It's raining cash to fight floods

Melanie Bien looks at the Government's new plans to protect Britain's high-risk homes

With sunshine finally upon us, it seems a strange time to be talking about torrential rain and rising water levels. But following a government announcement last week, anyone who lives in a house at risk of flooding will be interested in what the Environment Agency calls the "biggest shake-up of flood defence funding for 70 years".

The new plans give the Environment Agency more responsibility and an annual grant for flood and coastal defence work. This replaces the fragmented system currently in place, under which several bodies compete for decision-making and funding.

By 2005-06 the Government plans to spend £564m on improving flood and coastal defences, a rise of £150m on current spending. With the Environment Agency predicting that the risk of flooding will increase 10-fold over the next century, and floods costing the UK an estimated £800m a year, these defences will be essential.

"The new system addresses key deficiencies in the 70-year-old institutional flood defence arrangements, while safeguarding our programme to improve public services like flood warning, emergency response to incidents and our 24-hour Floodline service," says David King, director of water management for the Environment Agency.

He warns that while it is important that the agency is less reliant on local authority levies and can start to take responsibility for all watercourses posing a flood risk, property developers must also be held accountable for their actions. "At a time when climate change is causing adverse weather conditions, it is crucial developers have a responsibility to build properties out of harm's way."

The news was welcomed by the Association of British Insurers (ABI), which last year agreed to continue insuring properties at risk of flooding – as long as the Government carries out its commitment to build and maintain new defences. The devastating floods of autumn 2000, which cost the insurance industry more than £1bn, proved not to be a one-off, and the whole of the South-east was on flood alert at the beginning of this year. That's why the ABI has campaigned for more streamlined decision-making.

"These proposals should help ensure that the increased spending announced last year is used where it's most needed," says Mary Francis, director-general of the ABI.

Norwich Union, the UK's largest insurer, also welcomed the reforms but argues that there is still some way to go. It feels more money will be needed for flood and coastal defences, and says the role of developers needs closer attention, particularly in the light of plans to build many new homes in the South-east.

Norwich Union also wants to ensure that the most vulnerable communities are protected. According to a survey conducted by the insurer, three-quarters of those living in high-risk areas say there are no flood defences in place.

"We've seen this winter that flooding still remains a threat to many communities across the UK," says Nick Pierson at Norwich Union. "We would like to see a review of the criteria used to identify which areas qualify for flood defences by including all the true costs of flooding."

Norwich Union's answer to the issue of insuring homes threatened by flooding is to assess more accurately those that are at high risk. To this end, it has commissioned a digital map of Britain, which is now being translated into flood-risk data. A spokeswoman says the scheme should start to be rolled out region by region from late summer, when premiums will be more scientifically assessed.

The Environment Agency's Floodline is on 0845 988 1188.