Table 1 below shows the current position for government (including local government) funding for management of flood and coastal erosion risk in England between 2004-05 and 2010-11, split by its component parts. Table 2 shows funding between 1996-97 and 2003-04 and Table 3 shows Defra funding support for capital improvement projects only between 1990-91 and 1995-96.

This page only details public funding. Additional funding of some several million pounds annually comes from non-government sources such as payments made by farmers to internal drainage boards and the Environment Agency, contributions from beneficiaries etc. Further sums are invested by other owners of defences but the Government keeps no central record of these.

Within their overall funding allocations (their Departmental Expenditure Limits) Government departments such as Defra make provision in advance for funding needed to achieve policy objectives. The actual outturn of spend at the end of the financial year may not necessarily match provision at the start for a variety of reasons. The Government decides on its expenditure at Departmental level in regular spending reviews.

Table 1   Funding in 2004-05 to 2010-11

Funding for operating authorities              
Grant to EA (resource)1         251.0 258.0 279.0
Grant to all operating authorities (capital)2         308.0 334.5 400.0
Retained in Defra3         4.0 20.5 38.0
Grant in Aid to EA4 358.6 426.9 418.9 435.9      
Funding to EA for LAs and IDBs5     12.7 21.2      
Capital grant to LAs for coast protection6     65.7 49.0      
Capital grant and SCE(R) to LAs and IDBs6 46.9 79.5          
Defra Other Expenditure7 9.9 8.4 7.9 6.0 12NYA NYA NYA
Local authority expenditure8              
Levies to Environment Agency9 24.4 24.7 21.8 25.6 27.4 NYA NYA
Levies to internal drainage boards10 23.4 27.4 27.1 28.0 NYA NYA NYA
Own spend on flood risk management11 20.3 19.5 21.5 18.3 NYA NYA NYA
Own spend on coastal erosion risk management11 12.2 12.8 14.1 14.1 NYA NYA NYA
Total 495.7 599.2 589.7 598.1 NYA NYA NYA

1Grant to EA (resource): Defra resource grant to the Environment Agency (EA) will be spent on the Agency's own non-capital activities to manage flood risk, for example on maintenance of defences, operational costs etc. The funding is provided as Grant in Aid which means the Agency decides how to spend this money to best achieve the outcomes agreed with Defra which are set out in the allocation letter from the Secretary of State.

2Grant to all operating authorities (capital): Defra capital grant for all operating authorities will be administered by the Environment Agency to support capital improvement projects to reduce flood and coastal erosion risk undertaken by the Agency itself, local authorities (LAs) and internal drainage boards (IDBs). It will be allocated by the Agency among all the authorities in order to best achieve outcomes agreed with Defra Ministers subject to minimum levels which have to be allocated to local authorities and drainage boards as a group and which are set out in the allocation letter from the Secretary of State.

3Retained in Defra: funds retained by Defra for the time being for the introduction of measures to assist communities in adapting to future risks (£2/8/18 million) and for work which may arise from the recommendations of the review by Sir Michael Pitt (£2/12.5/20 million).

4Grant in Aid to EA: Grant in Aid is paid monthly to the Environment Agency to support its flood risk management activities from an agreed annual total. The Agency decides how to spend the money to best achieve the outcomes agreed with Defra, for example in the Agency Corporate Plan.

5Funding to EA for LAs and IDBs: from April 2006 the EA took over responsibility for the grant aiding of local authority and internal drainage board flood risk management capital improvement projects. It will assume similar responsibilities for local authority coast protection projects from April 2008.

6Capital grant and SCE(R) to LAs and IDBs: Defra funds individual capital improvement projects promoted by local authorities and internal drainage boards. Funding for local authority and internal drainage board flood risk projects is channelled through the Environment Agency; Defra will continue to fund local authority coast protection projects directly until March 2008 after which local authorities will receive this funding from the Environment Agency. Unlike Grant in Aid, this grant and SCE(R) may only be spent by the authority on the specific project for which it has been approved.
[Note on SCE(R): Up until 2005-06 local authority projects were funded through a mixture of direct capital grant and Supported Capital Expenditure (Revenue) - SCE(R). SCE(R) counted against Defra's Departmental Expenditure Limit for the year in which it was approved and supported local authority expenditure in that year. However, the funding resulting from SCE(R) was actually provided to the local authority over several years through Revenue Support Grant (RSG) from the Department for Communities and Local Government. This RSG is not shown in the table to avoid duplication. From 2006-07 onwards, this mixture of grant and SCE(R) has been replaced by direct Defra grant at 100% of eligible costs.]

7Defra Other Expenditure: spending on consultancies, research & development and Defra running costs. The figure for 2007-08 does not include £2.6m annual funding for the Storm Tide Forecasting Service transferred from Defra to the Ministry of Defence.

8Local authority expenditure: local authority expenditure is funded from a number of sources including central government grant, council tax and reserves. The primary source is Revenue Support Grant from Communities and Local Government (CLG). More information is available from the CLG website, including the page on the revenue support grant settlements. The above figures reflect local authority spend (actual or estimated). All four categories of local authority spend in Table 1 are supported by RSG.

9Levies to Environment Agency: local authority levies to the Environment Agency are set by Regional Flood Defence Committees on which local authorities have a bare majority. These levies allow local decisions to be taken to fund a flood defence service which exceeds that which would be possible through Defra grant alone. Capital improvement projects promoted with local levy do not have to meet Defra's priority score threshold but do still have to comply with fundamental economic, technical and environmental criteria.

10Levies to internal drainage boards: local authorities pay special levies to internal drainage boards which fall entirely or partly within their boundaries to take account of works the boards do in relation to flood risk management, for example in urban areas.

11Own spend: local authorities' own spend on flood and coastal erosion risk management on non-capital work (maintenance and operations).

12NYA: estimates not yet available.

Table 2   Defra and Local Authority Spending, 1996-97 to 2003-04

Financial Year Defra
Grant and
2003-04 125.1 10.4 322.0 457.5
2002-03 120.8 7.6 299.4 427.8
2001-02 79.0 5.7 281.4 366.1
2000-01 66.5 4.9 262.7 334.1
1999-00 70.4 5.1 246.6 322.1
1998-99 72.9 5.4 233.2 311.5
1997-98 81.6 5.5 223.3 310.4
1996-97 96.7 5.2 205.2 307.1

13Defra Grant and SCA/SCE(R): Supplementary Credit Approval (SCA) was replaced by Supported Capital Expenditure (Revenue) (SCE(R)) from April 2004 but in essence they are both similar forms of funding.

14Local Authority: local authority spend is much higher in 2003-04 and previous years because at this time the Environment Agency was largely funded through levies on local authorities with Defra part-funding only capital improvement projects and national initiatives such as public awareness campaigns and Catchment Flood Management Plans. Although local authorities still pay levies to the Agency, this form of funding has largely been replaced by direct funding from Defra through Grant in Aid.

Table 3   Defra Funding Outturns: 1990-91 to to 1995-96

  Financial Year Defra Grant and SCA  
  1995-96 91.3  
  1994-95 70.6  
  1993-94 62.3  
  1992-93 62.8  
  1991-92 69.6  
  1990-91 51.5  

Table 3 only gives a partial picture since it does not include a large part of Environment Agency and local authority spend or Defra "other" spend.

Page last modified: 5 March 2008
Page published: 13 July 2004

Department for Environment, Food and Rural Affairs