Mark Shepherd, Manager, General Insurance, ABIWe can expect to hear lots of talk about difficult decisions ahead of the Spending Review on November 25, when the Chancellor will announce his plans for the use of public money over the course of this Parliament.
George Osborne has indicated capital expenditure at Defra is safe from cuts. In a statement provided to the ABI earlier this month, Floods Minister Rory Stewart commented, "Flooding can devastate lives, homes and businesses. That’s why we are investing in flood protection at record levels, with an unprecedented six-year commitment of £2.3 billion to better protect an additional 300,000 homes by 2021." The ABI welcomes this confirmation of funding, that we fought hard to secure and which will protect homes and businesses, and save money in the long run.
However, with DEFRA’s resource budget set to be cut by 30% over the next four years, sadly there remains doubt about an equally vital area of spending – that of flood defence maintenance.
Building a brand new house should provide shelter for decades to come, but that only holds true if you also invest the necessary time and money in keeping the walls and roof in a good state of repair. The same applies to this nation’s flood defences. Spending millions on new defences is only part of the job. Neglect the vital maintenance to keep our flood defences in the right condition and that valuable investment is left in danger of crumbling at just the time it is needed the most.
The Environment Agency's annual regional revenue maintenance budget for 2010-11 was just over £100 million but this spending was reduced to £60.7 million in 2014-15, which is approximately a 40% cut. Flood defence maintenance needs to be considered alongside investment in building defences to prevent the deterioration of new and existing defences. At a time when the impact of climate change is growing and nation’s flood risk is increasing, it is short-sighted to cut back on the funding which keeps the defences we have, and are set to build, in good working order.
In the wake of the 2013/14 winter floods, there was not only a financial price to pay. Memories of the damage done to communities up and down the UK should still be fresh in the minds of those in Whitehall who are looking at what savings the country can afford to make. As the families who had to spend months out of their wrecked homes, and the thousands of home owners who rely on flood defences to keep them safe, would tell them – cuts to flood defence maintenance are not affordable.
Mark Shepherd is Manager, General Insurance at the Association of British Insurers.