Climate change adaptation - Environmental Audit Contents

3  Flood defences

19. Increasing flood risk is the greatest threat from climate change in the UK.[46] The chance of a catastrophic flood in England within the next 20 years (one causing over £10 billion of damage) was assessed by the ASC as around 10%.[47] The ASC calculated that:

    In 2014-15 almost three-quarters of the flood defence systems in England will not be maintained according to their identified needs. This is despite additional maintenance funding being provided by the Government after the 2013-14 winter storms.[48]

The National Audit Office concluded that as of December 2013 five million homes were at risk of flooding in England.[49]

Investment plans

20. The Government has committed £2.3 billion of capital funding for flood defences up to 2021.[50] Subsequently, Defra published its Six-year investment plan in 2014,[51] detailing where this money will be invested, and the Environment Agency published a renewed Long-Term Investment Strategy in 2014.[52] The Defra Secretary of State has announced that this funding will protect over 300,000 properties, reduce flood risk by 5% and save the economy £2.7 billion by 2021.[53] Our ASC witnesses welcomed the announcement of these flood investment programmes. Daniel Johns told us that:

    The long-term investment scenario is exactly what we would like other sectors to be doing: looking that far ahead, looking at a range of different climate scenarios, and then making sensible investment choices in the context of that evidence.[54]

21. Lord Krebs cautioned, however, that even with the new flood defences, flood risk will still increase in the future. He told us that "we are investing … quite a lot of money in flood defences, but not enough to protect homes at the same or equivalent level of risk that they are protected at today".[55] The ASC found that:

    Despite the [flood] defences in place … Kingston-Upon-Hull can expect the most river and coastal flooding over time. As well as some households in the high and very high flood risk categories, Hull has 100,000 households in the medium and low flood risk categories. This risk profile means there might be little flooding year to year, interspersed by occasional very significant flood damage.[56]

22. Paul Crick from Kent County Council told us that "the Environment Agency very rarely now 100% funds schemes".[57] The Environment, Food and Rural Affairs Committee calculated that "in order to deliver on their flood investment programme, Defra will need to make efficiency savings of at least 10% and attract external contributions (e.g. through partnership funding) of £600 million or more".[58] Dan Rogerson outlined some of the details of that 'partnership funding' process:

    This is a six-year programme and many of these schemes have been discussed in local areas for a long time. There is a huge head of steam behind the delivery of those, for communities, and all the departments coming together … Some of these are very big schemes but even right down to some quite small schemes there are ways in which local authorities, businesses and others, can pull things together.[59]

He felt it was important to bring in money from outside Government to ensure as many schemes as possible could go forward, but also so that those contributing could see the value of what was delivered.[60]

23. Paul Leinster, Chief Executive of the Environment Agency, told us that the partnership funding approach had set in place

    a consistent set of criteria that all risk management authorities have to abide by. That sets a tariff and you get money for the number of houses protected, for the amount of farmland protected, for habitat created, but it is a transparent system that everybody sees and it is a level playing field for all authorities.[61]

As a result, for some schemes the Government will provide 100% of the funding, but for others the local authority will need to get funding from private partners.[62] We heard that some local authorities were having difficulty in finding private partners. In 2014-15, only £40m of the £148m coming from outside central government was from private sources.[63]

24. We heard that one of the key obstacles to funding flood schemes was the way in which premises were valued. Paul Crick told us that schemes to protect residential properties received a higher benefit-cost ratio in the Environment Agency scoring than schemes to protect business premises, which therefore require a greater contribution from partnership funding.[64]

25. Allen Creedy from the Federation of Small Businesses (FSB) explained that in a recent survey of FSB members many were "relatively positive about working in partnership with the Environment Agency and … there was a willingness even to make financial contributions and to assist in design." But he cautioned that in order to invest, small businesses "were looking for something back" such as reductions in premiums or rates.[65] Paul Leinster of the Environment Agency was concerned about the overall feasibility of the flooding targets:

    Going forward, the conditions that have been applied to that additional money is 300,000 more households being protected, a further 10% efficiency and to bring at least 15% of the funding in from partnership funding. We believe that we will have to do more than that to meet that 300,000 household target.[66]


