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Water

Implementing the conclusions of the Flood and Coastal Defence Funding Review
Final outturn report

Background

Defra had three Flood Management Service Delivery Agreement (SDA) Targets which were agreed with HM Treasury in the 2002 Spending Review for flood and coastal erosion risk management. These were SDA targets 26, 27 and 28.

A review of flood and coastal defence funding mechanisms was announced in summer 2001 as an outcome of the Government's Spending Review 2000, from which followed SDA target 28:

Defra will implement the conclusions of the Flood and Coastal Defence Funding Review including the development of proposals for new funding streams and initiatives to reduce the percentage of overheads involved in the provision of flood defences, to an agreed Implementation Plan to be developed by March 2003.

The conclusions of the Review were announced in March 2003 and the delivery plan was produced by June 2003. It contained eight “strands” as outlined below and this document reports on the progress made against each:

Strand 1: Critical ordinary watercourses

Ministers announced that responsibility for those watercourses creating the greatest flood risk - the so-called critical ordinary watercourses (COWs) - should transfer to the Environment Agency (EA). By giving EA responsibility for COWs, it would place accountability for flood defence on all rivers creating the greatest flood risk squarely in the hands of one body.

The transfer to EA of approximately 1,800 watercourses has now been completed in three phases (1 November 2004, 1 April 2005, and 1 April 2006) along with a modest reallocation of resources from internal drainage boards (IDBs) and local authorities to the EA. EA have been encouraged to contract back day to day operational work to IDBs and local authorities who were willing and able to do so and have a good track record.

Strand 2: Improved arrangements for IDBs and review of Environment Agency supervisory duty

Ministers announced they wished to see changes in the way that IDBs are managed and operate, including through greater use of amalgamation and consortia to improve their effectiveness and also to broaden their membership. This was to be achieved through strengthened high level targets coupled with a review of the way the EA exercise their general supervisory duty.

As part of these changes, Defra brought IDBs under the jurisdiction of the Local Government Ombudsman (LGO) from 1 April 2004, and introduced a model complaints procedure for IDBs to operate. This move was aimed to help increase the accountability of the Boards to the general public who have an interest in the way that they are run and operate but who currently have no independent means of review. Defra also revised and re-issued the model statutory rules and procedures under which IDBs operate.

In order to be able to assess how boards should be managed and operated, Defra commissioned consultants to look at developing model arrangements for IDBs. The IDB Review was undertaken to assess how boards perform in terms of accountability, accessibility, representation, efficiency, value for money and contribution to wider government environmental objectives. JBA Consulting were engaged and following much consultation and analysis, a report was submitted to Defra in February 2006.

The headlines coming out of the report were that Boards generally provide an efficient and effective water level and flood risk management service that is valued particularly locally (by ratepayers and local councils), and boards should very much continue in the role they currently provide. However the report highlighted a number of areas where Boards do need to improve, particularly in order to comply with current expectations of a statutory body with need in some instances to strengthen aspects of governance, representation, internal accountability and transparency.

Defra have set up a project board consisting of officials from Defra, EA, Association of Drainage Authorities and the Local Government Association who are in the process of considering the recommendations in the report. And along with the support of wider input (including an established IDB Advisory Group consisting of English Nature, Royal Society for the Protection of Birds, and a number of individual IDBs) we are drawing up detailed views on which recommendations we think should be taken forward, how and to what timetable. Ministers will then be consulted and, depending on their views, Defra hope to produce an implementation plan by the end of 2006. This timetable will depend on the nature of the recommendations we take forward and whether further consultation is necessary.

Strand 3: Single tier flood defence committees

Ministers announced the intention to create a single, regional tier of flood defence committee (in some regions there was both a regional and local tier). The benefits of doing so were to reduce administrative costs of servicing local committees but more importantly to provide clearer accountability and strategic planning for the flood management service.

Having carefully considered proposals from the EA for creating a single tier following extensive consultation by the Agency, Ministers concluded that in abolishing all the English local flood defence committees:

  • Southern and Wessex regions should each continue to have a single regional flood defence committee, the area of which remained unchanged; and
  • the old Anglian region should be split to create three new regional committees.

After a statutory consultation period, the Secretary of State's Orders were finalised, made and laid before Parliament:

The changes took effect from 1 April 2005.

The Welsh Assembly Government has policy responsibility for flood risk management in Wales and decided to hold a separate consultation exercise on arrangements in Wales, both as regards the committee structures and funding. Following consultation, Welsh Assembly Government Ministers decided to:

  • abolish the six local flood defence committees which took effect on 1 April 2005;
  • change the boundary of the current Welsh Regional Flood Defence Committee to cover the whole of Wales; and
  • fund the EA’s work in Wales through a single stream of Welsh Assembly Government flood risk management grant in aid.

The change to the boundary required joint consultation and parliamentary process as it affected both England and Wales (ie it also affected the areas of the Severn Trent and North West regional flood defence committees). After a statutory consultation period, the Joint Order was finalised, made and laid before Parliament:

The change took effect from 1 April 2006.

Strands 4 and 5: Flood risk management Grant in Aid to Environment Agency

Ministers announced their intention to pay the EA a single stream of grant in aid to replace the old "capital" approvals on a scheme by scheme basis and the "large" EA levies on local authorities. These changes were effected from 1 April 2004. Funding of the EA is tied to targets which Defra set the Agency, including through their Corporate Plan. Defra plan to introduce a series of Outcome Measures, and a related prioritisation system, in 2008-09 which will ensure even more robust arrangements for the use of Grant in Aid. (This is being managed separately from the Funding Review Implementation Project.)

Strand 6: New funding streams

The Funding Review sought to identify new Funding Streams, including a more direct contribution from beneficiaries of the service where they can be identified. No conclusions on this were reached at the time that the Funding Review conclusions were announced and this work is being taken forward as part of the Making Space for Water programme.

Strand 7: Reduction of overheads including streamlined scheme approval procedures

This was initially confined to consultants considering streamlined scheme approval arrangements as between Defra and EA. However, much more radical change has happened as a result of changes to Defra's delivery policy and strategy. The EA now approves its own schemes up to £50 million and is taking on Defra’s approval role for projects being undertaken by local authorities and IDBs. With effect from 1 April 2006 EA took responsibility for approvals under the Land Drainage Act 1991 and will do so for approvals under the Coast Protection Act 1949 by April 2008.

Strand 8: Three year review

The Funding Review announcement said that the new arrangements would be reviewed after 3 years of operation; we expect to do this in Autumn 2008. In the meantime Defra and EA will produce parameters for judging success and failure in conjunction with views from stakeholders.

Page last modified: 22 March 2007
Page published: 29 March 2004

Department for Environment, Food and Rural Affairs