?

Henry Cator: In my opinion, no, quite simply because if one looks at the figures going forward for maintenance, they are still being reduced. We have to understand that there is a fundamental difference between maintenance and capital spend.

Q65 Barry Gardiner: Thank you. Dr Venables, what do you think?

Dr Venables: We have to remember that we are not just looking after individual properties, important as they are. We are looking after infrastructure as well. 53% of the generating capacity in this country is built inside internal drainage board areas: i.e. they are at special drainage need. That is a very important contribution to our civilised life and the way in which we live as a community. We have got to look after that. We have got to not only look after the power stations, but also the roads and the railways that go into those areas. We have got to think about our transport network, as well. We have got to think about the utilities, transport, communications and the power that we depend upon. We are not just talking about flood risk when there has been a storm: we are talking about water level management keeping the water a sensible distance below the surface, so that the soil is not waterlogged. That is where drainage comes into it, as well as flood risk management.

Q66 Barry Gardiner: Have you already provided to the Committee-and forgive me for not knowing this-some information about the figures that you gave us on power generation capacity that are located in drainage board areas?

Dr Venables: Yes, I believe we have, but I will supply that.

Barry Gardiner: Grand; in that case, I need to do my homework better. I feel appropriately chastised. I think that would be very interesting.

Henry Cator: There is your answer, sir.

Q67 Barry Gardiner: Thank you. It would not only be interesting to this Committee, but also the Energy and Climate Change Committee. Last November, the Government announced an additional £120 million over the next two-year period. Have you any assessment of the impact that that might have on the IDB districts?

Ian Moodie: The £120 million, as has already been stated, is for a lot of shovel-ready projects. I believe that Leeds has been named as one of the schemes that they want to take forward, so it has already been targeted. Of the £120 million, £60 million of it is particularly for growth areas affecting economic development. We have talked about Somerset today, and the economic impact that is having. I think that there is possibly some flexibility about considering that fund being used to tackle the acute problems that have been felt during 2012 in that area, and that would be a key benefit to the internal drainage board areas around there.

Coming back to energy briefly, it is important to note that Hinkley Point was cut off for a time during the November events of last year. This is a very real threat, and then you obviously have the West Coast Mainline rail network, strategic roads and motorway. There is a lot more there than just a rural community. There is a lot crossing that area, and that needs to be fully considered in economic appraisal.

Q68 Barry Gardiner: Is that not considered in the EA’s appraisal process at the moment?

Ian Moodie: It is, but I do not think enough is considered. The direct impact on the rail companies is considered, and on the operating authority, Network Rail. I am not sure whether the wider economic impact on the people travelling through that area is properly considered. Just people being delayed by an hour getting to school; having to drop their kids off an hour later; a school being closed: it mounts up very quickly. There is no way that a model can ever properly consider those things, but I do not think that it even properly estimates it to a full extent at the moment. I would say that is especially so in a more rural community than within a city centre. It is a bit more discrete. You can hold on to it and capture the figures a bit easier.

Q69 Neil Parish: Just as a comment, there are still roads closed in the Levels that have not been open at all. That is an impact in itself. I wanted to go on and talk with you about the internal drainage boards and local communities. Are you assured of the effectiveness of local authority expenditure in flood management? Are more specific outcome measures needed for councils on the impact of their flood spend? Are you involved enough? We have just had the local authorities in.

Ian Moodie: We have not been involved in looking at indicators for local authorities. However, at the moment, Defra have a project ongoing with the consultants, looking at indicators for performance measures for internal drainage boards. That it is a useful exercise, but it is a difficult exercise as well when you consider that geography and social conditions vary quite widely across the country and the different pressures that are being felt, particularly on local authorities, but on IDBs themselves as well. You have to be quite intelligent with how they are placed, and it is a challenge, but in principle they could be useful.

Q70 Neil Parish: Can I just draw you out onto another one of my pet themes? There is nobody actually physically being there to be able to open a sluice when it is necessary to let water go, if there is somewhere to let it go into. It is not only about funds: it is about management, and there just does not seem to be any actual local management. You have got a very good role there, but are you being allowed to do enough locally?

Dr Venables: Internal drainage boards cover one tenth of this country.

Neil Parish: I know, yes.

Dr Venables: Therefore, in those areas that the internal drainage boards manage, I can assure you that those sluices are operated when they need to be. I am confident in saying that. There are other areas where there are not IDBs and then it would be down to the local organisation.

Q71 Neil Parish: For instance, the Tiverton Canal in my area burst its banks. It was overtopping for four or five weeks before it burst. If somebody had actually let the water go, we would not have a £2 million to 3 million cost. I know it is always clever in hindsight, but is there not a way that you, the drainage boards, could actually perhaps help some of the local authorities in that local management of water?

