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Flood plans could sink economy, property industry warns

The British Property Federation has added its support to the findings of a damning report from an influential group of MPs into the state of the nation’s flood defences.

The Public Accounts Committee accused the Department for Environment, Food and Rural Affairs (DEFRA) that it “had not yet adjusted its long-term investment strategy and could not tell us what the scale of the long-term funding gap would be” in the face of budget reductions, and it “did not accept ultimate responsibility for managing the risk of floods”.

A pact between DEFRA and the insurance industry, known as the Statement of Principles, which  guarantees cover to businesses and households at risk of flooding ends in 2013. The Department wants to see more funding come from local residents and businesses - including landlords. While the BPF said it broadly supported proposals to increase the amount of investment in flood defences beyond that supplied by the state, it did not believe sums the government are seeking from private contributions are realistic.

It was sceptical that households and businesses would be able to make up the shortfall caused by government spending cuts, and warned the proposed system would not provide sufficient certainty to property investors – and insurers – that the risk of flooding was being managed.
 

Ian Fletcher, director of policy at the British Property Federation, said: “DEFRA needs to work to secure a new agreement as quickly as possible. Given the state of the economy, there is severe doubt private investment can reach the levels it is expecting.
 

“It is right that those who benefit from flood defences help to fund them, but we struggle to see how, the demands of flood protection, when added to other planning obligations, all have an impact on development viability, which government must recognise.    
 

“A lot of focus is on householders, but the impact of flooding on businesses can have significant consequences, which spread into the wider economy and cause damage beyond the immediately flooded area. The UK has a great tradition of universal insurance cover, which is predicated on sufficient investment going into flood defences. We shall rue the day if that is lost.”
 

ENDs
 

Patrick Clift, Media and Public Affairs Manager, on 07834 439 505 or at pclift@bpf.org.uk

Paul Sweeney, Media Officer, on 07841 732 194 or at psweeney@bpf.org.uk

Public Accounts Committee report: http://www.publications.parliament.uk/pa/cm201012/cmselect/cmpubacc/1659/165902.htm

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