Spending on flood defences has reduced, report claims

Today the National Audit Office has published its 2014 report on flood defence spending. The report claims the underlying spending on flood defences has gone down.

"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 the National Audit Office, said.

"The Agency, as it recognizes, will need to make difficult decisions about whether to continue maintaining assets in some areas or let them lapse, increasing in future both the risk of floods and the potential need for more expensive ad hoc emergency solutions. The achievement of value for money in the long term remains significantly uncertain.”

Defra and the Agency have limited resources and current spending is insufficient to meet many of the maintenance needs the Agency has identified for its flood defences.

According to today’s report by the National Audit Office, in the areas where maintenance of flood defences has 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 government made an extra £270 million available following the winter storms in 2013. This included an additional £35 million for asset maintenance in both 2014-15 and 2015-16. In cash terms, this has restored maintenance funding to 2010-11 levels. However, this represents a real terms decrease of 6 per cent between 2010-11 and 2014-15. Excluding the one-off funding of £200 million provided following the winter floods, total funding decreased in real terms by 10 per cent in the same period. Sustaining the current standard of flood protection is challenging in this context, especially as climate change increases the load on flood defences.

Today’s report found that the Agency’s projects for the construction of new defences provided good value, and that it has a robust process in place to prioritize its spending on maintenance, based on the benefits and risks identified in flood risk models. The Agency, however, funds maintenance in higher risk areas first, and so may not be able to fund maintenance elsewhere. It recognizes that it needs to make difficult decisions around whether to continue maintaining some flood defences. As of August 2014, 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 Agency holds estimates of how maintenance expenditure will affect the lifespan of various types of flood defences and has used this information nationally. However, it has not communicated at a local level how reducing the prioritization of maintenance in some areas might affect flood risk and lead to asset failure.

The Government aims to encourage communities to take steps to manage their own flood risk. The Agency takes an active role in sharing good practice, building local capacity, and engaging directly with communities. The NAO found, however, that the expectations of communities could be better managed, for instance when maintenance regimes are changed.

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

On NAO’s funding claims, Flooding Minister Dan Rogerson said: "The NAO has drawn conclusions on funding based on inappropriate comparisons. We have invested £3.2 billion in flood management and defences over the course of this parliament which is a real term increase and half a billion more than in the previous parliament. This has allowed us to protect 165,000 families and households in vulnerable areas.

?Not only are we spending more than ever before, but we are also ensuring that our investment strategy will deliver long-term value for money. Next month, we will set out the first ever 6-year programme with record levels of investment, which will protect another 300,000 homes by the end of the decade.

Following one of the wettest winters on record we have worked side by side with EA to get our flood defences ready for this winter. We made £270 million available to repair any flood defences that were damaged last winter, to make sure they are ready to protect homes and businesses. Last month the Environment Agency met its deadline to restore flood protection in all areas affected by the winter floods.

The NAO compares two financial years (10/11 compared to either 13/14 or 14/15) rather than looking at the total amount we have spent over this Parliament. This Parliament will see a 5% real-term increase in flood spending, compared with the previous Parliament.

The NAO figures exclude £200 million of additional funding which was provided following the winter floods. Repairs are carried out after every flooding event, large or small, often funded from the Agency’s existing budget. Previous years’ spending therefore also includes costs relating to incident response and repairing damaged flood defences.