Henry Cator: I am so glad you have asked that question. The answer is yes, by extending the area over which IDBs have control.

Neil Parish: The Chairman had better declare an interest at this point. Seriously, I could not agree with you more.

Dr Venables: We have written a report about how to form new IDBs. There are areas in this country-Cumbria, Sussex and Kent, for example-where there is active discussion about new IDBs being formed.

Q72 Neil Parish: One last question: are there merits in the suggestion that one council has made of adopting a single flood risk management funding pot for all public funds, which we allocate on the basis of an area’s flood risk zone and surface water vulnerability?

Henry Cator: In my opinion, no, because it is much better to do it on a catchment basis where local people can decide how to prioritise the spending of the scarce resources that we have. One of the advantages that IDBs have is their ability to raise funds from their constituent ratepayers and businesses. Therefore, we start the year by saying, "What do we need to do?" From that, we can do a budget and realise how much money we have to raise, and from that we go back to the councils and the ratepayers and say, "This is how much we are going to have to charge you this year." That is a completely different standpoint from one that says, "I have only got this much money, so therefore what can I do with it?"

Q73 Barry Gardiner: Does the current partnership model hinder in any way the development of flood defence projects that could protect low­lying areas such as the Fens?

Ian Moodie: I think that this comes down to what the previous speakers from the LGA were talking about: an evaluation of agricultural land. We would completely agree with all of that.

Barry Gardiner: I am asking the same question to both sets of witnesses.

Ian Moodie: We would support what they said. We have also talked about the infrastructure that is crossing those areas, and we would also add on that that is not properly considered. You are talking about quite isolated rural communities. They are disparately spread across a wider area. They are very reliant on the transport links across that area, so that is quite critical, as well. You asked the question of how it is affecting internal drainage boards: another issue is the length of time and the length of pre­study that needs to go on to satisfy the criteria of the Environment Agency. It is quite detailed, and that requires quite a significant level of revenue investment in its own right. That is a challenge to internal drainage boards or smaller organisations.

Dr Venables: It is very early days. I think that there has got to be some process developed that goes around the funding and how you actually put a project together with such a range of different funding pots, all with different rules about timing and expenditure. IDBs have stepped forward and have cooperated where there are local projects.

Q74 Barry Gardiner: In terms of the way the model allows the generation of additional funding, how would you want to see it developed so that you can more easily secure non­public sector funds going into projects?

Dr Venables: It is always good when you have other funding streams. I would not want to become reliant on outside money to the extent that it skews which projects are done, and I would share the concern about projects being done in places where there is a pot of money that can assist it, rather than on the basis of need.

Ian Moodie: In a lot of ways, IDBs are quite familiar with the partnership funding idea. Prior to it, flood defence grant­in­aid was distributed purely on a needs basis. There was quite a complex formula to get to that point, but once you got there, an Environment Agency scheme or a local authority scheme got 100% of funding. That was never the case for an internal drainage board: an internal drainage board only got around 45% of the funding from flood defence grant­in­aid. They made up the rest of the money from their own local revenue sources. In a lot of ways, we are very much at the forefront of local funding of schemes. That is, in part, coming from private ratepayers. It is also coming from local authorities. Therefore, in a lot of ways, we are already doing it.

Q75 Mrs Glindon: What level of support is needed to ensure an effective transition of responsibilities from the Environment Agency to new or existing IDBs?

Dr Venables: In some cases, this transfer has already been done. In some cases, it is going through. There are other rivers where the receiving body-usually the internal drainage board-would want to see some investment being done in the asset before it was handed over, because it is in such poor condition that it would need quite a lot of money being spent on it to get it up to condition. Having the work done beforehand or it coming with a pot of money that would enable the work to be done is, I think, what we would like to see changed. We would like to see the Environment Agency being in a position to have the ability to spend money on transferring its assets for the long­term benefit to the EA, but it might be a short­term cost in terms of handing it over and transferring it.

Ian Moodie: That is particularly acute in areas that maybe historically had an internal drainage board, but now do not. There is an area called the Lower Alt with Crossens catchment up in Lancashire-this is an area just north of Liverpool-that I believe used to have internal drainage boards. They were taken away in the 1970s and 1980s, but now the Environment Agency wants to withdraw from maintaining a number of pumping stations in that area. Indeed, what used to be a lot of internal drainage board watercourses remained and became main river, and they want to step away from maintaining a number of those as well. In areas like that, an IDB would be the best way to go forwards. There is a potentially large agricultural rate­paying community there. There is an appetite for them to invest to look after their needs. The cost is very much in getting to a point where you have set up a new statutory body to manage that local risk, and the Environment Agency and Defra could maybe do more to facilitate that.

