National Audit Office report on managing flood risk

By agency reporter
November 29, 2020

A new report by the National Audit Office (NAO) finds that the government is on track to achieve its target for better protecting 300,000 more homes from flooding by March 2021 but does not have a comprehensive measure of its progress in reducing the overall level of flood risk across England.

The government set the Environment Agency (EA) a target of better protecting 300,000 homes from flooding between 2015 and 2021, through an investment of £2.6 billion. The EA is on track to meet this target within its budget. Since 2015, over 700 new flood defence schemes have been introduced, providing better protection for over 242,000 homes. On average, EA has spent £2,750 for each property with an annual likelihood of flooding of at least one per cent. By providing better protection for 242,000 homes, EA’s investment programme has delivered valuable benefits for people, with flood risk being substantially lower for many thousands of homes in England.

The ‘homes better protected’ target is an easy to understand performance measure, but on its own does not provide a good view of progress in tackling overall flood risk. It does not provide any indication of what has happened to flood risk for non-residential buildings, agricultural land and other infrastructure. The headline figure of 242,000 homes better protected also does not take account of properties that have become less well protected due to factors such as housing development, climate change and the condition of flood defence assets. EA uses its National Flood Risk Assessment to estimate the number of properties at risk of flooding each year and estimates that there are 50,000 fewer properties with an annual likelihood of flooding of at least one per cent in 2020 compared with 2016. Changes in methodology during the period mean this figure is not wholly reliable, but it provides an indication of the overall impact of the programme.

Following the 2019-20 autumn and winter floods, the number of properties at risk as a result of the condition of EA flood defences and other infrastructure assets increased by 171 per cent from 70,000 in 2018-19, to 189,000 in 2019-20. In the March 2020 budget, the government provided £120 million of additional funding for 2020-21 to fund over 600 projects to repair EA assets damaged in the autumn and winter floods. Of these, 151 have been completed so far, 80 per cent are expected to be completed by the end of 2020. For the remainder, EA is aiming to have measures in place to mitigate any immediate risks arising from potential floods in winter 2020-21. Research commissioned by the EA estimates that the cost of repairing and maintaining flood defences could increase by between 20 per cent and 70 per cent a year as a result of climate change.

The NAO has found that there are gaps in the government’s understanding of public spending for flood defence. Without this knowledge, it cannot assess whether local authorities and other organisations have the resources they need to manage flood risk effectively. The Department for the Environment, Food and Rural Affairs (Defra) has committed to reviewing local government funding for flooding to ensure it is fair and matches the needs and resources of local areas, but a date for this has not been set.

The government’s approach is designed to ensure deprived areas do not miss out on investment, but the proportion of funding for flood defence going to the 20 per cent most deprived areas has reduced substantially since 2014. The government requires many flood schemes to be part-funded by communities, local authorities or businesses in the private sector. The system includes provisions for deprived communities who may have difficulty raising this type of investment. However, very few of the homes better protected in 2019 were in deprived areas; the proportion rose from four per cent in 2011, to 29 per cent in 2014, but then declined to eight per cent in 2019. Defra believes this decline is because most of the possible schemes in deprived areas have been completed, although it has not carried out any analysis to support this explanation.

The government has announced that investment in flood defence will increase substantially to £5.6 billion for the period to the end of March 2027, with the aim of better protecting 336,000 properties and reduce flood risk by up to 11 per cent. Defra is confident that this increased investment, together with other sources of funding such as that raised by local communities, will be above EA’s estimate for the required level of long-term funding for flood defence. However, the level of these other sources of funding is uncertain.

In July 2020, a ministerial policy statement set out the government’s aim for the nation to be more resilient to the challenges of flooding and coastal erosion. The EA published its new strategy in September, which states a vision for “a nation ready for, and resilient to, flooding and coastal change – today, tomorrow and to the year 2100.”

The EA’s new strategy and the government’s policy statement are a significant step forward, but lack clarity in important areas. Many of the actions in the policy statement are not time-limited or measurable, and some important commitments are not expected to be implemented until well into the future. Neither the policy statement nor the EA’s strategy quantify the level of risk reduction the government expects to achieve in the long term. Defra has committed to developing a national set of indicators to measure and demonstrate success but not until spring 2022.

The NAO recommends that the government provides a clearer sense of direction on what it aims to achieve, and what the measures of success will be for the 2021-2027 flood defence programme. Working with the Ministry of Housing, Communities and Local Government, and HM Treasury, Defra should develop a clear understanding of whether flood risk management funding for local authorities is adequate to cover the level of flood risk individual authorities face and report on this each year starting from 2021-22. The EA should report on the geographical distribution of investment in its annual reporting and the amount of investment directed to deprived areas, to help inform policy decisions and government priorities.

Alongside the new report, the NAO has launched an interactive data visualisation tool which helps people to understand the flood risk and investment in flood defence in their area.

Gareth Davies, head of the NAO, said: “Flooding and coastal erosion put lives, livelihoods and people’s well-being at risk. As our climate continues to change, and severe weather events become more common, flooding will impact more people.

“Although EA is on track to better protect 300,000 homes from flooding by 2021, there is still no comprehensive measure to show that flood risk in England has reduced, even though the current programme is coming to an end. Looking ahead to 2021-27, although the government has set a clear ambition, the lack of robust measures to track progress mean it will be difficult to demonstrate that its £5.6 billion investment provides an adequate response to the changing risk and good value for taxpayers.”

The majority of funding for flood risk management comes from central government departments (Grant-in-Aid funding). The Environment Agency also raises income from local authorities (local levy) together with income from a number of other sources. Local communities, local authorities and businesses in the private sector can raise funding towards a flood defence scheme (Partnership Funding) and there are also charges on local properties (drainage charges collected by Internal Drainage Boards). Investment undertaken by other organisations such as the Highways Agency and private sector water companies may also contribute to reducing flood risk.

* See the interactive data visualisation tool here

* Read Managing flood risk here

* National Audit Office https://www.nao.org.uk/

[Ekk/6]

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