Property barons issue flood funds warning

Government plans to force residents and businesses to help fund flood defences could damage the economy and halt urban regeneration schemes, property owners have warned.

In its response to a Department of Environment, Food and Rural Affairs consultation on future flood defence funding, the British Property Federation has said it broadly supports proposals to increase the proportion of flood defence investment not supplied by the state.

But it does not believe the government’s plans to match fund small flood defence schemes from private contributions are realistic.

It was sceptical that households and businesses would be able to make up the shortfall caused by government spending cuts, and warned the proposed system would not provide sufficient certainty to property investors and insurers that the risk of flooding was being managed.

BPF assistant director James Anderson said: “It is right that those who benefit from flood defences help to fund them, but we struggle to see how, particularly given the state of the economy, private investment can reach the levels government is expecting.

“Given the emphasis on private contributions it must also be made clear that development cannot deliver innumerable benefits to the local community. The demands of flood protection, when added to other planning obligations, all have an impact on development viability, which local authorities must recognise.”

The BPF also criticised government’s intention to give households greater flood protection than businesses – a move which it argued was not only impractical but could cause the damage from future floods to ripple out into the wider economy and cause damage beyond the immediately flooded area.

“Protecting households above businesses is simply illogical – householders are currently better insured against flooding and at lower cost. It also fails to take account of the wider impacts that the flooding of commercial premises cause, which spread into the wider economy and cause damage beyond the immediately flooded area.”

In last year’s comprehensive spending review, Chancellor of the Exchequer George Osborne earmarked £500m a year to spend on flood defences from 2011 to 2015 - a reduction of £216m on the sum promised by the previous Labour government.