Select committee inquiry
Flood Funding
Closed
What the inquiry looked at
“The Committee will be holding oral evidence sessions in January and February to look in detail at spending on flood defences and insurance provision, in view of the importance of minimising flood risk to communities across the country and ensuring affordable flood insurance cover is maintained. Managing Flood Risk - publication of Report NAO Memorandum for EFRA Committee: Flood Risk Manageement in England - An Update of Progress Letter to Owen Paterson from EFRA Committee on flooding matter Letter from Owen Patterson to EFRA Committee on flooding Letter to Richard Benyon from EFRA Committee on The Reservoirs Act 1975 (Exemptions, Appeals and Inspections) (England) Regulations 2013 Further information including details of the Report and evidence taken”
The committee's words, from the inquiry page on parliament.uk ↗.
What the government said
3rd Report - Managing Flood Risk - Volume II (Additional written evidence)
No government response is linked to this report.
3rd Report - Managing Flood Risk - Volume I (Volume I: Report, together with formal minutes, oral and written evidence)
The government responded on 16 October 2013.
Summary written by Accountability Index from the government's response.
The government sets out a mixed position, welcoming the committee's recognition of its long-term capital settlement and support for Flood Re, while stating that it "strongly disagree[s]" on rural protection and does not consider changes to the planning framework necessary.
- On funding, it describes a six-year capital settlement from 2015/16 to 2020/21 (£370m in 2015/16, rising to over £400m in 2020/21) and aims to "leverage at least 15% contributions" from other sources.
- On rural areas, it says it "strongly disagree[s]" that Defra is failing to protect them, and that guidance will be reviewed once upcoming Common Agricultural Policy changes are settled.
- On sustainable drainage, its aim "remains to commence Schedule 3 in April 2014", "subject to cross Whitehall and Parliamentary approval", with task-and-finish groups expected to deliver recommendations in the autumn.
- On planning, it "do[es] not consider that the National Planning Policy Framework needs to be amended" and does not believe there is a case for transferring liability for future insurance costs to planning authorities.
Read the government's response ↗ Read the report ↗ Report an error
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 28 November 2012 to 16 October 2013.
- Report 2 reports
- Government response 16 Oct 2013
What it recommended 8 recommendations · 17 conclusions
1We welcome the Government’s recognition that effective flood protection is essential for economic growth and...
Concluded (the committee's words)
We welcome the Government’s recognition that effective flood protection is essential for economic growth and for the regeneration of key parts of the country. Additional capital funding until the end of the decade announced by the Chancellor in the 2013 spending round is essential for securing flood defences to protect homes and businesses. However, funding has not kept pace in recent years with an increased risk of flooding from more frequent severe weather events and the relatively modest additional sums to be provided up to 2020 will not be sufficient to plug the funding gap.
2Defra, together with the Department for Communities and Local Government, should act as an advocate...
Concluded (the committee's words)
Defra, together with the Department for Communities and Local Government, should act as an advocate for local communities with HM Treasury to secure additional investment for local flood defences. Defra must set out detailed evidence to demonstrate to HM Treasury that flood management capital funding must rise year on year by £20 million over the next 25 years to keep pace with increasing flood threat. This must be matched by a better balance between revenue and capital funding, whether from government or other sources. A review must take place prior to each spending period to ensure that funding is neither excessive nor inadequate in the light of developing scientific evidence on the likely long term impacts of changing weather patterns on flood risk.
3Although the effectiveness of the Partnership model for allocating flood funding will become fully apparent...
Concluded (the committee's words)
Although the effectiveness of the Partnership model for allocating flood funding will become fully apparent in time, we are concerned that only small amounts of private sector funding have been secured to date. Defra must demonstrate in the next 18 months that this model can deliver much greater private sector funding
4The Department and the Environment Agency must simplify procedures to speed up delivery of funding...
Concluded (the committee's words)
The Department and the Environment Agency must simplify procedures to speed up delivery of funding to local authorities for whom efficient cash-flow is vital if project funding is to be secured from private bodies.
