UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 970-ii

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Environment, Food and Rural Affairs Committee

Flood funding

Wednesday 13 February 2013

Rt Hon Lord Smith of Finsbury and David Rooke

Evidence heard in Public Questions 89-166

USE OF THE TRANSCRIPT

1.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2.

Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

3.

Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.

4.

Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.

Oral Evidence

Taken before the Environment, Food and Rural Affairs Committee

on Wednesday 13 February 2013

Members present:

Miss Anne McIntosh (Chair)

George Eustice

Barry Gardiner

Mrs Mary Glindon

Sheryll Murray

Neil Parish

Ms Margaret Ritchie

________________

Examination of Witnesses

Witnesses: Rt Hon Lord Smith of Finsbury, Chairman, and David Rooke, Head of FCERM, Environment Agency gave evidence.

Q89 Chair: Good afternoon and welcome, Lord Smith and Mr Rooke. For the record, could you simply give your names and titles, if you would?

Lord Smith: Thank you very much, Chairman. I am Chris Smith, Lord Smith, Chairman of the Environment Agency, and David Rooke, who is with me, is Director of Flood and Coastal Risk Management.

Q90 Chair: You are both very welcome, and we thank you for participating in our inquiry into flooding. On behalf of the Committee, can I congratulate you, Lord Smith, on your reappointment to this position?

I should just declare my interest: as you probably know, I am a Vice President of the Association of Drainage Authorities, of which I am immensely proud, and on which we will be questioning you. As regards flood funding, to begin with, there seems to be a discrepancy in the number of households that are at risk of flooding. Am I right in thinking that the Environment Agency give one figure, and the insurance industry give another figure, as to those properties that are most at risk of flooding, and those that are at risk of various types of flooding, including the new surface water flooding that we are seeing increasingly?

Lord Smith: On the whole, the insurance industry tends to take its information almost entirely from the facts, figures and maps that we publish. Our figures are, and have consistently been, that overall there are 5.5 million properties in England and Wales at risk of flooding from rivers, sea, and surface water, so that is the total figure. Of those, 3.8 million are at risk of flooding from surface water. There are of course some properties that are at risk of both flooding from surface water and from rivers or the sea.

Q91 Chair: The Flood and Water Management Act 2010 gives the Environment Agency overall responsibility for flood management. What advice have you given Ministers as to the adequacy of the Government’s flood defence funding plans?

Lord Smith: I preface my answer by saying there is always more to do, and there always, I suspect, will be more to do. Under the provisions made for us in the spending review, we have £2.1 billion over the fouryear period. Our estimate is that that will enable us at least to improve protection for 145,000 properties. We have recently, of course, in the Autumn Statement had an increase of £120 million over the next two years: £60 million for schemes to enable and facilitate economic growth, and £60 million for advancing and enhancing the existing programme. With that additional funding, our estimate now is that at least 165,000 properties will be able to secure better protection over the course of the spending review period.

David Rooke: To add to what Lord Smith said, in 2009 we published a longterm investment strategy, which set out options for the Government in terms of the costs and benefits of different scenarios of funding, and we are updating that work. We will be presenting that work to the Government later this year or early next year, in preparation for the next spending review.

Q92 Chair: Could you give an indication of what the balance of spending is between capital expenditure on capital projects and maintenance, in any given year?

Lord Smith: I am rapidly looking through for the figures. The total amount in the current financial year on capital is £260 million, and on revenue is £265.1 million. The revenue figure, of course, includes not just maintenance work but also all the flood warning systems, emergency response and so forth.

Q93 Chair: In terms of a balance between what I would call soft flood defences, like the Pickering Slowing the Flow project, and hard physical defences, would you accept that the money goes further if it is allocated to soft flood defences, and may bring more benefit to certain communities?

Lord Smith: Frequently that will be the case, but the response has to be what is best in any individual catchment, or any individual flooding issue. There will be some places where soft defences absolutely are the best possible answer. There will be other places where hard defences have to be included, because that is the best way of responding to flood risk in that particular situation.

I should also probably have given you the figures for the forthcoming financial year, 2013-14. The balance shifts between capital and revenue: capital is £293.8 million next year, and revenue is £242.9 million. The shift is because of the new capital money that was announced in the Autumn Statement, and a continuing pressure, because of the spending review, on the amount that we have available for maintenance.

Q94 Chair: We are coming on to discuss maintenance, but can you assure the Committee today that there is no threat of less maintenance being performed, such as regular dredging?

Lord Smith: We will have progressively less money available for maintenance work, as a result of the spending review settlement, over the each of the next two years. Maintenance, of course, includes a variety of different things; it includes keeping all our assets in good, tip-top condition, it includes pumping and drainage where it is needed in response to particular flooding, and it includes dredging and channel maintenance, clearing of watercourses and so on. All of that comes under the heading of maintenance. The amount we have for maintenance this year is £265 million, and next year it is £242.9 million.

