Flood funding

Evidence from the Local Government Association (LGA) on flooding

Purpose

This submission provides evidence of councils’ recent experiences of managing floods, flood risk and funding for flood defences. It also sets out opportunities for improvements in the provision of flood risk defences nationally.

About the LGA

The LGA is the national voice of local government. We work with councils to support, promote and improve local government. We are a politically-led, cross-party organisation that works on behalf of councils to ensure local government has a strong, credible voice with national government. We aim to influence and set the political agenda on the issues that matter to councils so they are able to deliver local solutions to national problems.

We are a membership organisation. In total, 423 local authorities are members of the LGA for 2012/13. These include English councils, Welsh councils via the Welsh LGA, and fire, national park, passenger transport and police authorities.

Key points

· As Lead Local Flood Authorities, councils are working hard to manage flood risk, protect communities and businesses from floods and help them recover. In 2012 an estimated 205,000 properties were protected from flooding as a result of investment in flood defences. An estimated 7,800 properties were impacted by the 2012 floods and councils played a pivotal role in helping affected communities to recover.

· Councils recognise the importance of partnership working in all aspects of flood management - reducing flood risks, funding for flood defences and responding to flood events. They welcome the principle of Partnership Funding for flood defences. It potentially allows more schemes to go ahead than the previous system and establishes an important link between the beneficiaries and flood defence investment. However, councils feel that there are improvements to be made to the new Partnership Funding model and would like to work with Environment Agency and Defra in reviewing how communities and the nation can get the best value-for-money from limited public funds.

· A number of councils in 2012 have worked tirelessly to alleviate the exceptional hardship faced by some of their communities, such as from repeated flooding and structural damage to their roads and infrastructure. Further support is needed to allow these places to recover.

· Councils are already working with developers to introduce Sustainable Drainage Systems (SUDs) to reduce flood risk and over 40% of new build have connections to SUDs. We urge Government to produce an efficient, effective and value-for-money system for SUDS, including a sustainable and cost-effective solution for funding the long-term maintenance of SUDs.

· Councils are working locally with the Environment Agency and other partners in finding long-term sustainable solutions to the withdrawal of maintenance activity by the Environment Agency. However, the Environment Agency must ensure that its withdrawal does not place additional cost burdens on councils and local taxpayers.

Councils are working to ensure they help reduce flood risk and support their communities and businesses to recover from flooding.

Helping places and businesses to recover

2012 was an exceptional year in terms of the weather, the wettest on record for England, and councils were at the forefront of a multi-agency response to deal with emergencies and help communities and businesses recover. Preliminary assessments by the Environment Agency indicate that over 7,800 properties flooded in 2012.

Councils supported communities in a number of ways, for example: Tankers and pumps were deployed in Staffordshire and in East Riding of Yorkshire council to clear flood waters from the roads. Teignbridge District Council had given out more than 3,000 sandbags in a four day period and pulled mechanical sweepers from scheduled work to prioritise requests for street sweeping to prevent water build-up in high risk areas. Nottinghamshire County Council ensured alternative emergency accommodation was provided as needed and the council worked with private care providers to ensure vulnerable people received services. In Devon, where communities have repeated floods, the county council arranged special drop-in meetings with the Environment Agency, districts and other flood risk partners, to gather information about the flooding incidents.

Some communities have endured multiple rounds of flooding, before they had recovered from the last occurrence. In July 2012 the LGA wrote to the Secretary of State for Communities and Local Government, the Rt Hon Eric Pickles MP, to highlight the exceptional levels of hardship and greater recovery costs faced in these areas. We argued that such places should be able to access additional support from central government and proposed that in such circumstances the Government’s contribution to the Bellwin scheme should be increased to 100% (from 85%).

Councils are effectively managing risks of development in areas of flood risk

Councils avoid unnecessary development in areas of risk and ensure new build developments which are in areas of risk are more resilient to flooding. Evidence from 2011/12 shows that Environment Agency advice continues to be followed in the vast majority of cases with over 99% of new residential units decided in line with Environment Agency flood risk advice.

Southampton City Council, working in partnership with the Environment Agency, promote safe developments within flood risk areas through incorporation of a suite of measures, such as resistance and resilience measures within buildings and completion of a Site Flood Plan detailing how users of the site can avoid being placed in danger from flood hazards. As part of its regeneration scheme along the River Aire, Leeds City Council has delivered a number of developments with resilient design features.

Councils are investing in flood and coastal defence schemes under the new Partnership Funding model

Councils have welcomed the new Partnership Funding model for funding of flood and coastal defences, using their own funds to leverage in Environment Agency funding (Flood Defence Grant in Aid [1] ) as well as other sources. The new model enables an important link to be made between local beneficiaries and flood risk investment and potentially enables more schemes to go ahead that meet local priorities than the previous model of funding. Whilst the policy was introduced in May 2011, the Environment Agency was only able to apply funding under the new model from 2012.

