Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Scarce local authority resources and low levels of private sector investment are barriers to the...
Conclusion
Scarce local authority resources and low levels of private sector investment are barriers to the effective management of flood risks, especially given the impact of Covid-19. Lead local flood authorities (unitary authorities or county councils) are responsible for managing local flood risks. Their funding for this is not ring- fenced and there are concerns over the level of revenue funding available to local authorities. The Department understands that, taken as a whole, local authorities spend more on managing flood risks than they are allocated through the Ministry of Housing, Communities and Local Government’s (MHCLG) local government funding formula. However, it recognises that it needs a better understanding of why spending varies so much across individual authorities and whether the formula for allocating funding to each local authority accurately reflects its level of flood risk. The partnership funding model has been successful in attracting additional investment to flood defence projects, but the level of private sector contributions has fallen to just 7% between April 2015 and March 2021, down from 25% between April 2011 and March 2015. While the Department and Agency want to see this percentage increase, the impact of Covid-19 on contributions is uncertain. Recommendation: The Department and the Agency should identify areas where there is likely to be a shortfall in local authority resources and private sector contributions to ensure the effective management of flood risk in local areas. They should report to us on their assessment by July 2021.
Government Response
Acknowledged
HM Government
Acknowledged
2: PAC conclusion: Scarce local authority resources and low levels of private sector investment are barriers to the effective management of flood risks, especially given the impact of Covid-19. 2: PAC recommendation: The Department and the Agency should identify areas where there is likely to be a shortfall in local authority resources and private sector contributions to ensure the effective management of flood risk in local areas. They should report to us on their assessment by July 2021. 2.1 The government agrees with the Committee’s recommendation. Target Implementation date: alongside Spending Review 2021 2.2 The Agency tracks partnership funding for the capital programme monthly to identify what contributions need to be secured. The Agency also monitors those schemes that most reduce flood risk but are at highest risk of not delivering to focus on viable schemes where shortfalls in funding are preventing their progression. The government’s policy statement of June 2020 on flood and coastal erosion risk management (FCERM) sets out a number of actions that will further strengthen incentives for generating partnership funding. 2.3 Funding for flood risk management is part of the overall Local Government Settlement. Depending on local decisions, the settlement for 2021-22 will see councils’ core spending power in England rise from £49 billion in 2020-21 to up to £51.3 billion in 2021-22, a 4.6% increase in cash terms. The majority of local government funding is un-ringfenced, recognising that local authorities are best placed to decide how to meet the major service pressures in their local areas. 2.4 The government has committed to review local government funding for statutory flood and coastal erosion risk management functions, and as part of Spending Review 2021 (SR21) is considering the priorities for local government finance reform, including how funding is allocated to councils.