David Rooke: That is the total revenue, Chairman.

Lord Smith: Yes, sorry. Asset management, within those figures, is £169 million this year, £146 million next year and £136 million the year after, so it is a slightly reducing line.

Q95 Chair: I would like to ask you a question I have asked before, and you have always been quite positive about this. In my area we have drainage boards, and they pay, say, £60,000 a year to the Environment Agency for dredging and channel maintenance. Do you envisage a situation where they would agree a programme with you, but be allowed to retain that money to use their own engineers to conduct their own maintenance programme? Is that something that you would look on positively? I think Mr Rooke would like to say a word.

David Rooke: Yes, thank you.

Chair: I think you know the area rather well.

David Rooke: I do. There is provision; in fact, there is a duty on our committees-and I do stress it is our regional flood and coastal committees-to levy a precept on internal drainage boards to contribute towards the costs of maintaining the main river, and the benefit that that then accrues to the drainage boards. So it is a matter for our committees, but clearly if internal drainage boards are willing to do the work that they believe is necessary as a local priority, and there is agreement from our committees, I am sure that our committees would be willing to consider that.

Q96 Neil Parish: Lord Smith, you said that you need to keep those rivers and tributaries in good condition. What sort of condition would you consider them to be in at the moment?

Lord Smith: I was referring there to our flood defence assets. That is everything from walls, weirs, soft defences and so forth. At the moment, the quantity or the proportion of those that are in good condition is 98.1%.

Q97 Neil Parish: Can I just interrupt? The Parrett and the Tone at Burrowbridge are probably a third of the size they should be. They will eventually flood Taunton and Bridgwater irrespective of what they do to the farmland in the meantime, so I cannot accept for one moment that those rivers are anywhere near 98%. I would suggest to you they are about 33%, and this is what we need to tackle.

Lord Smith: What I was referring to was the flood defence assets, not the condition of the rivers. The Parrett and the Tone, especially in the Somerset Levels, are matters of very great concern to me. As you probably know, I went down to have a look for myself just before Christmas.

There is a very active discussion under way between us and the local community about what the best response to the flood risk in the Somerset Levels is, especially in relation to the Parrett and the Tone. My own view is that there is, I believe, scope for improving the flow of water at particular pinch points on the Parrett and the Tone. It is potentially expensive work. We need to be sure that it is going to provide real benefit, and it is not work that is going to be simply done away with by silt coming back within a month or two of it having been removed. However, I do think there are some pinch points there that are aggravating some of the flooding problems, and that need to be addressed. I very much hope that we will be able to have a plan in place to do that within a very short period of time.

Q98 Mrs Glindon: Given their expected economic benefits, why were projects such as those in Leeds, Sheffield, Exeter, Ipswich and Derby, which are to be funded by the additional £120 million announced in the Autumn Statement, not already priority projects for receiving central Government funding?

Lord Smith: The first part of the answer is that the projects such as Leeds, Exeter and Ipswich, which are labelled as projects to facilitate growth, represent £60 million of the extra £120 million that was made available in the Autumn Statement. The other £60 million is for accelerating the normal programme, which was already in place.

The schemes where a particular provision is being made to facilitate growth represent something of a new concept, and it is very much something that the Secretary of State was keen to put in place. The programme up to now has entirely been focused on protecting property and lives. That has been the thrust of where the programme has been, and it is the basis on which most of the cost-benefit analysis is done. What it has taken account of up to now is the potential for economic growth and wealth creation that could be freed up by flood defence work that is undertaken.

This new factor coming into play has enabled schemes that we would dearly have liked to have been able to do in the past, like the protection for the centre of Leeds, for example. Under the old system they did not come right up at the front of the queue, and so we were not able to put them into the mix. However, now with the new funding that has become available from Government, they can.

Q99 Sheryll Murray: On this point, regarding new schemes that you are going to introduce, I believe I am right in saying that you actually design schemes at the moment to deal with a onein100years incident occurrence. Will you be looking at increasing that to perhaps a onein300years occurrence for any new future schemes, to deal with the unexpected weather that we have been having?

Lord Smith: Just before I ask David to give you the facts and figures on that, one of the important factors in all of this is that we are always very anxious to make sure that we are working with the local community in the design of schemes that we are putting together. When we are designing flood defence schemes, we do try now to factor in the likely impacts of climate change, such as increased erratic weather patterns, increased sea level rise, and so forth. We try to build those calculations into the design of the schemes that we are doing.

David Rooke: A more technical response: in relation to the design standard, we look at how we could maximise the benefits and costs. However, under the Government’s policy in relation to partnership funding, there is a lot of community engagement, and we take into account the wishes of those who are contributing towards the scheme. So if people are making contributions-particularly local authorities, communities or private businesses-then we take that into account.