A range of successful schemes are now progressing under the Partnership Funding approach, including the £21milion scheme in Morpeth, which Northumberland County Council has committed to contributing up to £12 million, protecting a further 1,000 homes. In Warrington, the borough council provided funding alongside contributions from a statutory undertaker and a housing developer. Following substantial flooding in 2012, West Sussex County Council recently announced a funding package of over £8 million to help fix highway drainage hotspots, and improve the drainage systems. In Louth, Lincolnshire, a new scheme to create flood storage reservoirs has recently been given the go ahead with funding from a range of partners including Lincolnshire County Council, East Lindsey District Council, the Environment Agency and two drainage boards.

Councils experience of Partnership Funding to date has highlighted a number of improvements that could be made to maximise the value-for-money of different sources of funding to support flood defences:

· The Partnership Funding process should be simplified to maximise local investment. The current Partnership Funding process makes it difficult to secure other sources of funding. The current approval process for new flood defence works (which can help unlock development) is too long and complex, involving up to one year before final funding approval is given. Councils are pursuing schemes but are finding that the low level of confidence to lever–in funding from either the authority or its potential funding partners, make long term planning difficult.

· There should be faster allocation of funding. Councils are concerned about the time taken to access what are relatively small amounts of funding from the local levy. [2] One council had its Regional Flood and Coastal Committee approve its local levy allocation in June and is still trying to access the funding. They have spent most of the allocation in good faith yet still await the cash. Another council has been waiting for over a year since their local levy funding having been approved and allocated more than a year ago.

· The Partnership Funding model should support a more diverse set of local priorities. The Environment Agency Grant funding is allocated on a prioritised basis nationally to secure the maximum outcomes as represented by the Partnership Funding Score. This tends to mean smaller, more rural and dispersed areas are unable to compete for funding. Other places, such as Calderdale have catchment areas that are characterised by narrow valleys with industry, commerce and critical infrastructure in the flood risk area and little residential accommodation. Consequently Environment Agency funding contributions to most schemes in Calderdale will be very low. Most businesses in the worst affected areas are very small and many have survived because of temporary subsidy of business rates by the Council.

· The Lincolnshire and Norfolk coastal defences protect some of the most productive agricultural land in the world. The topography of reclaimed fen land is low lying and extends well beyond the immediate coastal hinterland. The fens of Cambridgeshire are drained successfully because of the coastal defences many miles away. In these circumstances, the mechanism of partnership funding will not lead to strategic protection of land required for food security. It is not feasible for local communities to fund the necessary protection measures. There is an additional problem in that agricultural land is not valued for its long term strategic purpose. Such projects would not meet the criteria for Partnership Funding.

The funding model should also support a more diverse range of priorities in order to:

· Reflect the needs of small and dispersed communities.

· Release wider benefits beyond direct local beneficiaries.

· Support growth – the recent £60 million additional Growth Fund announced in the Autumn Statement demonstrates that there is a funding gap for schemes that can also deliver regeneration and growth objectives.

Other public funds outside Environment Agency funding should be able to support ‘shovel-ready’ schemes with funding gaps. According to the Environment Agency, it is expected that only £38 million of the total pot of £968 million for flood defences will be raised from private sources by 2014/15. Securing private sector contributions in the current economic climate is particularly challenging. In 2011/12 councils contributed £26 million through the local levy to their Regional Flood and Coastal Committees. The Environment Agency are expecting local levies to total £84 million by 2015. In addition to local levies, many councils have and will continue to make their own individual contributions to local schemes. Some councils have schemes that are ‘shovel-ready’ and have multiple benefits such as helping to meet economic growth outcomes, but are unable to press ahead owing to funding gaps. Authorities who have attempted to use the European Regional Development Fund have found that it is not possible to use this source of funding to provide partnership funding to flood defence schemes. The LGA would like the criteria to be reviewed so that it can be used to match other funding streams.

Councils are taking the initiative to find alternative sources of funding, such as Community Infrastructure Levy (CIL). The Portsea Island Coastal Strategy (led by Portsmouth City Council [3] ) has been developed in partnership with the Environment Agency, and is expected to be part funded by CIL funds and similar schemes are being developed in Warrington and Southampton. It is therefore important that the Environment Agency should work with councils developing the CIL charging schedule to ensure that the need and associated costs of flood defence projects are considered.

Councils are working to ensure the integrity of their roads infrastructure to support their local economies.

