Recommendation 12

HM Government Not Addressed

In October 2025, the government announced major changes to its flood and coastal erosion funding policy. The reforms will make it quicker and easier to deliver the right flood defences in the right places by simplifying our funding rules. This will increase investor confidence, close funding gaps, and reduce administrative burdens on local communities. The new simplified funding rules will optimise funding between new flood projects and maintaining existing defence assets. An integrated set of outcome metrics will support allocation of funding towards the most beneficial interventions. We have retained the principle of partnership funding as it maximises every pound of government investment. It fosters collaborative behaviours by bringing multiple partners together to create the best possible projects and outcomes. Under the new rules, we are giving equal weighting to all types of benefit, noting this doesn’t mean that a hectare of agricultural land has the same amount of benefit as a hectare of housing. This approach differs from the old rules which gave higher payments for properties in comparison to environmental and agricultural benefits. The government is committed to valuing a broad range of the co-benefits of adaptation, including economic and environmental outcomes. All decisions on key government spending are subject to clear requirements through the Green Book to consider national benefits such as mental health outcomes and economic stability. The government will continue to invest in deprived communities, who are disproportionately affected by social vulnerability and health inequalities. Under the new rules, deprived communities will receive at least the same share of investment as their weight in the population. A minimum of 20% of investment will go to the 20% most deprived communities and a minimum of 40% to the 40% most deprived communities, combined over both the next three and ten years. The government will invest at least £300 million in natural flood management over ten years – the highest figure to date for the flood programme. These changes will support projects that not only reduce flood risk but also deliver wider benefits to communities and nature. The government agrees that, under the old rules, smaller-scale and rural schemes struggled to secure funding. We recognise the importance of investing across a wide range of resilience actions, including natural flood management and surface water drainage, and improving access to funding. Under the new rules, we are removing the requirement for projects to demonstrate that properties would move from one risk band to another to be eligible for funding. We are removing restrictions that did not allow projects to have more than 20% of their outcomes as environmental outcomes. New flood projects will be eligible for the first £3 million of project costs, and 90% of costs above this. These measures combined will benefit rural communities who have struggled to access funding under the old rules. Regional Flood and Coastal Committees play an important role in consenting the Environment Agency’s annual programme of investment. They have powers to raise and spend local levy on projects of local significance. There will be improved local choice in the funding programme, because there will be more eligible projects for Regional Flood and Coastal Committees to choose between. Frequently flooded communities are likely to find it easier to attract funding, as Regional Flood and Coastal Committees will have the flexibility to adjust the prioritisation list dependent on local need. Planning and infrastructure policy and flood resilience – the catchment perspective Recommendation at paragraph 89: ‘The Government should initiate consultation on statutory requirements for assessing the cumulative impact of development on flood risk within local and regional plans by the end of 2025. These requirements should be introduced by 2027, ensuring land use policy and planning decisions are aligned with catchment-scale flood management strategies. Delivery should be supported through spatial planning frameworks and statutory, regularly updated Strategic Flood Risk Assessments. To address persistent weaknesses in implementation, the system must also include stronger compliance and enforcement mechanisms for both strategic and site-level Flood Risk Assessments, with requirements for postconstruction inspections to ensure mitigation measures are delivered in practice. In addition, we recommend: • That water companies should be made statutory consultees on major planning applications. • That Defra work with the Environment Agency and farming bodies to develop a standardised approach for compensating farmers who host floodwater or implement natural flood management measures, recognising this as a public good. • That the Environment Agency publish clear guidance for riparian landowners on their statutory obligations and available support, and report annually on enforcemen