Under partnership funding, the Government’s contribution towards schemes is fixed, and so communities may want a lower standard but then accept the risks that go with that, or they may want a higher standard and be willing to pay for that. One of the advantages of partnership funding is that it enables that local choice, with the money, to be brought into discussions. So whilst in the past we have had a sort of indicative standard-as you have mentioned, about one in 100-it has never been the standard. We have always looked at options, to see which would generate the best return on the investment for the taxpayer. We have now got the added dimension of local choice.

Q100 Mrs Glindon: Following on from your answer to my previous question, Lord Smith, do you agree that the Treasury’s recognition of the contribution that flood defence schemes can make to economic growth, actually marks a fundamental shift in the Government’s approach to the value of these projects?

Lord Smith: It is a very welcome recognition of the impact that flood protection can provide. In virtually all the schemes that we do at the moment, the benefit to cost ratio is 8:1, in terms of the value of property protected in the event of a flood happening. That is extremely good value, and compares very robustly with virtually any other bit of infrastructure development that the Government seeks to undertake.

I think what they are now also realising is not just the benefit-cost ratio and the very healthy figures that that produces, but also the fact that enhanced benefit can come from development that can take place securely behind flood defences, which would not otherwise have been possible.

Q101 Mrs Glindon: Do you think that as a result of this enlightenment that the Government has had, we will see further increases in flood defence funding in the next spending review?

Lord Smith: I remain ever hopeful.

Q102 Ms Ritchie: Lord Smith, does the Government’s forecast that it will better protect only around 145,000 households in the current spending period indicate a lack of ambition to tackle the problem on a meaningful scale, given that some 5 million properties are at flood risk?

Lord Smith: As I said at the outset, there is always more to be done. The 145,000 target, over a fouryear period, is now 165,000 as a result of the extra funding that has now become available in the Autumn Statement. We will aim to do better than that; we did last time round. In the last spending review period the target was 145,000, and I think we achieved 184,000. So we will always strive to stretch ourselves in doing better than the targets that we have committed ourselves to with Government.

Q103 Ms Ritchie: Do you think, in light of that, there is a better way than simply citing the number of households better protected, to demonstrate the impacts of expenditure?

Lord Smith: Yes, although the number of houses protected is always a handy figure for relatively easy computation. We have four primary measures that we use for our overall revenue expenditure in the flood risk area: the number of houses better protected; the number of people signed up to our flood warning services; the quantity of our flood defence assets that are in good condition; and the amount of habitat that is created by the various measures we undertake. So it is not just that we focus on the number of houses better protected; there are other ambitions we have alongside that. However, that is the handy one that gets used most often in public.

Q104 Chair: Just under that last one about the amount of habitat protected, is that where the biodiversity comes in?

Lord Smith: That is in order to ensure that we are meeting the requirements of the habitats directive, and also, of course, taking account of the Government’s ambitions on natural capital enhancement and meeting our biodiversity objectives, which were rather well set out by the Government in the biodiversity White Paper.

Q105 Chair: But you can give the Committee an assurance that you wouldn’t not maintain for the purposes of biodiversity? You might maintain at certain times of year, but you would continue to maintain.

Lord Smith: We would always want to continue to maintain so that life and property are protected. There will be times when we need to be careful about how and exactly when we carry out that work, in order to make sure we are not damaging biodiversity, but we would not ignore the weather.

Q106 Neil Parish: As long as you are not actually putting people at a greater risk of flood if you do not actually do that work. I think there has got to be a balance, but that is not actually my question.

In December 2012, the Secretary of State launched a review of the Environment Agency and Natural England as a part of a rolling programme on non-departmental bodies. So my question is: how would radical reform of your organisation-for example, merging with Natural England-impact on your flood management work? That is to Lord Smith.

Lord Smith: We have already been undergoing pretty radical reform over the course of the last two and a half years. There has been a complete restructuring of the agency, we have slimmed down the number of staff by some 2,000, and we have taken something like 33% of cost out of all our back office and central functions. The flood risk management directorate itself is currently coming towards the end of a pretty radical restructuring exercise, so there has been a lot of turmoil and work going on, and we are a leaner and-I like to think-more efficient organisation as a result of that.

Chair: "Turmoil" is rather a strong word.

Lord Smith: Turmoil for the staff involved, yes, because there is uncertainty, and they have to reapply for jobs. Any restructuring of an organisation of our scale is bound to involve considerable upheaval for the staff involved. They have, I have to say, come through it with flying colours, and in their response to the series of flooding events that we have had to cope with over the course of the last eight to nine months they have really risen to the task very professionally. I am very proud of them for doing that.

Q107 Neil Parish: Talking of a leaner, meaner organisation-

Lord Smith: Leaner and more efficient.

