By Maximilian Clarke

The commons select Committee has published its report into flood management in the UK as one in six properties is now at risk from flood damage.

The annual cost of flooding to insurers stands at an estimated £1.1bn. But with as many as 1 in 6 houses at risk, and flood damage costing upwards of £20,000 per house, the potential costs can be colossal.

Currently the Association of British Insurers, recognising the financial risks involved in insuring at-risk properties, refuse insurance to some 200,000 properties in the UK until government enacts a better flood management strategy.

“…it is unclear where the buck stops and who is ultimately responsible for managing the risk of flooding," commented Margaret Hodge, MP. "There is also a great deal of uncertainty about whether there will be enough money to maintain and improve flood protection in the longer term, and who will pay.

“The Department tells us that it is not ultimately answerable and shares the responsibility with the Environment Agency and local bodies. But the Department has no way of knowing whether local flood management systems are adequate or when it should step in.

“It is not acceptable that local people should be left in doubt about where responsibility and accountability lie.

“There is a big mismatch between what the Agency reckons it needs to maintain current levels of flood protection and the budget being made available. The Department sees more funding coming from local sources — including businesses and local authorities. We are sceptical that this will be possible when local authorities and businesses are themselves under financial pressure.

All of this is fuelling uncertainty over the future availability and affordability of insurance cover for buildings in areas at risk of flood. The current agreement between the Government and the insurance industry runs out in 2013. A new agreement is needed urgently."

Flood protection is a national priority and features on the National Risk Register of Civil Emergencies. Recently the annual cost of flood damage has been £1.1 billion and is set to rise, and 5.2 million homes are at risk of flooding. In 2010-11 the Department for Environment, Food and Rural Affairs (the Department) spent £664 million on flood and coastal risk management, 95% of which went to the Environment Agency (the Agency).

There have been significant changes in the funding arrangements. In 2009 the Agency projected that its flood risk management budget needed to rise by 9% during the spending review period (2011-12 to 2014-15) to sustain current levels of protection, particularly because risks are growing due to climate change. However during the same period the Agency’s flood risk management budget has been reduced by over 10%.

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