This summer’s rainfall and flooding has caused substantial damage to local highways and transport infrastructure in a number of areas. This situation is compounding the hardship being felt by affected local businesses and communities, hampering their ability to recover. Council staff inspect damage and make infrastructure safe for road users. Councils’ estimates (in October 2012) of damage occurred ran into several millions of pounds:

South Tyneside £2.4 million

Newcastle £7-8 million

Blackburn with Darwen £490000

Northumberland £1.6 million

Devon £5 million

Calderdale over £1 million

Following the 2007 floods the Department for Transport set up the Emergency Capital Highways Maintenance Fund, that provided funding for such exceptional roads and highways infrastructure damage. In the absence of a similar fund councils have had to divert funding from planned improvements to support their local economies as at present capital expenditure is not eligible under the Bellwin scheme. The Bellwin scheme should be reviewed so that it takes into account the exceptional roads damage that places can suffer from extreme weather, such as heavy rainfalls and subsequent flooding.

Councils and their taxpayers should not be adversely burdened as a result of Environment Agency’s withdrawal from maintenance activities 

The Environment Agency’s withdrawal from uneconomic maintenance activities means that affected land owners and places will have to seek alternative arrangements. The impact of this change varies greatly across the affected areas and in some places Internal Drainage Boards have been proposed as a possible solution. It is crucial that Environment Agency’s withdrawal from maintenance activities does not result in additional burdens on councils and that replacement arrangements are agreed with communities and councils before the Environment Agency withdraws.

Councils are already reducing flood risk through implementation of Sustainable Drainage Systems (SUDs)

Sustainable Drainage Systems have an important role to play in reducing flood risk and reducing the amount of water that enters the drainage infrastructure. Councils are already working with developers to introduce SUDs to reduce flood risk, with over 40% of new build having connections to SUDs. For example:

· Cambridgeshire County Council has worked with developers at Lamb Drove, in Cambourne, to introduce a SUDs solutions to a small development of 35 affordable houses. The site has avoided a new storm sewer connection, which will save residents money (approximately £30 a year per household) as it will avoid the annual payment of storm water disposal changes to the sewerage undertaker. Gloucestershire County Council has worked with a local school to introduce a SUD system to prevent flooding of the school and to control water from a nearby spring.

· Councils are frustrated by the delays in the publication of the SUDs national standards and implementation of SUDs Approval Bodies (SABs) which would provide certainty for developers and councils in the design and approval of suitable schemes. Government has now clarified that the new regulations will not commence until April 2014 at the earliest.

We urge Government to continue to work with the local authority expert SUDs panel to:

· produce a set of national standards that provides the certainty that developers need, and;

· provides a sustainable and cost-effective solution for funding the long-term maintenance of SUDs beyond 2018.

Long term investment in water infrastructure is needed to reduce flood risk

The LGA’s priority for water industry reform is to secure investment in water infrastructure that supports growth and increases resilience to extreme weather including drought and flash flooding events, both of which we have seen in the past year. If we are to deliver the number of new homes we need, we will need investment in new reservoirs, drains and pipes to support planned growth. And existing infrastructure needs upgrading if it is to cope with increasingly volatile weather.

Conclusion

Councils have a strong record in working with partnership with the government’s agencies and others to protect its places and residents and want to be able to do more. There is already a very good working relationship at the national level between the LGA, Defra and Environment Agency, and we are therefore keen to continue discussing improvements in how the sectors can work together, including funding issues, to improve the country’s resilience to flood risk.

25 January 2013


[1] The Environment Agency is responsible for allocating central government funding to manage flood and coastal erosion risk in England. This funding is known as Flood Defence Grant in Aid (FDGiA). It goes to flood risk management authorities (RMAs) - that is, the Environment Agency and English local authorities and internal drainage boards (IDBs). Together, they use it to pay for a range of activities including flood defence schemes that help reduce the risk of flooding and coastal erosion.

[2] Local authorities raise a levy from households (included in Council Tax calculation and passed to the RFCC). It can be used to help fund local flood risk and coastal protection projects which do not qualify for full central government funding. Local Levy can also contribute to flood and coastal defence schemes which are part funded by Flood Defence Grant in Aid. This levy funding is allocated by the Regional Flood and Coastal Committees (RFCC) to local priority projects. Under the new Flood and Coastal Resilience Partnership Funding process, Local Levy can be used to contribute to flood and coastal defence schemes which are part funded by Flood Defence Grant in Aid. Levy funds can be saved and carried forward from one year to the next and used to fund high cost schemes. This is different to FdGiA which must be spent within the financial year that it is allocated.

[2]

[3] Partnership Pays - An introduction to the future funding and management of

[3] flood and coastal erosion management projects for developers and private investors

Prepared 18th February 2013