Neil Parish: Thank you very much for that clarification. On the matter of the Association of Drainage Authorities, they have suggested that the Environment Agency’s non-flood defence functions could be carried out by other bodies. Is there a good argument, which I believe there is, that drainage boards and local contractors-certainly on some of the maintenance projects of our rivers and tributaries-could be better carried out, and have a more cost-effective rate, by those authorities that are much more closely linked to both farming and the local population? What is your view about the Environment Agency delegating some of that work?

Lord Smith: I am very much up for it. We are already in discussion with individual IDBs and with some local authorities on how we can streamline what we do and what they do, and get a synergy out of doing things together or in combined form, rather than doing it separately. There will be places where IDBs are better placed to carry out work than ourselves, and vice versa.

David Rooke: A really good example would be in Lincolnshire, where we have got a really good working relationship with the county council, the district councils, and the internal drainage boards. We are pooling resources, agreeing priorities locally, and providing much more efficient service as a consequence.

Q108 Neil Parish: So if a drainage board could come up with a scheme that you have costed as Environment Agency at X, and a drainage board could come up with a scheme at substantially less, are you going to agree to allow the drainage board to do it?

David Rooke: In terms of a capital scheme, we treat internal drainage boards in exactly the same way as local authorities and indeed our own schemes, so there is no differentiation in terms of the way we allocate funds to those projects.

Q109 Neil Parish: I am talking more about maintenance, really.

David Rooke: On maintenance, I am sure that we could learn from IDBs, and I am sure some IDBs can learn from what we do. Again, by working together like we are Lincolnshire, if we have a machine that is working on our main rivers next to an IDB watercourse that needs some maintenance, we can use the same machine, and vice versa.

Q110 Barry Gardiner: Can I just take up what you said about working with others to improve your efficiency? I think you said that you expected a 15% efficiency saving on capital investment in the spending review period. Are you on track to achieve that?

Lord Smith: Yes, we are. In fact, I think we have already achieved our target for this current year within that 15% envelope.

David Rooke: By quarter three.

Lord Smith: The end of quarter three. David, give the facts and figures.

David Rooke: We report to the Cabinet Office in terms of our progress on efficiency on a quarterly basis. It is a cumulative target that we have been set over the spending review period; it does equate to 15% of our capital programme, and as of quarter three of this year we are ahead. In fact, we have already met our target for this year, and we are confident that we will be able to sustain that through the next two years, to meet the overall target that was set by Government.

Q111 Barry Gardiner: Right. So that is quite a significant advance on your second quarter, is it not? In the second quarter your savings were £8.4 million against a target for the year of £13.4 million. So you have now achieved that.

David Rooke: We have now achieved the £13.4 million.

Q112 Barry Gardiner: Looking forward to the next spending review period, do you have any expectation that you could see protection for the flood defence budget? Will it be given similar protection in the future?

Lord Smith: This will, of course, be very much a matter for Ministers and their discussions with the Treasury.

Q113 Barry Gardiner: Let me ask it another way, then. What advice are you giving to Defra Ministers that might impress upon them the need to impress upon Her Majesty’s Treasury that you should be an area that is ringfenced?

Lord Smith: Nicely put. We are pointing out the efficiency with which we are currently able to run the programme. We are pointing out the 200,000 properties that have been protected from flooding over the course of the last nine months during a series of flooding events. There were, sadly, about 8,000 properties that were flooded over the course of that ninemonth period, but 200,000 properties were protected from flooding by that. We are pointing out the 8:1 benefitcost ratio, which is achieved by flood defence schemes. We are pointing out the increasing threat of erratic weather patterns and flooding being, according to the Committee on Climate Change Adaptation Sub-Committee, the biggest adaptation risk and task that the country faces. So there are a lot of arguments to be deployed. I have every confidence that the Secretary of State is indeed deploying them.

Q114 Barry Gardiner: I am very glad that you have got them off your chest and on to the record. We can perhaps make sure we put them in our report. Given your desire to expand your work with local authorities, is that consistent with the efficiency savings that you are going to have to make?

Lord Smith: Yes, although it does make the task more challenging. If you have a simply organised and administered national programme in which you are in sole charge, it is much easier to secure efficiency targets, because you do all the negotiations with the contractors, and secure the efficiencies through having control of the programme. It is much easier to do than when you have partnership funding and local authorities in the picture, and so on.

However, because we are working very closely with local authorities, and with the various other parties that are coming to the table through partnership funding, we have nonetheless been able to secure the efficiency savings that we have been seeking. David, you have been closer to this than I have.

David Rooke: I think one really good example is that we are in the process of letting new framework contracts for engineering advice and engineering contractors, who basically deliver our capital programmes. As a result of the Flood and Water Management Act we are able to make those frameworks available to local authorities and to internal drainage boards. We are already getting indications from local authorities that when they are in place, which they will be later this year, they will want to use them. At the moment it is a very competitive marketplace, and so we are hoping that that will generate more efficiency. That will be available to local authorities and internal drainage boards as well as our own schemes.

