§ The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett)I am pleased to inform the House of the Government's conclusions on the Flood and Coastal Defence Funding Review.
The review was conducted by an inter-departmental steering group which considered the most appropriate means of delivering and funding the flood and coastal defence service. The Government consulted on the steering group's recommendations last year and received over 300 responses. I placed a report on these responses on the Department's website last October.
15WSMost respondents argued that the Exchequer should continue to fund all or most of the flood and coastal defence service, perhaps supported by locally raised funds. The funding and organisational arrangements, and the arrangements for implementing flood defence schemes, were considered to be over-complex and in need of streamlining, but with a strong local input into decision making. The responsibilities for flooding also needed to be made much clearer. There was, however, no clear consensus about what the precise future institutional arrangements should be.
Taking account of these comments, the Government have reached the following conclusions on the review.
The service should continue to be funded primarily by the Exchequer. As a measure of our commitment to this we have increased Government funding in successive spending reviews and following the 2000 floods. Following last year's spending review total provision for spending in England is set to increase to around £564 million by 2005–06, an additional £150 million a year on this year.
We also accept the steering group's argument that in principle a fair proportion of funding should come from local beneficiaries of the flood defence service. No decisions have yet been taken on local funding mechanisms and we are continuing to work on them. For example, one possible option is a charge payable by developers in the flood plain to reflect the general flood defence service provided in those areas. We shall of course pay full regard to comments made on the various options.
In terms of flood defence responsibilities, we have concluded that the Environment Agency should take responsibility for all rivers creating the greatest flood risk. Many of these rivers have already been identified and we will work with the agency in ensuring that they transfer to their control as soon as the necessary statutory procedures can be completed.
The rivers that will transfer to the agency are currently the responsibility of local authorities and internal drainage boards. The performance of those bodies in relation to these rivers has been patchy. There are concerns, for example, about some local authorities not taking any interest in these rivers and over the position taken by some IDBs towards nature conservation. Equally, however, I am aware and value the fact that many local authorities and internal drainage boards do an excellent job.
By transferring responsibility for these rivers to the Environment Agency the Government will place accountability for flood defence on all rivers creating greatest flood risk squarely in the hands of one body, something which will be welcome to hon. and right hon. Members as well as most respondents to our consultation. But we do expect the agency to contract back the day-to-day operational work to the local authorities and internal drainage boards which are willing and able to do the work, and have a good track record. Such contracts will ensure that work is in future undertaken efficiently and effectively but also in a way which is sympathetic to the Government's objectives for both nature conservation and flood protection.
16WSLocal authorities and internal drainage boards will continue to have flood defence and land drainage responsibilities under our proposals, and we shall be considering whether further measures are necessary to influence the way that these are exercised, including in drawing up and implementing water level management plans. We will consider a further elaboration of the Environment Agency's current general flood defence supervisory duty, will be reviewing our high level targets, and will be considering bringing internal drainage boards under the ambit of the local government ombudsman. A particular issue that we shall want to address is the present number and size of internal drainage boards, many of which are very small. We will also seek to ensure that the membership of IDBs is broadened to reflect a wider constituency of interest than at present.
The Government do not propose any change to the present responsibilities of local authorities for coastal defences. We shall look to the coastal local authorities to continue playing a full part in shoreline management plans to ensure that defence measures are properly planned and responsibilities properly attributed between themselves and the Environment Agency, leading to greater clarity for the public.
The Government propose that the Environment Agency's flood defence work in England should—subject to facilitative measures contained in the Water Bill—be funded by a single stream of Defra block grant covering both its capital and revenue expenditure. This will mean that the agency will no longer have to seek individual approval of capital projects below specified thresholds. This recognises the agency's position as a national body and its responsibility for developing and procuring schemes. The agency will, therefore, no longer raise most of its funding from levies on local authorities, which in turn are supported through the local government funding arrangements. We expect to introduce capital block grant from 1 April 2004; timing of implementation of revenue block grant requires further consideration.
The move to a single stream of block grant will remove many of the present uncertainties surrounding the annual funding available to the agency from local authorities. The agency will be able to plan ahead over a longer period than at present, providing greater certainty of delivering the flood defence service across the country. It will also remove the present distinction between capital and revenue work, and the apparently perverse incentive to encourage capital work, which attracts Defra grant, rather than maintenance work which does not.
We also propose that there should be a single tier of flood defence committee. Six of the nine flood defence regions in England have a single, regional, committee but three regions have a second tier of between 3 and 5 local committees. Local committees consume substantial resources in managing them and their accounts, but even more importantly they blur accountability with decisions made by one tier being second guessed by the other. Recognising the need for local input and decision making, we will work with the Environment Agency in consulting local interests to see whether some of the current regions need to be split into, say, two or three smaller parts each served by a single 17WS tier flood defence committee. Facilitative amendments contained in the Water Bill will allow the creation of additional single tier committees.
Many respondents to our consultation were concerned about the lengthy process for approving flood defence schemes. Some of the time taken is irreducible, reflecting the need to design bespoke schemes to meet the needs of the area to be defended as well as the need to obtain planning permission, to carry out environmental impact assessments and, in some cases, to secure compulsory purchase of land or property. But we need to streamline where possible and we are therefore taking action to simplify the present procedures for approving flood defence schemes in Defra. We propose to consider Environment Agency schemes at the "option choice" stage rather than waiting for detailed design. This will mean that the Agency will be given the certainty of Defra funding at an earlier stage and before devoting resources to detailed design.
We shall be looking hard at whether, how and when such approaches might be applied to local authorities and internal drainage boards. The Government also intend to consider further its relationship with the Environment Agency, in the light of the changes we now propose, to see whether, and how, further streamlining might be introduced to reduce the overheads associated with provision of flood defences, especially following the introduction of block grant to the capital programme from 1 April 2004.
The decisions I have announced today are substantive and should result in real improvements. I recognise that we have much work to do with the Environment Agency and other stakeholders in implementing this outcome.
We will also be liaising with the Welsh Assembly Government on issues arising from cross-border catchments.
We shall agree the financial consequences with local authorities and others with an interest. For local authorities, we will adhere to the new burdens principle to ensure that councils are not adversely affected financially by these proposals. We will also honour the undertaking in the Local Government White Paper to ensure that most grant reaches councils as general funding.
We shall be drawing up an implementation plan, with target dates, in the next month or so and I will arrange for this to be published on the Department's Website.
We recognise that flood and coastal defence policy is a long term commitment and requires stability of strategic approaches and structures for delivery. The approach I have announced today, including the roles of IDBs and of local authorities in coastal defence, will be subject to review after three years of operation. We shall want to 18WS assess their effectiveness in delivering a streamlined and more effective service which also properly reflects wider needs including those of nature conservation. We shall also need to take account of currently emerging issues, such as the Government's regional agenda and implementation of the Water Framework directive. These, taken together with the outcome of work on new funding streams will influence whether more fundamental changes might be required in future.