5The Government should ensure that maximum use is made of natural methods to prevent and...
Recommended (the committee's words)
The Government should ensure that maximum use is made of natural methods to prevent and manage flooding, which could enable the application of wider funding streams such as those available for EU agri-environment schemes.
6We regret that the current regulatory framework does not permit innovative investment in natural flood...
Concluded (the committee's words)
We regret that the current regulatory framework does not permit innovative investment in natural flood defences by water companies and expect Ofwat’s next Price Review to rectify this.
7The current model for allocating flood defence funding is biased towards protecting property, which means...
Concluded (the committee's words)
The current model for allocating flood defence funding is biased towards protecting property, which means that funding is largely allocated to urban areas. Defra’s failure to protect rural areas poses a long term risk to the security of UK food production as a high proportion of the most valuable agricultural land is at risk of flooding. Defra must require the Environment Agency to amend its scoring system to put a higher value on the benefits delivered by agricultural land, so that such land becomes eligible for a higher proportion of flood defence funding.
8We are deeply concerned at the decision to reduce funding for maintenance of flood defences...
Concluded (the committee's words)
We are deeply concerned at the decision to reduce funding for maintenance of flood defences and watercourses which could leave communities exposed to the threat of flooding despite having benefited from considerable capital investment in flood defences. It is essential that adequate revenue funding is provided to enable the Environment Agency to conduct the necessary dredging and maintenance of watercourses so as to minimise flood risk to local communities
9We recommend that Internal Drainage Boards which wish to undertake maintenance of local watercourses be...
Recommended (the committee's words)
We recommend that Internal Drainage Boards which wish to undertake maintenance of local watercourses be supported in doing so, including by enabling them to retain the funding they currently provide to the Environment Agency for these services.
10We recommend that the Environment Agency continues to provide Internal Drainage Boards and local authorities...
Recommended (the committee's words)
We recommend that the Environment Agency continues to provide Internal Drainage Boards and local authorities with schedules of maintenance work to enable effective co-ordination of such work. Information should be published so that interested parties and the public are fully informed on the activities being undertaken.
11We recommend that the Bellwin scheme be amended to enable local authorities to secure central...
Recommended (the committee's words)
We recommend that the Bellwin scheme be amended to enable local authorities to secure central government assistance for repairing and reinstating roads and other infrastructure damaged by flooding.
12It is not logical that the size of a local authority should determine whether or...
Recommended (the committee's words)
It is not logical that the size of a local authority should determine whether or not it is eligible for central government support in the event of a flood. We recommend that the requirement for a local authority to incur costs of at least 0.2% of its annual revenue budget in order for it to qualify for Bellwin Scheme funding be reviewed. A fairer measure of the impact of an event on a locality must be adopted.
13Three years after enactment of the Flood and Water Management Act 2010, its provisions on...
Concluded (the committee's words)
Three years after enactment of the Flood and Water Management Act 2010, its provisions on sustainable drainage have yet to be implemented. We have previously criticised the Government for failure to reach agreement with key parties, such as local authorities, on how implementation is to be funded and managed, yet Defra is unable to commit to commencement before April 2014. Sustainable drainage is a key aspect of managing flood risk and it is vital that the measures are implemented without further delay.
14Defra must liaise with the Department for Transport and the Department for Communities and Local...
Concluded (the committee's words)
Defra must liaise with the Department for Transport and the Department for Communities and Local Government on measures to encourage local authorities and Highways Authorities to install sustainable drainage measures which will improve the management of water run-off from roads.
15We are disappointed that the coalition agreement’s commitment to end unnecessary building in flood plains...
Concluded (the committee's words)
We are disappointed that the coalition agreement’s commitment to end unnecessary building in flood plains has not yet been translated into effective action. Planning guidance allows building to take place too readily in areas at high flood risk. Local planning authorities need stronger support from the Government to resist inappropriate developments in such places.
16We recommend that the Government review how effective the National Planning Policy Framework has been...