Q115 George Eustice: My question follows neatly from that. After the Flood and Water Management Act, as you say, there is now a much larger role for local authorities, particularly on surface water. A number of them have raised with us the fact that, as they put it, they are now responsible for around 46% of flood risk responsibility, but get just 6% of the budget allocated for floods. So do you think it is time, in the light of the new responsibilities they have got, to revisit how funding is allocated? In short, I think they would like a slice of your budget to do some of their responsibilities.

David Rooke: On the capital programme, as I said earlier, we treat local authorities in exactly the same way as our own schemes, and in exactly the same as internal drainage board schemes. What we are seeing is that, particularly for capital schemes to reduce the risk of flooding from surface water, there is a significant step increase in funding from previous historic levels, which have been quite low, over the next two years, so there is a marked increase in funding.

Local authorities also fund our committees through local levies, and across England that is about £30 million a year. That money is used to support local priorities, meet local needs as determined by our committees, and of course they can also use that money now to top up partnership funding schemes, which will lever in additional capital grant. On the revenue side, the Department has funded local authorities for the implementation of new responsibilities under the Flood and Water Management Act, and set that out in its spending review. Of course overall, government finances are a matter for the Department for Communities and Local Government, for local authorities.

Lord Smith: I have just been checking on the figures. In the coming year, 2013-14, within the programme there are 273 local authority schemes with £61.8 million of grant-in-aid allocated to those schemes.

David Rooke: Yes, and that compares with £24 million this year, and in 2014-15 we expect £104 million to be allocated to local authorities and internal drainage boards for their schemes.

Q116 George Eustice: You mentioned partnership funding. Something else that has been raised as a concern is that the money might actually follow projects where there is match funding perhaps locally, rather than be allocated purely on a priority need, in terms of the schemes that have the best benefit-cost ratio. Is that something you think is a problem? Is there a case for a single pot of money that perhaps people compete for based on the benefit-cost ratio of their scheme?

Lord Smith: I have two things to say to that. Firstly, every single project that reaches 100% within the cost-benefit analysis that we are required by Treasury to do is in the programme. In addition to that, there are projects where partnership funding has come into the picture in order to enable projects to go ahead. However, they have not removed other projects from the list; so they have not leapfrogged, and they have not nudged other worthwhile projects out of the way. It has been a genuine addition to the amount of work we are able to do.

David Rooke: Prior to the introduction of partnership funding, there was this national approach. Schemes were ranked according to the benefit-cost ratios basically, and therefore the public investment generally went to the greatest need. However, it also depended on lots of other factors in relation to how schemes were ready to develop in any one year, because funding is allocated on an annual basis.

What the benefit of partnership funding, of course, allows for is that the most beneficial schemes get central Government grant for all of their expenditure, so they are fully funded. We will always seek contributions because the more contributions we get in, the more the money there is for other projects, and so they are given priority within the programme, because they can go ahead without partnership funding.

Where partnership funding comes in, and is necessary to get scores up to 100%, as the Chairman has just said, that then levers in additional money from central Government. So you get this combination of central Government grant going much further, and more schemes being able to be started, because of the additional money that is coming in.

Q117 George Eustice: The projects that you fund totally are a priority, and there are ones where it is dependent largely on getting some funding from elsewhere. On the border of those two categories, there must be some projects that do not go ahead that might have done otherwise under the old system.

David Rooke: Yes, and equally there will be many projects going ahead that would not have gone ahead under the old system as well.

Q118 George Eustice: That is not something that worries you, then-that there are projects not going ahead that might have done under the old system. I know there are more projects overall.

David Rooke: There are always going to be.

Q119 Sheryll Murray: I would like to turn to the surface water flood risk, with a constituency that suffered quite considerably just before Christmas, and where most of the floods were from surface water. Do local authorities tell you that they are receiving adequate support from the Environment Agency to carry out their duties in managing local flood risk, including the access to sufficient information on the mapping of the surface water flood risk?

Lord Smith: The work on mapping surface water flood risk is well under way. We are working very closely with local authorities on that work. The two things we can most usefully provide to local authorities are, firstly, information, and, secondly, guidance, and both of those things are very much under way. We are working very closely with local authorities. The first round of draft maps, which we put together, were completed a year or so ago. That has now gone through an iterative process to make sure that the information is accurate and that it is based on the actual experience on the ground that local authorities have, and we are anticipating supplying local authorities with the second round of maps in the course of the next few months, I think.