26. The challenge of flood defence planning is made more difficult by having to adjust plans in response to specific events. The ASC noted that after the 2013-14 winter flooding, the Government committed an additional £20.5 million towards the Somerset Levels and Moors action plan, without a cost-benefit assessment. The post-flooding dredging work cost £5.7 million, which the ASC calculated delivered flood risk benefits of only £1.90 per £1 spent.[67] Daniel Johns told us he was concerned that, with funding scarce, the additional money made available for the Somerset Levels might have been at the expense of more cost-effective investment elsewhere,[68] and indicative of a reactive approach to flood investment:

    The question is whether you should have a flood-risk management strategy that is reactive and try to build defences where it flooded last, or if you should try to build defences where it is most likely to flood next and can deliver the most benefit. Obviously, the strategy should be the latter, and we recognise that given severe events—the Somerset Levels have obviously experienced widespread flooding for a period of time and lots of damage was caused—at the same time when there is limited funding, you have to be aware of those kinds of trade-offs. If you are spending money in some parts of the country, you are not spending that money elsewhere.[69]

27. Dan Rogerson acknowledged that there was some criticism of the money provided for the Somerset Levels, "where the number of properties inundated was much lower than in other areas". He considered that the money was required because the duration of the floods meant that "'there were much wider impacts that we needed to deal with".[70]

Soft flood defences

28. Alex Nickson of the Local Adaptation Advisory Panel told us that:

    Increasingly what we are looking at is not just delivering flood defences as a comforting concrete wall between you and something wet, it is about using green infrastructure that enhances businesses, enhances quality of life, attracts and retains inward investment. Some of that is just not captured and valued because the partnership funding score's ancestry is in coastal flooding and it is designed to reduce the total number of homes, so it is about quantity rather than perhaps the quality of flood risk reduction.[71]

The Woodland Trust told us that there was evidence that sustainable land management, including tree-planting could offer significant adaptation benefits, including flood alleviation. For instance, they told us about

    a farmer led approach to sustainable land management in the uplands which found that tree planting had major benefits in reducing water run-off and improving water quality from improved grassland. The project demonstrated that planting tree belts across the slopes led to increased infiltration of water into the soil—more than 60 times that of neighbouring sheep grazed pasture without tree belts. When this effect was modelled across the catchment the result was a potential reduction in peak stream flows of as much as 40%.[72]

The Woodland Trust saw this as "clear evidence that integrating trees into upland farms could play a part in reducing flood risk downstream".[73]

29. Sarah Mukherjee from Water UK explained, however, that research into such 'soft' flood defences was still an early stage, and that Ofwat:

    have been quite challenging, and rightly so, about it because they want to make sure that the money we are spending on this has a direct customer benefit and is not just a whole load of good things for the environment without being able to show that we can reduce customers' bills or keep them flat as a result.[74]

Certain farming practices are adding to flood risk. In the wake of the dramatic flooding of last winter, the ASC wrote to the Environment Secretary to highlight the "wider drivers of flood risk … such as some agricultural practices".[75] Likewise, Daniel Johns felt "it would be unfair to expect the taxpayer to fund [land management schemes] when it might just exacerbate the problem [and] in some cases is due to inappropriate farming practices".[76] Dr Ceris Jones from the NFU wanted to see a conversation started "with the farmer about those areas of the farm that are least productive that might be suitable for flood risk management and how farmers are recognised for that contribution".[77] Green Alliance said that "climate adaptation measures on farms should be rewarded through farm payments".[78] Dan Rogerson, though positive about the potential for soft flood defences to deliver wider benefits, cautioned that "it is quite often easier to be definite about what the effect will be if you have a hard defence".[79]

