Defra faces £600m deficiency in flood defence budget

Defra is struggling to fill a £600m black hole in its flood defence spending that was expected to be filled by businesses and local authorities.

Following the wettest winter ever in 2014, the Government announced a £2.3bn capital investment package to upgrade Britain’s flood defences, with £600m slated to come from the private sector and local authorities.

But a “relatively small” amount of money – around £40m – has come from private companies since 2011, and it will be “difficult” to raise the necessary cash, according to an Environment, Food and Rural Affairs (EFRA) Committee report released on Tuesday.

Committee chair Anne McIntosh MP said: “It remains unclear how the £600 million target of external funding for the next six-year investment programme will be met, even with the Autumn Statement announcement that business contributions on flood defence projects will become a deductible cost for tax purposes.”

Attracting investment

A Defra spokesman, however, said the private sector contribution is expected to rise to £140m by the end of the financial year.

He said: “This compares with just £13 million in the previous four years. We are working closely with the Environment Agency to attract more investment and are introducing tax relief for business contributions to flood risk management projects from 2015 onwards to encourage more investment.

“In addition, [the Government] is making record levels of capital investment, spending £2.3 billion over six years in improving defences right up to 2021. This is in line with what the Environment Agency predicts will be the optimum investment for our flood defences over the next 10 years.”

Leaky defence

The Government funding plan received criticism from Labour when it was announced back in December, for the “£600m black hole that communities are expected to fill themselves”.

Friends of the Earth also said that the total figure of £2.3bn was not enough to fully protect homes and businesses.

“Whatever happened to ‘money no object’?” asked campaigner Guy Shrubsole. “These flood defence plans simply don’t hold water and are wholly inadequate to keep pace with rising flood risk.”

Lack of clarity

The EFRA committee also criticised Defra for a low morale among employees and a lack of transparency concerning its plans to cut its budget in coming years

McIntosh said: “The Department has not identified which specific policies and programmes will be reduced in future years, in spite of repeated requests for clarity. Defra must be more transparent on where emergency money, such as winter floods response funding, is found. We also need to know what the impact of cuts will be on policy delivery.

Brad Allen

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