David Rooke: We provided some initial maps as a result of the Pitt report recommendations. We then updated maps, and again, provided an updated version to local authorities. As the Chairman has just said, we are developing, with feedback from local authorities, a new surface water flood map, which we hope to publish later this year. It will enable local authorities to comply with the requirements of the floods directive, which is now embedded in flood risk regulations for England and Wales.

Lord Smith: Of course it is rather important that we make sure that the maps are as accurate as possible, because, potentially, they have a very significant impact on individuals and their homes.

Q120 Chair: Pitt did also suggest that your maps perhaps could be shared more widely. I think it is very welcome that they are being shared with local authorities, but is it not the case that others are also doing the mapping-for instance, water companies will now be doing mapping of surface water flooding, to make sure it does not go into their drains and sewers? Also, the insurance companies will be doing mapping. I thought Pitt was quite clear that the maps should be shared more widely. Are we in a position to see that happen?

Lord Smith: The intention, when the mapping exercise has been fully completed, is to share them very widely to the general public, as well as to water companies, and to insurance companies and local authorities. As I said a moment or two ago, we are very keen to make sure that the maps are as accurate as they possibly can be, and based on local knowledge as well as all the other data that they are drawn up from, in order to avoid making very costly mistakes for people who might be affected.

Q121 Chair: When you provide the maps to the local authorities, are they provided free of charge?

Lord Smith: Yes.

David Rooke: Yes.

Q122 Barry Gardiner: We talked about feedback from local authorities. Some of the local authorities are not exactly too happy with partnership working, precisely because they do feel that projects with less merit but more money get prioritised. While I appreciate the point that Mr Rooke made about money going further, it may go further but less fairly. A local authority such as my own, facing £104 million of cuts in this spending period, but nonetheless with a significant urban drainage problem and a very highly deprived population, finds it much more difficult to put the partnership funding in than a leafier constituency, whose problem may not leave them 3 feet deep in sewage in their front porch. How do you justify that?

Lord Smith: Indices of deprivation are, of course, taken into account in the calculation of cost-benefit for fully funded schemes. So within the schemes that are in the programme, there is a natural bias towards areas that have significant social and income deprivation.

Q123 Barry Gardiner: In that case, how on earth was it that in Mr Rifkind’s constituency in Kensington, all those people managed to get their basements that they converted into kitchens protected under a flood relief scheme, at a cost of millions of pounds? They must be about the richest constituency in the country.

Lord Smith: I have to confess I am not aware of the particular project.

Barry Gardiner: It is a humdinger; they were told not to build their bedrooms and kitchens in what used to be the coal sheds and basements, because it was known to be a flood risk. However, of course they wanted to increase the value of the property, so they did just that, and then Thames Water and you guys came in and bailed them all out.

Lord Smith: I am not aware of such a scheme. I will investigate that.

Q124 Barry Gardiner: Perhaps you could drop us a note on that one then-only in the context of the wider question that we were exploring. I think my point back to you here is that one of the other elements that has to be considered is the economic damage. Where you take a constituency like Mr Rifkind’s and you compare it with mine, the economic damage to highvalue properties in the centre of London is always going to rank rather high on the scale compared with my council houses in Belvedere Way.

Lord Smith: That would not necessarily be the case under the costbenefit rules. Your question started out as a question about partnership funding.

Barry Gardiner: Pull me back then.

Lord Smith: If you look across the country at where partnership funding has come in to enable a project to go ahead, that is not Kensington and Chelsea; it is places like Morpeth, Cockermouth, York and Sandwich, where there is an undoubted need to undertake flood defence schemes, but they did not come up to the requisite cost benefit figure, to enable them to be fully funded out of grant-in-aid. What has now happened is that because of partnership funding, they are able to go ahead not to remove other schemes from the programme, but to come in in addition to those schemes that do come up to the full costbenefit figure.

Q125 Barry Gardiner: That is an interesting one. How does that work? Presumably you are very efficient with your money, and you want to spend in full on the programmes that are going to have the maximum benefit, and you have a work programme prioritised to that extent.

You would not simply be leaving large chunks of money unallocated on that prioritised work programme, and so when a council comes up to you on partnership working and says, ‘You know what? We didn’t quite make your allocated work programme, but we could bung in a million or so quid’, and you say, ‘Okay, fine, let’s go for it under this new partnership deal’, that surely has to mean that money is being taken away from schemes that otherwise would have hit the priority threshold, or been above the priority threshold. I understand that a million or two million quid is being released elsewhere, but presumably you are putting in a larger chunk than they are, and so the amount that you release is not as large as the amount put in.

Lord Smith: Not necessarily.

David Rooke: The way that the funding works is that we have got to have a programme that is fully funded, but on a year-by-year basis, because of the money that is allocated on an annual basis to us over the spending review period. How the partnership funding scheme works is that there is partnership funding score, and it depends on how many schemes are available, and what they are going to cost, compared to the amount of money that is available each year.

