Funding of Flood and Coastal Erosion Schemes

Andy Braine
Following consultation with a number of interested organisations, the Department for Environment Food and Rural Affairs (Defra) has announced changes to the way funding will be allocated to flood and coastal defence projects.

The Department for Environment Food and Rural Affairs (Defra) recently consulted with a number of interested organisations and authorities on the ‘Future funding of flood and coastal erosion risk management in England’. A summary of responses to the consultation was published on 23 May 2011. Based on these responses, Defra has announced changes to the way funding will be allocated to flood and coastal defence projects.

Previously, a limited number of schemes would be totally funded without the need for local or private sector support. This had the potential for local issues and needs to become less of a priority than the nationally driven targets.

The new partnership approach to funding flood and coastal resilience will mean Government money is potentially available to contribute towards the costs of any worthwhile scheme. As previously, the exact funding levels will be based on the number of households protected, the damage being prevented, and the other benefits a project would deliver. Overall, more schemes are likely to go ahead than if the previous ‘all or nothing’ approach to funding were to continue.

The reforms also aim to provide improved transparency and greater certainty over potential funding levels from the general taxpayer for every flood and coastal defence project. It will also allow local areas to have a bigger say in what is done to protect them. The new approach puts added emphasis on providing support to those most at risk and living in the most deprived parts of the country, whilst encouraging the localism agenda and giving more influence for communities to decide on what is important to them.

Key funding figures

  • Defra expects to spend at least £2.1 billion on flooding and coastal erosion over the next four years
  • The £2.1 billion consists of roughly £1 billion capital (approximately £261 million per year) and around £1.1 billion resource, which includes ‘programme’ spend such as maintenance, flood forecasting, and incident response
  • Defra remains committed to fully funding local authority new burdens under The Flood and Water Management Act. Up to £36 million a year will be provided directly to lead local flood authorities
  • On top of the £2.1 billion from Defra, local authorities will be spending money supported by formula grant from the Department for Communities and Local Government. This was around £100 million in 2010/11

As a result of the investment that Defra is making, it is anticipated that better protection to 145,000 households will be delivered by March 2015. This is in addition to the households with better protection as a result of investment in the previous spending period from April 2008 to March 2011. During this period, the Environment Agency and other operating authorities were able to exceed the target that was set of providing improved protection for 145,000 households. In the end they were able to better protect 182,000 homes.

This change in funding application will require a change in mindset both from central government and local communities. The ability to develop an integrated plan to attract local and central government support will be critical.

Utilising our extensive experience with the Environment Agency, utility companies, local authorities and developers we are ideally placed to help develop robust business plans and funding applications. We will ensure that once funding is secured an integrated procurement and contractual framework is developed and managed to ensure that the benefits are realised within the available funding.