Potential ‘funding gap’ for flood defence after cuts

There is a potential million-pound “funding gap” for flood defence systems, claim MPs in a critical report out today. The Public Accounts Committee report adds communities in at-risk areas may […]

By Vicky Ellis

There is a potential million-pound “funding gap” for flood defence systems, claim MPs in a critical report out today. The Public Accounts Committee report adds communities in at-risk areas may not be guaranteed insurance within two years.

In the report, MPs looked at the how the Department for Environment, Food and Rural Affairs (Defra) and the Environment Agency manage flood risks. They expressed concern about plans to rely on local funds to stump up an extra £30million than they have in the past. The Agency’s budget for flood risk management was recently cut by more than 10%.

Margaret Hodge MP, Chair of the Committee of Public Accounts said today: “There is a big mismatch between what the Agency reckons it needs to maintain current levels of flood protection and the budget being made available.

“The Department sees more funding coming from local sources – including businesses and local authorities. We are sceptical that this will be possible when local authorities and businesses are themselves under financial pressure.”

Defra challenged the report’s criticism, saying at least £70 million from other sources will supplement Government funding over the next three years under a new Partnership Funding system.

A spokesperson 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.”

Recently the annual cost of flood damage has been £1.1 billion and is set to rise while 5.2 million homes are at risk of flooding. The report also suggests many of these houses may not be able to get insurance.

Ms Hodge added: “The current agreement between the Government and the insurance industry runs out in 2013. A new agreement is needed urgently.”

Defra said it was working with insurers to make sure flood insurance will “remain widely available”. A spokesperson added: “As part of these discussions, over the next few months we will consider whether there are feasible, value for money ways of targeting funding support to those most in need. We will make further announcements in the spring.”

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