Recommendation 14

For three of the four extreme weather risks that the NAO examined (high temperatures and heatwaves, storms and surface water flooding), there was a lack of clarity on what outcome government is looking to achieve, such as target levels of preparedness, resilience, and an agreement on the level of tolerable risk, based on a well-informed risk appetite. In the case of drought, water companies are required to plan to ensure resilience to a 1-in- 200 year ‘severe’ drought and in their new plans in 2024, to a 1-in-500 year ‘extreme’ drought.26 Defra, the lead government department for droughts and floods, noted that even where risk appetite or the level of resilience you are looking to achieve is defined, funding to achieve this is still competing with other areas of spending. The Cabinet Office highlighted other challenges in assessing risk appetite, including the evidence base on the returns on investment being a lot weaker for some risks compared to others such as floods, and having to make hard choices about where the money comes from to fund resilience.27 Written evidence from the UK Corporate Leaders Group stated that an important starting point for reducing climate risk is to understand the risk appetite of different stakeholders. It suggested that a national conversation around the level of climate risk that is acceptable and the balance of costs and benefits from investment in adaptation would help determine where the priorities are for action and investment.28 23 Q 12; C&AG’s Report, para 10 24 Qq 1, 2, 5, 6, 12 25 Q 2; C&AG’s Report, para 11 26 Qq 13, 70; C&AG’s Report, para 3.2 27 Qq 13, 54; C&AG’s Report, Figure 6 28 UK Corporate Leaders Group (GEX0013) Government resilience: extreme weather 13 Planning for people exposed to different levels of risk