Institution of Civil Engineers (ICE) Director General Nick Baveystock said: “The ICE has raised concerns in the past about finance for flood risk management in light of reduced public spending and changes to the way projects are funded. The move to give local authorities more responsibility is sensible but because most flood budgets will not be ring-fenced, there is a danger that it could be used to make up shortfalls in other areas. We need to move away from a costly and increasingly impractical ‘defend at all costs’ approach and think innovatively about how to prevent and build risk management into the planning for new and existing communities.”
The concerns raised by the MPs came as the Association of British Insurers warned that as many as 200,000 at-risk homes face problems getting insurance after the deal with the Government and insurance industry expires in 2013. For instance in the Great Yarmouth area nearly 5,000 properties are thought to be at risk.
PA
FEARS OVER CASH FOR FLOOD DEFENCES
MPs raised concerns today over whether there will be enough money to maintain and improve flood defences to protect millions of at-risk homes in the future.
The Public Accounts Committee (PAC) also warned it was unclear "where the buck stops" for managing the risk of flooding, as the Department for Environment, Food and Rural Affairs (Defra) has said it is not ultimately responsible for the issue.
Defra told the committee it shares responsibility for flooding with the Environment Agency and local bodies, but the MPs warned the department had no way of knowing if local flood management was adequate and when it should step in.
A report by the parliamentary committee said the costs of flood damage currently stand at around £1.1 billion a year, and are likely to rise with climate change.
Last week, a climate change assessment for the Government warned that the annual costs of flooding could increase to between £1.5 billion and £3.5 billion by the 2020s, and £2.1 billion to £12 billion by the 2080s for England and Wales.
Despite the Environment Agency's prediction in 2009 that its flooding budget needed to increase by 9% during the current spending period to maintain levels of flood protection, funding is being reduced by 10% over that time, the PAC said.
Defra told the MPs that efficiency savings and improved use of resources would mean capital expenditure on flood defences would not be reduced.
But the Environment Agency has not yet adjusted its longer-term investment strategy and could not tell the committee what the scale of the long-term funding gap would be.
Defra also hopes to encourage more funding for flood defences from sources such as businesses and local authorities, boosting contributions from £13 million in the last spending period to £43 million - but it has not yet secured the increase.
Margaret Hodge, chairwoman of the PAC, said the committee was "sceptical" of the possibility of raising funds locally when councils and businesses were facing financial pressures.
She said: "Five million properties in England - one in six - are currently at risk of flooding.
"The annual cost of flood damage is at least £1.1 billion and ageing defences and climate change will increase that bill. So flood protection is a national priority.
"Yet it is unclear where the buck stops and who is ultimately responsible for managing the risk of flooding.
"There is also a great deal of uncertainty about whether there will be enough money to maintain and improve flood protection in the longer term and who will pay."
She added: "It is not acceptable that local people should be left in doubt about where responsibility and accountability lie."
The report said that with local people being asked to pay more towards flood protection and take on more of the risk, the Environment Agency needed to involve communities better in decisions on flood protection.
The PAC also warned that the potential funding gap and concerns over whether local authorities and businesses will increase their contributions were fuelling uncertainty over future insurance cover for buildings in at-risk areas.
The current agreement between the Government and insurance industry to provide cover to households at risk of flooding ends in 2013 and the committee urged Defra to secure a new agreement urgently.
Shadow environment secretary Mary Creagh accused the Government of playing "Russian roulette" with people's homes and businesses, with what Labour says is a 27% cut, year-on-year between 2010 and 2011, to capital spending on flood defences.
She said: "The Government is passing the buck to local councils, asking them to choose between repairing roads and protecting homes from flooding.
"The irony is that this approach may cost more in the long run, as the Environment Agency is unable to predict what schemes will proceed which means procurement costs rise."
Friends of the Earth's director of policy and campaigns Craig Bennett said: "MPs are right to call for adequate flooding defences in Britain - climate change is threatening millions of homes next to our rivers and coastlines, pushing up insurance premiums and making some properties uninsurable.
"Ministers must urgently drop senseless planning reforms that could increase the risk of new houses being built on flood plains.
"The Government must reduce the risk of costly flooding in Britain by slashing climate-changing emissions, which will also boost our economy and create thousands of jobs."
David Symons, director at environmental consultancy WSP Environment & Energy, said there needed to be more certainty around who was responsible for managing flood risks in the UK.
"Today's report comes as Defra and the insurance industry are deep in negotiations on how to insure flood risk homes.
"The current arrangement, where the insurance industry offers cover provided the Government commits to funding flood defences, expires in June 2013.
"If no clear agreement between insurers and the Government is struck within the next year, insurance could become unaffordable for those at risk of flooding."
He added: "The very least the Government should be doing to help is to retain its guidance on new development on flood plains, rather than withdrawing this as part of its pro-development planning reforms."
A Defra spokeswoman insisted the country was better prepared than ever before to deal with a major flood.
She said: "Under the new Partnership Funding system, the most at-risk and deprived areas can receive more money for flood defence schemes, backed by funding from the private sector whenever possible."
And she said local authorities were accountable for local flood risk management and should be the first port of call for affected communities.
An Environment Agency spokeswoman said: "The Environment Agency is always striving to improve the effectiveness and value for money of our services to the public.
"We are already addressing a number of points raised in this report including placing more and more importance on how we work together with communities to agree the best options for local flood and coastal risk schemes."
The concerns raised by the MPs came as the Association of British Insurers warned that as many as 200,000 at-risk homes face problems getting insurance after the deal with the Government and insurance industry expires in 2013.
According to analysis by the ABI, 92 constituencies around England and Wales have more than 1,000 homes at significant risk of flooding.
Boston and Skegness tops the list of the communities with most homes at high flood risk, with 7,550 homes under threat.
The Vale of Clwyd, Folkestone and Hythe, and Windsor each have more than 7,000 homes with a more than one-in-75 chance of flooding in any one year.
Other high-risk constituencies include Runnymede and Weybridge, Clwyd West, Aberconwy, and Nottingham South, the ABI said.
Otto Thoresen, ABI's director-general, said: "We are running out of time to make sure that people in high-risk areas are properly protected from the devastation flooding can cause and the ball is now in the Government's court.
"Insurers want to make sure that every home has access to affordable insurance, should the worst happen, and we're concerned that those people most at risk will lose out unless the Government considers a safety net.
"We are frustrated with the progress of our talks with the Government on this issue and want it to look urgently at a model that would allow flood cover to remain widely available and competitively priced.
"No country in the world has an entirely free market providing universal affordable flood insurance, and action is needed now to avoid 200,000 high-risk homes struggling to afford cover."
The analysis from the ABI of the latest Environment Agency flood data against the 573 Parliamentary constituencies in England and Wales shows the communities with the most homes at significant risk of flooding:
:: Boston and Skegness - 7,550 homes
:: Vale of Clwyd - 7,339
:: Folkestone and Hythe - 7,196
:: Windsor - 7,125
:: Runnymede and Weybridge - 6,541
:: Clwyd West - 6,160
:: Aberconwy - 5,500
:: Nottingham (south) - 5,043
:: Great Yarmouth - 4,965
:: Sittingbourne and Sheppey - 4,295
:: Leeds (central) - 4,209
:: Canterbury - 4,199