Home / News & insights / Insights / Current spending plans may mean an extra £3 billion in future flood damages

Current spending plans may mean an extra £3 billion in future flood damages

The widespread flooding in recent months has resurfaced tense exchanges in Parliament about current funding levels for flood risk management. Is more being spent than ever before or has it been cut? Either way, is enough being done?

The Adaptation Sub-Committee’s role is to provide independent evidence-based advice to the UK Government and Parliament about preparing for future climate change. Increasing flood risk is the greatest threat to the UK from a warmer world.

There are many ways to cut the funding cake, budgets are adjusted frequently and outturn expenditure levels are usually different again. A new ASC policy note brings together and makes transparent the picture of flood spending in England.

This shows that more is being spent over the current four year period than the previous four years but there are some important caveats. The Government’s figures are in cash terms, rely on external contributions being secured, and assume unringfenced money provided to local authorities is being spent on flood alleviation. Less is being provided by central Government than was over the previous four years, even in cash terms. Contributions are not yet secured in many cases. Local councils seem to be spending more than half of their floods money from Defra on other things.

Looking at four-yearly totals makes sense given flood defence is a long term business but it is undeniable that spending took a sharp dip in 2011/12. It has not yet recovered, despite Defra finding what it can to top-up spending each year. In the search for spending reductions there were in fact two rounds of cuts imposed in 2010. The first was within weeks of the Coalition Government taking office after the May election. This saving, not widely recognised, is particularly notable as it reduced the spending baseline against which subsequent cuts are being judged.

The two rounds of cuts in 2010 reduced the Environment Agency’s flood defence budget by £138 million (21%) within the space of six months. Capital grants including for defence construction were the hardest hit, being reduced by 32%. Revenue funding, for maintaining defences and dealing with flood events, is in steady decline. As a potential warning, the percentage of important flood defences that are below target condition has more than doubled since 2011.

It is worth noting that anyone forming a government in 2010 would have been faced with the same financial situation. The previous administration did not announce detailed spending plans before the election but were planning to halve overall public sector net investment during the period.

Either way, not enough is being spent, and we can expect the number of households at flood risk and damages from flood events to be on the increase. The policy note estimates that current spending even with rising external contributions is more than half a billion pounds behind the amount needed to avoid increasing flood risk. Flood defences deliver fantastic value for money, preventing £8 in future damages per £1 invested. But the flip side is also true, that money not spent means future damages will be higher than they need to be. The cuts imposed mean floods will happen that could be cost effectively avoided.

Even using modest assumptions, limited spending over the current period means we can expect an extra £3 billion in avoidable flood damage in future years. That’s equivalent to a 2007 scale flood event that could be prevented if more funding was in place.

Read our policy note on flood spending in England for further information.