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ARCHIVE: Investment allocation

The Government expects to invest around £2.15 billion in managing the risks of flooding and coastal erosion over the current three-year spending period (2008/09 to 2010/11 inclusive). 

Operating Authority expenditure

In the 2010/11 financial year, a total of £765m is forecast, in comparison with £590m in 2007/08, and £310m in 1997/98.  On top of the £765m due to be spent in 2010/11, £20m of capital investment has been brought forward from that year into 2009/10 budgets as part of the fiscal stimulation package announced in the 2009 Pre-Budget Report.

The following table provides a breakdown of the £2.15 billion total.

£m Environment Agency budgets  
Financial Year Local authorities’ own expenditure (from CLG formula grant) 1 Defra (Pitt and adaptation budgets) Resource budget (maintenance & operational costs) Capital programme (new & improved defences & projects) Total
2007/08 (baseline) 90.02 0 235.3 (actual) 264.5 (actual) 589.8
2008/09 90.0 4 228.5 339.9 662.4
2009/10 94.4 (estimated) 20.5 258 349.43 722.3
2010/11 100.8 (estimated) 35 2754 3545 764.8
3 year total

285.2

59.5

761.5

1,043.3

2,149.5
  1. This includes expenditure on defences against flooding, land drainage and related work, coast protection and the Environment Agency flood defence levy.
  2. This is local authorities’ net current expenditure. Total expenditure , by Local Authorities, for 2007/08 was 100.6 and for 2008/09 was 102.4. The latest local authority outturn figures are published by the Department of Communities and Local Government and a further break-down can be found at www.communities.gov.uk/publications/corporate/statistics/revenue200809finaloutturn
  3. Previously £334.5m.  £5.1m brought forward into 2008/09 budgets, £20m brought forward from 2010/11 budgets.
  4. The figure for Resource budget in 2010/11 was previously £279m, reduced by £4m as part of Defra’s contribution towards in-year savings
  5. The figure for Capital programme in 2010/11 was previously £380m, reduced by £26m as part of Defra’s contribution towards in-year savings

Historical information on funds for flood and coastal erosion risk management can be found here.

Environment agency funding

The majority of the investment will be in grants to the Environment Agency, who in turn fund new and improved risk management projects and defences delivered by them, by local authorities (LAs) and by Internal Drainage Boards (IDBs).  The Environment Agency also invests in reducing the consequences of flooding; through better risk mapping, strategic planning, flood forecasting and warnings, and development control.

Local Authority expenditure

Local authorities’ own expenditure is supported by formula grant and as such is not ring-fenced for flood and coastal risk management.  This means it is for individual authorities to decide how much to spend in this area, subject to limits on overall budgets and the need for investment on other priorities.  Local authorities spent £100.6m in 2007/08, compared with less than £86m in previous years.  The increase may be explained by the extreme flood events in Summer 2007. 

The settlement for the current spending period foresaw the need for local authorities to spend more to tackle local risks; meaning there is more money available in their overall budgets if local authorities decide that increasing investment in local flood or coastal erosion risk management is a priority for them.

Internal Drainage Boards

IDBs are able to raise funds through charges and levies on local authorities and agricultural land owners to fund their drainage and risk management activity. They can also apply for capital funding for improvement works from the Environment Agency, and receive payments from the Environment Agency in relation to water entering IDB districts from higher ground.

Additional investments by Defra

Key investments within the budget Defra holds includes:

  • Up to £34.5m will be spent by Defra over three years taking forward the recommendations made by Sir Michael Pitt in his independent review of the 2007 floods.  See Annex B (page 22) of the Government’s response to Sir Michael Pitt’s review for more details.
  • £5m will be made available to individual homeowners to help pay for the cost of installing individual property flood resilience measures in areas that are frequently flooded and do not benefit from community defences.
  • £1m is being invested in three projects to demonstrate how land management change can help protect against flooding.  The projects are in Somerset, North Yorkshire and Derbyshire.

Page last modified: 24 September 2010
Page published: 22 April 2009