Government to bring forward flood defence scheme funds

The government is set to bring forward a major funding package to help make up for a £600m black hole in its £2.3bn flood investment programme, Building understands.

Whitehall sources told Building a government announcement on bringing forward funding for flood defence schemes was “imminent”, after it was criticised last week by a cross-party Department for Environment, Food and Rural Affairs (Defra) committee report, which identified a funding gap putting 300,000 homes at potential risk of flooding.

As part of the 2013 Spending Review, the government announced a six-year capital settlement to improve flood and coastal erosion management infrastructure between 2016-2021. The government committed £2.3bn of funding for flood defences, but the funding relied on £600m of “external contributions” to go ahead.

To date, only £40m has been raised through private companies in 2014-15, with local authorities and local enterprise partnerships contributing a further £108m.

According to data supplied by the Environment Agency construction programme, schemes that are suffering private funding shortfalls include the flagship £485m Thames Estuary Phase 1 Programme, which needs £9.3m. £5.9m is still needed for the Port Clarence and Greatham South Flood Alleviation scheme in Northumbria and £1.1m for an upgrade to the Great Yarmouth Tidal Defences.

Supermarket chain Morrisons, which is set to benefit from construction of a £13.7m flood defence scheme in Skipton, Yorkshire, said that private companies had “no part to play” in financing public flood projects. A Morrisons spokesperson said: “Flood defence work requires multi-million pound investment, and responsibility for funding schemes should remain with the Environment Agency - in this case helped by the local enterprise partnership.”

A £1.1m funding shortfall for the Skipton scheme was eventually secured through the York, North Yorkshire and East Riding (YNYER) Local Enterprise Partnership’s Growth Deal, which was given extra funding from government to invest in infrastructure projects.

Mary Dhonau, chief executive of the Know Your Flood Risk campaign, said it is almost impossible to make private companies contribute towards flood defences, which can cost millions: “It [funding for schemes] isn’t working. The proportion that local authority and regional funding is paying for schemes means that ultimately it is all coming from the same pot just by different routes.

“Smaller businesses aren’t in a position to put funds towards these projects.”

Defra cross-party committee chair Anne McIntosh said more needs to be done to encourage private-sector involvement. “Encouraging more investment from water companies who already invest in flood defence and attracting investment from the insurance sector and pension funds could solve the issue,” she said.

An Environment Agency spokesperson would not comment on funding being brought forward but said: “We will be making record levels of investment in flood and coastal erosion risk management projects; £370m in 2015/16 and then the same in real terms each year, to 2020/21.”