Source · Select Committees · Public Accounts Committee
Recommendation 20
20
Accepted
Flood defence programme forecast to protect 40% fewer properties than originally committed
Conclusion
The Agency’s current forecast is that these 1,500 projects will provide better protection to 200,000 properties by the end of the programme, a reduction of 40% on the original commitment of 336,000. Defra is yet to agree with HM Treasury the formal reset of the programme and there are factors which could reduce the forecast further:38 a) To reach the forecast of 200,000 properties better protected, the Agency will rely on projects for which it has low or medium confidence of delivering.39 b) The Agency told us that its larger projects (those more than £10 million) are harder to deliver: they need larger teams; tend to be more controversial; take longer to get planning consent; or can be subject to more changes in the scheme design. Around half complete more than two years late and a similar proportion cost at least 25% more than expected.40 c) More than 50% of projects in the capital programme are to be delivered by other risk management authorities such as local authorities. The Agency considered these projects are riskier because delivery is less within its direct control.41 d) Due to the deferment of the underspend in the first two years of the programme, and with investment already at record levels, EA will need to invest an average of almost £1 billion for each of the remaining four years of the programme.42 e) More of the schemes in this capital programme are small compared to the previous programme: 1,200 of the 1,500 projects will cost less than £3 million yet these have to go through the same steps as all other projects. The Agency is looking at how it can streamline processes such as business case approvals for smaller schemes.43 35 Q 27 36 Q 19; C&AG’s Report, para 17 37 Q 25; C&AG’s Report, para 2.4–2.5 38 Q 27 39 C&AG’s Report, para 16 40 Qq 33–34 41 C&AG’s Report, para 2.30 42 Q 36; C&AG’s Report, para 21 43 Qq 20, 36 14 Resilience to fooding Funding distribution
Government Response Summary
The government agrees and states the recommendation is implemented, with the Agency having already undertaken a detailed assessment leading to a robust forecast of 200,000 properties better protected by March 2027. The Agency is also preparing further improvements to approvals processes for smaller projects and streamlining business cases.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 The Agency has undertaken a detailed assessment of deliverability of the capital programme. This involved getting the latest project information from local teams within the Agency, other risk management authorities and supply partners. From this, the Agency has undertaken an assessment based on project forecasts, confidence levels, and previous experience. Based on this assessment, the Agency’s current forecast is that a target of 200,000 properties better protected would be a robust forecast for the programme by the end of March 2027. 2.3 At the end of the third year of delivery (March 2024), the Agency forecast that it will have achieved approximately 90,000 properties better protected, which would mean it has delivered 45% of the target half-way through the programme. The Agency forecasted by March 2025 it will have achieved 114,000 properties better protected and will also have over 60,000 properties linked to projects that will be in construction. 2.4 In the previous programme, between 2015 and 2021, the Agency and its partners completed more than 850 projects to better protect more than 314,000 homes as well as nearly 600,000 acres of agricultural land. The government’s £5.2 billion flood programme between 2021 and 2027 benefits both urban and rural communities, with approximately 40% of schemes, and 45% of investment expected to better protect properties in rural areas. The investment in projects around the country is in line with government’s partnership funding policy that values a range of benefits including properties protected, environmental improvements and economic benefits. Decisions on future capital spending on flood risk management will be subject to the next Spending Review. 2b. PAC recommendation: In the Treasury Minute response, Defra and the Agency should also set out what further changes are under consideration to make it easier to get smaller projects approved. 2.5 The government agrees with the Committee’s recommendation. Recommendation implemented 2.6 Policy choices and delivery improvements made in the £5.2 billion floods programme support smaller and more rural schemes. The Frequently Flooded Allowance ringfences £100 million in the programme to address some of the specific challenges faced by communities that have suffered repeated flooding, particularly those that are smaller and have struggled to secure necessary funding. 2.7 The Agency has also developed multiple measures to improve the delivery of smaller projects. The Agency has simplified the business case process for projects under £3 million including clearer business case templates (launched in November 2023). It has also increased delegations to enable local assurance and approval of projects with appropriate controls and introduced simpler evidence requirements for small projects where the case for action is clear (since June 2023). 2.8 The Agency is preparing further improvements to approvals processes to support smaller projects. For example, a new business case and appraisal approach for surface water projects is being considered which could allow multiple small projects in the same drainage area to be packaged together, reducing the average cost of producing a business case. The £25 million Natural Flood Management Programme is also streamlining business case and appraisal approaches for natural flood management which will make investment easier in future. The National Flood Risk Assessment (NaFRA2) will be available across England by the end of 2024 which will reduce the future costs and time incurred in the early stages of business case development by reducing the need for modelling studies. 2.9 The government and Agency’s approach shows a continued commitment to deliver value for money for the taxpayer and to deliver schemes that reduce flood risk across the country.