Funding not sufficient in face of increasing flood risk, pressure on defences in England

Despite improving the cost effectiveness and prioritization of its flood risk spending, current spending by England’s Environment Agency and the Department for Environment, Food & Rural Affairs (DEFRA) is insufficient to meet maintenance needs in the wake of increasing flood risk.

Despite the efficiencies, DEFRA and the Environment Agency “have limited resources and current spending is insufficient to meet many of the maintenance needs the agency has identified for its flood defences,” notes a statement from England’s National Audit Office (NAO), an independent body that scrutinizes public spending for Parliament.

The caution is contained in a report issued Wednesday by NAO, which points out that in the areas where maintenance of flood defences have been given a lower priority – typically, where there are few homes – this will increase the danger of deterioration of defences, thereby increasing flood risk.

The agency’s projects for the construction of new defences provided good value, and the agency has a robust process in place to prioritize its spending on maintenance, based on the benefits and risks identified in flood risk models, the statement notes. That said, it “funds maintenance in higher-risk areas first, and so may not be able to fund maintenance elsewhere.”

That leaves some difficult decisions about whether to continue maintaining assets in some areas or let them lapse. As of August, 1,356 asset systems – 50% of the total – with a lower benefit-cost ratio, were being maintained to a minimal level. “These are likely to deteriorate faster as a result, increasing replacement costs in the long term where assets are retained,” the statement warns.

The Department is working with local authorities, encouraging them to publish quickly their local strategies for dealing with future floods. However, as of March 2014, NAO reports that only 16% had done so, despite this requirement being in place since 2011.

“If we set aside the emergency spending in response to last year’s floods, and give due credit for efficiency improvements, the underlying spending on flood defences has gone down,” Amyas Morse, head of NOA, says in the statement. “The achievement of value for money in the long term remains significantly uncertain.”

NAO cites the following figures:

• properties at risk of flooding as of December 2013: £5 billion

• Environment Agency’s estimate of the replacement value of flood defence assets it maintains: £24 billion;

• total funding for flood risk management in 2013-2014: £606.2 billion; and

• additional funds allocated by government following the 2013-2014 winter storms: £270 billion.