For the coming year, there a partnership funding score of 100%, which means that every scheme that has come forward with money, that gets into the 100% score, is able to start or proceed this coming year. For the current year, the partnership funding score was 120%, and for this year we did have to say that you had to find extra money to enable your scheme to start in the programme this year, and for those communities, local authorities, the private sector, and our committees that came up with the money that enabled that to happen. Some did not start as a consequence of that. However, for the coming year, and indeed we think for the following year, all those that are eligible will be able to start.

Q126 Barry Gardiner: Mr Rooke, forgive me; I may just not understand this perfectly well, but are you saying that within the partnership funding that is the case, or are you saying that within the totality of funding that is the case?

David Rooke: In both. So to get a scheme to go ahead under partnership funding, under the Government’s policy you need to score 100%. To get the percentage, we look at the household benefits. This partly addresses the point you have just made.

The Government assumed that the average damage to a property is £30,000, which was based upon insurance figures from the 2007 floods. So it does not matter whether you have a small house in a deprived area or you have a mansion. The scheme works on the basis that there is an assumption that the damage to both those properties is the same, and it is £30,000. If you are in a deprived area, the Government enhances that amount, so actually you get more Government grant for that particular property. You also get an adjustment on the frequency of the flooding, so if it floods on a very frequent basis then again, you get more money from us towards your scheme. So that is the household benefits.

We then add the other benefits. So this is where damage to industry comes in, to infrastructure, agricultural land, transport costs-all those other costs are taken into account in terms of benefit. Again, the Government applies a factor to that, in terms of how much is national benefit, and to how much is considered as local benefit. For those other benefits, everyone is treated the same, so agriculture is treated exactly the same as industry, as infrastructure, and the Government assess that the national benefit is about 5.5/5.6 pence in the pound, whereas for a household it is 20 pence in the pound.

If you live in deprived area, the most deprived areas, the Government grant you get is 45 pence in the pound. We also add on environmental outcomes, and again there are tariffs, or rates that the Government applies for environmental benefits. You add all that up, and then you divide it by the cost of the project, and then you deduct from the cost of the project any contributions that you are getting, and you come up with a score; that is where the partnership funding score comes up from. Anything below 100%, in terms of Government grant that we give, has to be topped up with either contributions or reduction in cost, and that is back to the point in terms of what standard are you going to work to.

Chair: I think rather than getting too bogged down, could we have a note? Could I just ask about the private sector funding? I think we do need to move on.

Q127 Barry Gardiner: No, indeed, but I thought it was just useful to get that. It might have been helpful to have had a note. I just wanted to ask you, therefore, does that mean that from what the Government is saying, the schemes that are tariffed and worked out in that way provide the best value for public money? I mean Government money, rather than public, because obviously local authority is different. However, that is a different thing, is it not, from saying that we do the scheme as if it were only Government money going into it? There would be a different rating and different ordering were that to be the case.

Lord Smith: It would be the same calculation. At the moment, anything that gets to 100% under that calculation can be fully funded by grant-in-aid. Anything that comes below 100% has to be topped up by partnership funding in order to get into the picture. It is probably true to say that there will be some things that are topped up under the partnership funding that get into the programme, and there are others that do not reach the 100% figure, and that do not have the partnership funding available, that will have to wait. Everything over 100% gets into the programme.

Q128 Chair: Could you just say a word about private sector investment? There was an understanding that it would be up to 10%, and we are struggling to find examples of a project that has attracted private sector investment; perhaps you could give us some examples.

Lord Smith: Sandwich is the most obvious example, where it is money from Pfizer that has enabled it to go ahead.

Q129 Chair: I think that is the only one, though, is it not?

Lord Smith: There are a handful of others.

David Rooke: We are looking for private sector contributions towards the work we are doing in Grimsby.

Q130 Chair: "Looking for"-have you got it?

David Rooke: We have secured those. There is always an issue until we have actually signed contracts, but there is a clear commitment in terms of private sector funding for the schemes in Grimsby and Sandwich.

Q131 Chair: Have you got any water companies stepping up to the plate in terms of natural capital and working towards flood defences?

David Rooke: There is a good example again in Louth, in Lincolnshire, where the Lincolnshire County Council, the district council, the town council, and Anglian Water are all contributing.

Q132 Mrs Glindon: What is your response to the criticisms of many, including the Local Government Association and the National Farmers Union, that sufficient weight is not accorded to the economic impact of floods and flood alleviation works on agricultural land?

Lord Smith: The values attributed to different types of property-the 5p figure that David was mentioning for other things, as opposed to the 20p on property-are set down by the Government and by the Treasury, and it would be a matter for Ministers to make decisions about whether to change those balances. We do undertake some flood defence work where the benefit is, in substantial measure, agricultural rather than property. I do not know if you have got one or two handy examples, David.

