Source · Select Committees · Public Accounts Committee
Recommendation 8
8
Deferred
Environment Agency targets 98% of high consequence flood defence assets at required condition.
Conclusion
The Agency is responsible for maintaining existing flood defence assets that it owns. Its modelling showed that it is best value for money to have 98% of its high consequence assets at required condition. Timely maintenance is important because if an asset fails it is then more expensive to repair.10 The Agency divides flood defence assets into high, medium and low consequence asset systems depending on the number of properties they work together to protect, with high consequence systems protecting the most properties. Flood risk management assets are assigned a condition grade on a scale from one to five using a visual asset inspection. Most of the Agency’s assets are set a target condition grade of 3 (Fair). ‘Below required condition’ means the asset is in condition 4 or 5, or below its target condition.11
Government Response Summary
The government agrees and states the Agency is working on evidence to identify the optimal balance of capital and maintenance funding, noting £25 million was moved to maintenance for 2023–24. They commit to continue this work and write to the Committee by Spring 2025 with an updated assessment after the next spending review.
Government Response
Deferred
HM Government
Deferred
3.1 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2025 3.2 The Agency is working on improved evidence to help identify the optimal balance of capital and maintenance in order to maximise value for money. The department agreed with HM Treasury to move £25 million from the capital budget into its maintenance budget for 2023–24. 3.3 Rebalancing budgets is best done in a managed way. Longer term fixed budgets provide stability and certainty, which allows costs efficiencies and productivity improvements through packaging of delivery. However, unexpected events or fluctuations in project delivery, such as storm damage and inflation, means that rebalancing midway through an investment programme can increase value for money. Such switches are always done on the basis of a rigorous assessment between the Agency, Defra and HM Treasury of the value for money, and outcomes achievable. 3.4 The department and the Agency will continue to work together to identify the optimal balance of capital and maintenance, and, following the next spending review, will write to the Committee by Spring 2025 with an updated assessment of value for money and impacts for the remainder of the 6-year programme.