Flood Defence Budget Cut in UK

Severe flood warning
Severe flood warning

There’s something not quite right about the UK Government’s policy on flooding. The agreement between government and the insurance industry is in a mess without any sign of renewal or replacement. The original agreement was made between the then Labour government and the Association of British Insurers (ABI) whereby, in return for the government spending more on flood defence schemes, the insurance industry would promise to keep insurance costs down for house holders in flood plains and areas prone to flooding.

This Statement of Principle is about to end in June 2013, and without any continuation or extension insight, we are experiencing some anxious times for flood prone property owners across the UK. Insurance costs – both the premium and excess – could well sky rocket. This may well leave some properties uninsured, and may well result in all sorts of financial chaos for owners and mortgage lenders, with property prices in free fall.

Flood Defences

But to make matters worse, DEFRA, the government department, announced in February 2013 that they will be spending £294 million on flood defences. Well, £294 million may seem quite a lot, you might say. But consider that from 2008 until 2011, the government of the day (Coalition currently, Labour previously) spent around £350 million on flood defences each year.

In effect, the government is cutting flood defence spending at a time when the Statement in Principle between insurers and government is under discussion for renewal. As a central part of the agreement, the government was to work on flood prevention schemes. So in other words, by cutting flood defence money, the government seems unlikely to be carrying out its part of the agreement (to increase flood defences) in the future.

This is a critical time for property owners in flood areas in the UK. There is clearly a long way to go before the current government cares about what it is to live in a flood prone area, but also just how flooding will affect people and the economy across Britain in the future.

Flood defences can save money in the long term. The Environment Agency calculates that every £1 they invest in flood defences saves £8 in the long term. Just ask the insurance industry how much they have had top pay out in recent years, following the floods in 2007 onwards.

In response to the government announcing it is in effect cutting the flood defence budget, Mary Creagh MP, Labour’s Shadow Environment Secretary, said:

“Flooding is the biggest threat the UK faces from climate change, yet the Government will spend less on flood defences next year than Labour invested in 2008. Every £1 invested in flood defences saves £8 later and prevents untold human misery.

“Flood-hit communities are growing ever more anxious over the availability and affordability of flood insurance once Labour’s deal with the insurance industry expires in June. Incompetent Ministers have done nothing for two years – they need to get a grip on flood insurance and ensure that people in the 200,000 high-risk properties are able to insure their homes.”

Source: Labour Party, The Guardian, The Telegraph

3 thoughts on “Flood Defence Budget Cut in UK

  1. Matthew_Brookes

    - Edit

    It’s nice to see another angle to this. I read a BBC report listing all the different flood defence projects the UK government are working on, as if to hide the fact they have actually just cut the budgets!

  2. I don’t like the idea of budgets being cut unnecessarily, but isn’t it possible that after 4 years of high(er) spending on flood defence projects, there is no longer a need to keep the overall budget as high?

  3. Everything is being cut in UK – police, military, civil service. Sorry to be pessimistic, but it was probably inevitable that the flood defence budget would be cut too.

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