Speeding up spending plans will help economy.
The ABI are calling on the Chancellor, Alistair Darling, to use Monday’s Pre Budget Report (PBR) to bring forward its spending plans on vital flood defences. Speeding up this spending would stimulate the economy and protect more homes.
Following the devastating floods of 2007, the Government agreed to spend £1.5bn on flood defences between 2009 and 2011. By bringing that spending forward to next year, the Government could help boost expenditure projects to the benefit of the wider economy.
Investing in flood defences is much less complicated and cumbersome than other capital expenditure projects, and it would allow the Government to quickly and efficiently inject a fiscal stimulus to the economy.
“Turning promises for tomorrow into action today on flood defences makes sense. It will enhance protection for households and businesses from the threat of flooding; is much less complex and contentious than other possible capital projects; and can be rolled out faster," said Stephen Haddrill, the ABI's director general. "Investment in flood and costal management is very cost efficient - it typically gives a benefit-cost ratio of 7:1, much higher than for other public sector capital investments.”
The ABI is also working closely with the Government to develop a long-term flood management strategy, which looks at funding needs 25–30 years ahead, and regional planning taking into account the likely impact of climate change in 50 and 100 years time. The insurance industry dealt with over 180,000 claims as a result of the flooding in 2007, with the total bill standing at around £3bn.
