Posted: Thursday 9th June 2011

The proposed new approach to funding local flood schemes whereby grants are largely allocated according to the number of households protected must be extended to ensure critical infrastructure assets are not left vulnerable, a report published by the Institution of Civil Engineers (ICE) recently has said.

In the report, Flood Risk Management: A Local Issue of National Importance, the leading engineering body stresses that while flooding is largely a localised issue it can have significant national consequences, particularly the impact on interdependent economic infrastructure that underpin local and national economies such as power, transport, waste and water supplies. The 2007 summer floods cost the UK £3.2 bn with an additional £660m in damage to critical infrastructure and key services.

In the proposed shift to a ‘payment for outcomes’ approach projects would be allocated varying levels of central funding largely according to the number of households protected. Supplementary funding, either from local levies, third party beneficiaries or private finance, would need to be found to plug any shortfall between the central grant and the upfront cost of the project.

ICE says that while this is a positive step towards finding alternative sources of funding for flood risk management solutions - crucial in the face of significant public funding cuts - it warns that too much focus on households could undermine the protection and resilience of local, regional and even national infrastructure, which may be located outside of the residential area. While reference is made to ‘ resilience of public infrastructure’ in Government’s proposed principles for the new approach it is not clear exactly what falls into this category and it is not a determining factor for how funding is allocated.

It calls for Government to extend the formula to reward the full range of current and future outcomes that a project can provide for the community including the benefits to vital regional and national economic infrastructure. This would help build resilience for power stations, roads, bridges and waste plants outside the residential area but vital for the local and, in the case of major disruption, the national, economy.

The report also raises concerns that projects may be scaled back if supplementary funding cannot be easily sourced. A more holistic approach would also serve to make projects more attractive to a wider group of beneficiaries and possible investors, for example infrastructure asset owners.

Chair of the report Dick Thomas said “Flooding is a local issue that can have major repercussions for the national economy, particularly the impact on critical infrastructure assets that underpin economic activity and, due to their interdependent nature, can quickly cause widespread disruption beyond the local area. The new funding approach could be a very powerful tool for changing the way we fund local projects but it is crucial that the formula is carefully designed to encourage private investment and protect our critical infrastructure.

”This should also reinforce the shift away from the unsustainable ‘defend at all costs’ approach,” he added.

The report also highlighted concerns about how the ‘duty to cooperate’, which places an obligation on local flood risk management authorities to cooperate and act consistently within the framework of local and national flood risk strategies, can be effectively implemented across the various risk authorities.

This unprecedented collaboration will be especially important in ensuring that the right expertise is available in the newly formed Lead Local Flood Authorities (LLFA) to effectively plan and implement flood schemes. In a two-tier authority, county councils might be designated as the LLFA and receive central government funding, however the skilled individuals may reside in the district or borough councils.

Sharing existing skills within and across local authority boundaries will therefore be crucial and ICE recommends that local authorities that already possess a significant wealth of expertise are designated as ‘centres of excellence’, to service authorities across a wider geographical area. This approach would help local authorities newly responsible for flood and costal erosion risk projects to know what skills are available and where, thus avoiding unnecessary duplication across regions.

Thomas continued: “Water does not obey administrative boundaries, so this new approach will require an unprecedented culture of cooperation within and across local authority limits. It will be imperative that they consider how their flood risk management may impact on other regions and focus on strategies that exploit opportunities to create lasting partnerships, share data and skills, and harness private investment.This will require support and guidance from Defra and the Environment Agency to be successful.”

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