Recommended (the committee's words)
We recommend that the Government review how effective the National Planning Policy Framework has been in preventing new development from increasing flood risk. If necessary, guidance must be amended to enable local authorities to reject planning applications where flood risk will be increased as a result of building in a specific location. Liability for householders’ future costs, for example for increased insurance premiums, needs to be placed on the final planning authority for new developments authorised in areas the Environment Agency considers to be at high risk of flooding.
17Extending permitted development rights, for example to certain house extensions, could have incrementally small but...
Concluded (the committee's words)
Extending permitted development rights, for example to certain house extensions, could have incrementally small but cumulatively significant impacts on the ability of local areas to manage surface water flows. Defra must in future liaise more closely with the Department for Communities and Local Government to ensure that all planning rules are consistent with sustainable drainage aims. We invite Defra to set out the mechanism to be used to establish such closer liaison.
18The Government must now set out how it will reform the planning system to ensure...
Recommended (the committee's words)
The Government must now set out how it will reform the planning system to ensure that new developments do not jeopardise water supplies in areas of water stress, for example by placing a statutory requirement on all those making applications for developments consisting of more than 10 homes or on sites larger than 1 hectare to consult water and sewerage companies.
19We regret the delay in introducing vital measures to improve the reservoir safety regime and...
Concluded (the committee's words)
We regret the delay in introducing vital measures to improve the reservoir safety regime and urge the Government to publish for scrutiny necessary guidance on the regulations at the earliest opportunity.
20We welcome the Government’s increased funding for flood defences which has enabled the insurance industry...
Recommended (the committee's words)
We welcome the Government’s increased funding for flood defences which has enabled the insurance industry to undertake to continue to provide affordable flood insurance under the Statement of Principles regime until new arrangements can be put in place. The Government and insurance industry have had a number of years to consider future arrangements and we regret the delay in announcing a solution. This uncertainty has exacerbated the concerns of householders facing potentially significant rises in insurance premiums. The Government must conclude negotiations urgently on the details of the measures it proposes so as to spell out clearly the arrangements which will apply in the future and end the current uncertainty.
21We were not persuaded that the open market would be able at present to offer...
Concluded (the committee's words)
We were not persuaded that the open market would be able at present to offer affordable insurance to all households. We welcome the Government’s recognition that, whilst premiums should in time reflect a property’s risk of flooding, this 36 Managing Flood Risk transition should only take place over a long timescale. A solution must be found to ensure that insurance is available for those homes built in areas at high risk of flood which would be unable to obtain insurance.
22We endorse in principle the agreement between the Government and the insurance industry to introduce...
Concluded (the committee's words)
We endorse in principle the agreement between the Government and the insurance industry to introduce a levy-funded insurance pool for households at high risk of flooding which will keep premiums affordable for all. Flood Re will make transparent the current implicit cross-subsidy under the Statement of Principles so that householders are fully aware of the contribution they are making. This approach will provide stability for communities and certainty for householders in future.
23The Government’s announcement raises many questions about the operation of Flood Re, in particular how...
Concluded (the committee's words)
The Government’s announcement raises many questions about the operation of Flood Re, in particular how the scheme will be accountable to Ministers and Parliament, and how taxpayers’ interests will be protected in the event of an extreme flood event requiring funding beyond the capacity of the scheme. It is unclear who will bear the costs from such a 1 in 200 year flood event.
24We are also concerned that the approach does not achieve the value for money normally...
Concluded (the committee's words)
We are also concerned that the approach does not achieve the value for money normally required of Government policies. Furthermore, it is not clear how assurances will be enforced to limit the amount of levy to be paid by all householders and maintain premiums at affordable levels for those in the scheme. The regulatory regime must be fully transparent and open to Parliamentary scrutiny.
25Ministers concede that they must publish further details on these issues.
Concluded (the committee's words)
Ministers concede that they must publish further details on these issues. These must be provided urgently so that Parliament can scrutinise fully both the Flood Re scheme proposals and the measures in the Water Bill.