Flood and Water Management Bill – in a Public Bill Committee at on 19 January 2010.
Huw Irranca-Davies
Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Marine and Natural Environment)
Mr. Chope, it is very good to be back under your chairmanship here in the second week of the Committee’s deliberations. Welcome back, as well, to the hon. Member for Brecon and Radnorshire. It is good to see him back, although his colleague did well in his stead.
May I respond to the comments made during the Clause 17 stand part debate? Before we adjourned, the hon. Members for Cheltenham and for Vale of York asked questions about the scope of local levies and who will pay for them. Particular concern was expressed about their being used in place of funding from central Government. I will answer those questions in full, but let me first clarify the funding levels for flood and coastal erosion risk management, as hon. Members appear to be under the impression that funding has decreased.
The Government now expect to spend more than £2.15 billion on flood and coastal erosion risk management over the current three-year period. In 2007-08 total expenditure by central and local government was £580 million; in 2008-09 it was £660 million; this year spending will be £715 million. Next year, spending by central and local government is expected to be £780 million. As part of the fiscal stimulus package, £20 million was brought forward from 2010-11 budgets to 2009-10. The hon. Member for Cheltenham referred to the £660 million fund next year; that figure relates only to spending by the Environment Agency, not to the combined spending by central and local government.
I return to clause 17 and the matter of the local levy. The clause provides a route for local authorities to invest in risk management schemes that would otherwise not be taken forward. The hon. Member for Vale of York is right that the funding system changed in 2004, with most funding since then directed through a central grant to the Environment Agency. However, the local levy has continued since then and, for example, has raised £27 million for locally important projects in 2007-08. The clause extends the scope of the levy to include coastal erosion risk management projects, to provide greater flexibility to authorities, and to bring the levying arrangements into line with the scope of the new committees. To be absolutely clear, the local levy is not an alternative or a substitute for flood defence grant in aid, but an optional additional investment, voted for by local authorities to fund locally important works. We will provide funds to reform the grant to allow the levy to be increased by 10 per cent. The levy is tied to the Environment Agency’s functions, which do not extend to surface water management as that will be the responsibility of the authorities.
The hon. Lady is also right that the same people always seem to fund flood defence work in this country. However, she is mistaken in her assertion that landowners and local authorities are shouldering the costs. Landowners do not pay the RFDC levy; they pay drainage rates totalling about £15 million per year to internal drainage boards. In return, they directly benefit from the water level management services that internal drainage boards provide. About £3 million is paid by farmers to the Environment Agency, which, again, pays for additional maintenance work that benefits their land. Local authorities pay the RFDC levy as well as a special levy to internal drainage boards. To clarify, the special levy is separate from the RFDC local levy and is not affected by the Bill. Both those levies are compensated by formula grant from central Government, so, in the main, neither the local authority nor the council tax payer ultimately funds that important work.
Along with the block grant in aid paid to the Environment Agency, taxpayers across the country are funding almost all activity by the operating authorities, even though five out of six properties are not at risk of being flooded. If anything, there is a case for greater cost sharing with those that benefit from flood risk management activity, especially as overall investment needs to rise.
It is also useful to set the RFDC levy in the context of the overall funding picture for local authorities. The need for local authorities to spend more—perhaps as much as 20 per cent. more—on flood and coastal erosion risk management was foreseen at the last spending review in 2007. That led to more funding being provided within formula grant, including to pay for levies to internal drainage boards and RFDCs as well as to fund local authorities’ own work in maintaining coastal defences and managing local flood risk. Under current assumptions, and taken together with the funding we are providing for the Bill, overall local authority spending on flood and coastal erosion risk management would have to increase from £90 million to more than £160 million a year in the early years after commencement, before it is clear that such involvement is more than anticipated and provided for.
A parliamentary bill is divided into sections called clauses.
Printed in the margin next to each clause is a brief explanatory `side-note' giving details of what the effect of the clause will be.
During the committee stage of a bill, MPs examine these clauses in detail and may introduce new clauses of their own or table amendments to the existing clauses.
When a bill becomes an Act of Parliament, clauses become known as sections.
A parliamentary bill is divided into sections called clauses.
Printed in the margin next to each clause is a brief explanatory `side-note' giving details of what the effect of the clause will be.
During the committee stage of a bill, MPs examine these clauses in detail and may introduce new clauses of their own or table amendments to the existing clauses.
When a bill becomes an Act of Parliament, clauses become known as sections.
