''Where does the buck stop on flood risk?''

31 January 2012

Five million properties in England – around one in six – are at risk of flooding and the annual cost of flood damage is at least £1.1bn. The situation is only going to get worse with ageing flood defences and climate change so the issue is a national priority – but it is not clear who is ultimately responsible for managing the risk of flooding.

These are the conclusions of the Public Accounts Committee which said it was difficult to work out where the buck stops on this matter and there was huge uncertainty about whether there would be enough money to maintain and improve flood protection in the longer term – and, indeed, who would pay.

In 2010/11 the Department for Environment, Food and Rural Affairs (Defra) spent £664m on flood and coastal risk management, 95 per cent of which went to the Environment Agency (EA). In 2009 the agency said its flood risk management budget needed to rise by 9 per cent during the spending review period (2011/12 to 2014/15) to sustain current levels of protection. But during the same period the flood risk management budget was reduced by over 10 per cent.

Defra insisted that through efficiency savings and the improved use of resources the budget cut would not reduce capital expenditure on flood defences. But the EA has not yet adjusted its long-term investment strategy and could not tell the committee what the scale of the long-term funding gap would be.

At the same time, Defra said it was trying to encourage more funding from local sources including private companies and from local authority levies – it said that it wanted to increase local contributions from £13million to £43m but, the committee said, expecting an increase in local authority contributions when their resources are reducing may well be over-optimistic.

Committee chair Margaret Hodge said: "The department tells us that it is not ultimately answerable and shares the responsibility with the Environment Agency and local bodies. But the department has no way of knowing whether local flood management systems are adequate or when it should step in. It is not acceptable that local people should be left in doubt about where responsibility and accountability lie."

She went on: "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.

"All of this is fuelling uncertainty over the future availability and affordability of insurance cover for buildings in areas at risk of flood. The current agreement between the Government and the insurance industry runs out in 2013. A new agreement is needed urgently."

Friends of the Earth's director of policy and campaigns Craig Bennett said that climate change was threatening millions of homes next to rivers and coastlines and was pushing up insurance premiums, even making some properties uninsurable.

"Ministers must urgently drop senseless planning reforms that could increase the risk of new houses being built on floodplains," he said. "The government must reduce the risk of costly flooding in Britain by slashing climate-changing emissions, which will also boost our economy and create thousands of jobs."