Q76 Mrs Glindon: Would you think that the Environment Agency and Defra are sufficiently aware of these issues that you are raising?

Dr Venables: I believe so.

Henry Cator: I think they are aware. It is back to this funding thing, isn’t it? They are prioritising their money where there are a lot of people, rather than in areas where the risk is low but, often, the consequence of failure is high. Many of the problems that internal drainage boards face is that their systems may be very beautifully maintained, but if you are pumping water into a river and the river is not maintained, the river will not take the water away, and so it is beyond our control. Therefore, we are saying "Put the control back to the IDBs and we will do the job", or "We will raise the money locally", because it needs doing. It is what the local community wants.

On the whole, if you ask people who are flooded what the problem is, they say "Please don’t let me be flooded again." Well, we are talking about people who have been flooded time and time and time again. It is very hard to hold up credibility with them, and say that we are doing our job to keep you free of water, if we are prevented from doing so. We want to take the job seriously and keep these ratepayers dry: that is the whole purpose of an IDB. It is very much delivery­driven. If people get their feet wet and their businesses wet, we have failed. We take a certain pride in trying to deliver that kind of approach.

Dr Venables: It is also fundamentally damaging to environmentally designated areas if they are flooded to too great a depth for too long. We have lost some SSSIs on the Somerset Levels because of the flooding. Controlling water levels is absolutely vital, and we have had water level management plans up and down the country for some years. If one does not continue to effectively carry those out, then you will actually have quite severe environmental damage in a lot of places.

Q77 Mrs Glindon: Do you think that the ADA is doing its utmost to support IDBs?

Dr Venables: It could always do more.

Henry Cator: Certainly, the ADA is doing all it can to support them. We are a membership organisation, so we are only as good as the last deal we do to represent our members. However, the fact is that we are here representing members who have repeatedly told us that the maintenance regime is not good enough. It is not up to scratch. It is woefully inadequate, and we are trying to make that point as vociferously and as loudly as we can.

Ian Moodie: You asked the question earlier about whether Defra was understanding of the concerns that we are raising. I think that there is a level of understanding of it. Defra is certainly looking at some of the ways and means of freeing up some of the bureaucracy within the Land Drainage Act to allow internal drainage boards to make changes themselves. They were also looking at the legislation around main river, and the process by which main river is either enmained or demained-becomes main river, or becomes an ordinary watercourse again-that could be looked after by an internal drainage board. They are at least looking there, but the speed at which action is being taken is a concern, and we have been pressing this point for a number of years now.

Q78 Mrs Glindon: Why can a catchment­based approach to flooding not be adopted under existing Environment Agency structures, rather than having to split out some EA functions into different bodies, as you recommend?

Ian Moodie: The approach that we have taken there to regionalise it is based on a concern that there is maybe quite a long chain between the head office of the Environment Agency and its regions and areas. We have moved with the Flood and Water Management Act to a basis where the Environment Agency takes a national lead on flood risk and flood risk strategy, and lead local flood authorities take a local strategic lead. The reason we put forward the approach that we did within our written statement was that there needs to be a closer working relationship within the regions of the Environment Agency, the lead local flood authorities and other local authorities, and the internal drainage boards in their area. Very often, the approach that needs to be taken is one that involves more local beneficiaries and more local means than having a locally homogenous approach.

Dr Venables: Can I also add that it is very important that one remembers that local authorities are on administrative boundaries, whereas water acts on a hydrological boundary. There is often a need for local authorities to work very closely with each other, because they share hydrological background. If the basis of the regions was to be catchment­based, they could not be county­based. It would not work for managing water.

Q79 Mrs Glindon: Would separating Environment Agency flood management functions from other agency functions such as water quality management reduce the effectiveness of the Environment Agency in delivering overall water management services?

Dr Venables: The Environment Agency is a body that is both a regulatory body and a delivery body. It is a large, diverse organisation with these two distinct functions. When we were asked for our views on the Triennial Review, we were asked whether we wanted to keep English Nature and Natural England, or whether we wanted to join the two together. If that was the question you were actually asking, then our answer was keeping them separate, with some changes. We then went on to say that if we were wanting to have a third choice-a proposal model-then we would be looking more at regional catchment approaches. We think that if you actually manage a catchment for its water functions and do a delivery model, then that might be more effective and put some of the regulatory functions in with the Natural England functions.

Henry Cator: One of the things that we are witnessing is a change in our weather patterns in this country. We are getting extremes of weather in relatively small areas, which I think we can all cite personal experience of. Therefore, the only way to really deal with that is on a catchment basis. A national pot does not quite cover it, in the sense that you are not addressing the issues as to where the pinch points are.

