NAO: Strategic Flood Risk Management

In the face of increasing flood risk in England and pressure on defenses, the Environment Agency has improved the cost effectiveness and prioritization of its flood risk spending. However, Defra and the Agency have limited resources and current spending is insufficient to meet many of the maintenance needs the Agency has identified for its flood defenses.

According to today’s report by the National Audit Office, in the areas where maintenance of flood defenses has been given a lower priority – typically, where there are few homes – this will increase the danger of deterioration of defenses, thereby increasing flood risk.

The government made an extra £270 million available following the winter storms in 2013. This included an additional £35 million for asset maintenance in both 2014-15 and 2015-16. In cash terms, this has restored maintenance funding to 2010-11 levels. However, this represents a real terms decrease of 6 per cent between 2010-11 and 2014-15. Excluding the one-off funding of £200 million provided following the winter floods, total funding decreased in real terms by 10 per cent in the same period.

Sustaining the current standard of flood protection is challenging in this context, especially as climate change increases the load on flood defenses.

Today’s report found that the Agency’s projects for the construction of new defenses provided good value, and that it has a robust process in place to prioritize its spending on maintenance, based on the benefits and risks identified in flood risk models.

The Agency, however, funds maintenance in higher risk areas first, and so may not be able to fund maintenance elsewhere. It recognizes that it needs to make difficult decisions around whether to continue maintaining some flood defenses. As of August 2014, 1,356 asset systems (50% of the total) with a lower benefit-cost ratio– were being maintained to a minimal level. These are likely to deteriorate faster as a result, increasing replacement costs in the long term where assets are retained.

The Agency holds estimates of how maintenance expenditure will affect the lifespan of various types of flood defenses and has used this information nationally. However, it has not communicated at a local level how reducing the prioritization of maintenance in some areas might affect flood risk and lead to asset failure.

The Government aims to encourage communities to take steps to manage their own flood risk. The Agency takes an active role in sharing good practice, building local capacity, and engaging directly with communities. The NAO found, however, that the expectations of communities could be better managed, for instance when maintenance regimes are changed.

The Department is working with local authorities, encouraging them to publish quickly their local strategies for dealing with future floods. As of March 2014, only 16% had done so, despite this requirement being in place since 2011.

Press Release