30. The Natural Capital Committee has been examining how the valuation of natural capital benefits, such as those from soft flood defences, might be used in policy-making. The NCC's first report in 2013 set out a "framework that will help natural capital to be hard wired into economic decision-making in this country … so that we can better understand which of our natural assets are critical to our well-being".[80] In their second report, it presented a preliminary analysis of the state of natural capital in particular areas and identified those at high risk, including "protection from natural hazards" such as flooding.[81] The NCC's third report, published earlier this year, repeated its earlier call for Government to work with business and NGOs in developing a strategy and supporting 25-year plan to protect and improve natural capital.[82] That strategy needed to be underpinned by three components: a robust and consistent 'measurement', 'accounting' and 'valuation' of natural capital. Investments in natural capital could "deliver significant value for money and generate large economic returns".[83] The NCC singled out the potential in eight specific areas, most of which could help to reduce the likelihood or impact of flooding—woodland planting, peatland restoration, wetland creation, intertidal habitat creation, urban greenspaces and improving the environmental performance of farming. The private sector and civil society have a significant part to play, the NCC said, because they own or are responsible for the majority of natural assets. Its report sets out a range of different funding options these include: capital maintenance payments from natural capital asset owners:

    Some form of transfer is required from the social benefactors [of ecosystem services] to the private owners [of natural capital assets] to ensure that organisations are fully compensated for the benefits that they provide to others through maintenance of their natural assets. This could take the form of a subsidy or of a private payment though some form of Payment for Ecosystem Services. Our accounting framework provides a robust method for calculating the appropriate level of transfer and monitoring its ongoing delivery should Government, the private sector or a charity wish to fund the provision of public goods on privately owned land.


31. Flooding is the biggest adaptation risk, and will increase even if significant resources are devoted to it. The Government has sometimes followed what the ASC has called a 'reactive' funding strategy, prioritising the most recent flooding events rather than long term objective needs.

32. Funding for flooding adaptations must be sourced and matched against the value of the benefits available. The challenge is to balance the revenue to natural asset owner against the needs of potential beneficiaries, who currently do not fully pay for those reduced-flooding benefits. The Natural Capital Committee's work is at the heart of this question and it has been doing invaluable research in this area.

33. The Government should make a clear commitment to allow the Environment Agency to allocate flood defence funds according to its objective cost-benefit models without political interference.

34. The Government has indicated that it will leave it to the next Government to decide the NCC's long-term future. The NCC's work on valuing ecosystem services, including those providing 'soft' flooding defences, show its importance for climate change adaptation, but also offers the prospect of finding funding mechanisms to link natural capital 'owners' and adaptation beneficiaries. The next Government must act as quickly as possible to put the NCC on a long-term footing, and encourage it to develop those funding mechanisms.

46   ASC, Managing climate risks to well-being and the economy (July 2014), p33 Back

47   ibid, p33 Back

48   ibid, p27 Back

49   NAO, Strategic flood risk management, (November 2014), p4 Back

50   Defra, Reducing the threats of flooding and coastal change  Back

51   Defra six-year investment plan (December 2014) Back

52   Environment Agency Long-Term Investment Strategy (December 2014) Back

53   Defra, "Government press release: £2.3 billion to be spent on new flood defences" (2 Dec 2014) Back

54   Q272 Back

55   Q272  Back

56   ASC, Managing climate risks to well-being and the economy (July 2014), p35 Back

57   Q21  Back

58   Environment, Food and Rural Affairs Committee, Eighth Report of Session 2014-15, Defra performance in 2013-14 HC802, para 31 Back

59   Q317 Back

60   Q318 Back

61   Q81 Back

62   Q81 Back

63   Defra, Reducing the threats of flooding and coastal change Back

64   Q21  Back

65   Q204  Back

66   Q85 Back

67   ASC, Managing climate risks to well-being and the economy (July 2014), p45 Back

68   Q275 Back

69   Q275 Back

70   Q319 Back

71   Q16  Back

72   Woodland Trust (CCA0037), para 7 Back

73   Woodland Trust (CCA0037), para 7 Back

74   Q101 Back

75   ASC, Managing climate risks to well-being and the economy (July 2014), p23 Back

76   Q277 Back

77   Q105 Back

78   Green Alliance (CCA0021)  Back

79   Q315 Back

80   Natural Capital Committee, The State of Natural Capital: Towards a framework for measurement and valuation (April 2013) Back

81   Natural Capital Committee, The State of Natural Capital: Restoring our Natural Assets (March 2014) Back

82   Natural Capital Committee, The State of Natural Capital: Protecting and Improving Natural Capital for Prosperity and Wellbeing (January 2015) Back

83   ibid, p7 Back

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Prepared 11 March 2015