Q80 George Eustice: Sorry, I had to pop out, so you might have covered some of these areas. I wanted to address whether or not you thought there needed to be any change in legislation regarding the operation of internal drainage boards, because I know that when the draft Flood and Water Management Bill was published, some of the notes coming out talked about maybe repealing its supervisory role and giving it the power to form consortia, limited companies, and other things. I do not think that was taken forward in the end, but do you think there was merit in that, and is that something that should be considered now?

Dr Venables: We did actually have the clause put in about forming consortia and giving services to each other, so we were very grateful for that being put into the Act. With the Public Bodies Act, that is giving Defra sufficient powers to make changes that we are actually seeking at the moment, which are changes to electoral processes that are somewhat antiquated and written in primary legislation. We are working with Defra to modernise those sorts of processes, and we feel that that is very useful and going to move us forward.

Q81 George Eustice: What is antiquated about the current processes that they have for that?

Ian Moodie: An example might be in terms of advertising. IDBs have to advertise elections, which means that they have to put an advert in a local paper. In reality, that can become quite a small paragraph, buried in the Goole Times or some very small paper. We think that there is some merit in that, potentially, but there are other ways of advertising that. Most principally, we want to see IDBs with quite well­resourced webpages, so that they can make it clear on those. We think that the most appropriate way for a lot of elections, for instance, would be through their rate demand letters that they send out annually to all ratepayers within their district. That way, everyone would be aware, whereas people are only aware of elections at the moment if they happen to be reading a paper at one point in time on a given day.

Q82 George Eustice: That is quite a modest technical change, clearly. Is more fundamental legislation-legislation to change a scope or remit-something that you would stop short of? I know that the NFU were concerned that, if you tried to change too much about the way they work, you might cause an upset.

Henry Cator: We would like to see the area over which IDBs could operate expanded. We believe that if they had more control over a larger percentage of the catchment, you would be able to deliver much more of a joined-up system of delivery of water management in the catchment.

Q83 George Eustice: Would that require a change in primary legislation?

Dr Venables: We have been discussing with Defra modifications to what is called the Medway Letter, which is what the Minister uses if there is a dispute over boundaries. We are making progress, but it has been a long series of conversations.

Ian Moodie: I think it is fair to say that we are broadly content with the legislation, but there are tweaks that can be made in a number of areas-particularly some of the bureaucracy around IDBs-which can be improved and streamlined. These are not whole­scale changes. You touched on the supervisory role of the EA as well. We are quite happy that it sits with the EA or a future body that takes on the EA’s role, with the understanding that that is done on a catchment basis. It would not sit as well with lead local flood authorities, not because we do not think there should be a good, close working relationship there, but because, as local authorities are not catchment­based, an IDB can sit within six or seven local authorities in some cases, and they could be being pulled in a number of directions if they had that supervisory role.

Q84 Chair: Just before we conclude, can I ask whether you regret the delay in SUDS regulations being adopted?

Ian Moodie: The main concern we have there is not so much the delay, although it is a concern. The concern is that we have never had a very clear timetable from Defra about when it is going to be implemented. Authorities-lead local flood authorities and SABs-will need a lead-in time to have a staff resource put in the sort of mechanism through which they are going to manage SUDS adoption, and they just have not been given that opportunity. There is still not the clarity in place that there needs to be around the April 2014 date, but I think that a more pressing concern that was raised in the earlier session was around the maintenance of SUDS in the future, and how we can fund that.

Q85 Chair: Do you have a view on who should maintain either existing SUDS, or new SUDS for new developments?

Ian Moodie: There are good examples in IDB areas. The Bedford group of IDBs take on and maintain a number of quite strategic SUDS sites for large distribution centres and centres of industry. That has been managed through a commuted sums approach, where they have taken a commuted sum from a developer and then have invested that money over a number of years in a scheme of continually doing maintenance work. That can be a 20, 30 or 40­year scheme. We think that something like that would be a better and more sustainable approach in the long term.

Q86 Chair: Do you believe that water companies potentially have a role to play in certain areas?

Dr Venables: Yes. They certainly do, and I would emphasise Ian’s point: every SUDS needs a contract for maintenance.

Henry Cator: It is also very important to get the planning correct. There is no point in having a lovely dish to take water, and then planting a fence to keep a cycleway, because you cannot then subsequently maintain the watercourse for someone to put a supermarket trolley in it.

Q87 Chair: Do we have a clear timetable for the reservoir safety guidance?

Dr Venables: That is still with Defra.

Q88 Chair: Do we have a timetable of when it might be?

Dr Venables: I do not know it.

Chair: Can I thank you most warmly on behalf of the Committee for being with us this afternoon, and being so generous with your time in answering our questions as part of this inquiry? We are very grateful to you. We stand adjourned for the formal session, but we carry on, if we may, in private session.

Prepared 14th February 2013