§ The Minister for the Environment (Mr. Elliot Morley)
On 12 March 2003 my right hon. Friend the Secretary of State announced the conclusions of our review of the funding and administrative arrangements for delivering a more efficient, effective and accountable flood and coastal defence service. A year on I want to update the House on the progress we have made towards implementing these conclusions, and outline what remains to be done.
We have set in hand arrangements for the Environment Agency to receive a single stream of Defra grant in aid funding from 1 April 2004. This will replace the previous mix of Defra grant for individual capital projects and, in large part, the levies previously raised through local authorities. This should provide the agency with more certainty of funding, allowing them to plan more strategically, while streamlining the procedures associated with implementing flood defence schemes. In future Defra approval will no longer be required for agency projects or strategies which are below £5 million though we will have the opportunity to call in strategies, and projects undertaken outside strategies, which are between £2 million and £5 million. We will also continue to ensure that the distribution of capital funding between the agency and other operating authorities (local authorities and internal drainage boards) is based on our priority scoring system which takes account of the number of people affected in relation to the cost of the project, the environment and benefit cost ratio.
Payment of grant in aid will be linked to robust targets in the agency's corporate plan. The agency may continue to raise limited levies on local authorities, agreed through flood defence committees on which local authorities have a majority, to fund locally important flood defence works beyond Close covered by Defra funding. These local levies are set to raise some £24.4 million in 2004–05.
Work has also started on the procedures for transferring to the Environment Agency responsibility for those watercourses representing the greatest flood risk—the so-called critical ordinary watercourses. This will significantly improve accountability for flood risk with over 2,000 separate lengths of river identified for transfer. The necessary statutory procedures will start shortly with transfers taking place in stages until April 2006. Day to day management of the watercourses can be contracted back to internal drainage boards and local authorities where this is appropriate and agreed. As part of this exercise we are fully digitising the existing main river maps.8WS
The Government also announced the intention to move to a single tier of flood defence committee to remove the bureaucracy and second-guessing of decisions involved in having two tiers of committee in several Environment Agency regions. The Environment Agency has consulted on the proposed successor arrangements and I expect to receive their recommendations for future structures within the next month. I shall consider their proposals and bring forward orders as appropriate.
We have also made progress on a number of other important initiatives to help improve the accountability and delivery of the flood defence service. From 1 April 2004 internal drainage boards will fall under the jurisdiction of the local government ombudsman and we have developed a complaints procedure for individual boards to adopt.
We are also working with the Association of Drainage Authorities and the Environment Agency to develop new targets for the administration and membership of boards but in the meantime I am encouraged that arrangements are already being made for 16 existing boards to merge into three larger boards in the Anglia region, and discussions are taking place in other regions.
Jointly with the Environment Agency we have considered ways in which overheads associated with capital schemes can be reduced. We will be implementing agreed findings and targets for overhead reduction will appear in the agency's corporate plan.
We will be assessing the benefits realised through implementation of these conclusions as part of a three-year review which we will undertake in 2007.
Whilst the funding review conclusions are being taken forward, Defra is simultaneously leading work on a new Government wide strategy for flood and coastal erosion risk management to be underpinned by the principles of sustainable development. This is being taken forward in full consultation with stakeholders and will look across all Government policies. As part of the strategy we are undertaking further work on possible new funding streams to go alongside Exchequer funding which, as we announced last March, will continue primarily to fund the service. We intend that the new strategy will steer the direction of policy over the next 10–20 years and that it will be completed in the coming financial year.
Defra, the Environment Agency and others are putting great effort into implementing the funding review outcomes and developing a new long-term strategy. Implementing flood defence grant in aid from this April is a notable achievement and other substantial reforms to improve accountability and effectiveness will be in place in the next 12 to 24 months.