David Rooke: Recent schemes that we have completed have protected 74,000 hectares of agricultural land. We follow Government guidance that was updated in 2008-09, in terms of how we make those valuations.

Q133 Mrs Glindon: Do you think that it should be updated further?

David Rooke: That is up to the Government.

Lord Smith: That would be in the hands of Ministers, to make that decision.

Q134 Chair: I think it was you, Lord Smith, who said earlier that the biggest challenge that we face is climate change. However, those of us representing foodproducing areas would say that the biggest challenge we face is probably food security together with climate change.

Lord Smith: The two are undoubtedly interlinked, and food security is going to be of increasing importance for us as a country.

Q135 Chair: So would you like to reconsider how you might respond to Mrs Glindon’s question?

Lord Smith: I have to say the rules we follow are rules established by Government. It is worth saying that it is, I think, 1.5 million hectares of agricultural land in England and Wales that is at risk of flooding from rivers or from the sea. That is something like 12%.

David Rooke: It is 14%.

Lord Smith: It is 14% of agricultural land, so it is a significant issue for agriculture.

Q136 Chair: But are you aware of what is happening, particularly in parts of northern England where we have had persistent rain? The ground is saturated so the sheep cannot be fed by pasture, and the farmers really are using up every little bit of their feedstuff, so we are coming to a crisis point, given the fact it is a very hard winter as well.

So the economic impact of floods-Mr Gardiner is going to pick this up in a just a moment-is really, in a way, impacting almost more on rural areas than urban areas, and yet I understand we would have to amend the outcomes, and that would have to be a political decision. So you are probably advising us to take that up with the Minister.

Lord Smith: It would have to be a political decision to amend the balance of value attributed to agricultural land, but I am very conscious of the fact that there are considerable places, not least the Somerset Levels, where the impact of flooding, over a sustained period of time, has diminished the economic prospects of the farming community very substantially.

Chair: I am afraid my area is in a very poor way.

Q137 Barry Gardiner: Not that I represent a large rural community, but can I just point out that the LGA does consider that the model is biased against large rural communities, and I think they would like to see how the partnership model could better factor in the benefits to be gained over a dispersed geographical area? Are you saying that that is not in your gift-the fine-tuning of the model?

Lord Smith: Fine-tuning of the model is not, I fear, in our gift. It is in the Minister’s gift.

Q138 Neil Parish: Lord Smith, you said that there is only 12% of land that is at risk. One of the things I would say to you is that because it is alluvial land, a lot of that is some of the most fertile land that we have in the country, so I suspect it may only be 12% of land, but it could be something like 25% of production. I have not got the figures, but I imagine it is around that, so you do take that seriously, do you?

Lord Smith: I take that very seriously, and you are right; for example, in East Anglia, where there is a considerable amount of land that is at risk of flooding from the sea, the land is the richest, most fertile land that we have.

Neil Parish: We get a lot of our vegetables from there, yes.

Q139 Ms Ritchie: Lord Smith, some witnesses’ evidence has expressed concern about the Environment Agency’s withdrawal from uneconomic maintenance activities. What assessment has the Environment Agency made about the impact this has had or will have on local communities?

Lord Smith: Just to put this in context, if I may, our maintenance work includes a range of activities. It includes the inspection and repair of flood defence structures, maintaining flood barriers and pumping stations, clearing grills, removing obstructions from rivers, and controlling weeds that grows within rivers and builds up flood risk as a result. It also includes dredging and de-silting of rivers, and managing the grass, the trees and other flora on the flood embankments. Those are all activities that we undertake. The overall budget for our maintenance work of that kind is reducing as a result of the spending review, so we have to try to make it work as efficiently and effectively as we possibly can.

Now, there are some areas where the maintenance work that we do, and particularly the pumping work that we do, has primarily an agricultural drainage benefit rather than a flood risk protection benefit. In those instances we are embarking on discussion, with either the IDBs or groups of landowners and farmers, to see if others can take over responsibility for that work.

That is partly because we can no longer afford to do it, partly because we have to make taxpayers’ money go as far as possible in countering flood risk, and partly because, in some cases, groups of landowners will be better placed to carry out the work. What we do not want to do is withdraw suddenly, and so in the places where this is happening, we are in the process of a two or three-year period of discussion and putting new arrangements in place. However, we will not be able to carry on doing absolutely everything that we have been doing up to now in the future.

Q140 Ms Ritchie: Do you think reduced Environment Agency maintenance has led to flooding in places which otherwise might have been spared?

Lord Smith: I would certainly hope not.

David Rooke: I think it is a very difficult question to answer. These things are very complex, and it depends on what standard you want to protect against. We have had communities where defence is unfortunately overtopped, because we had a very extreme flood, and they have flooded, and they were protected to a high standard. It is the same with agricultural land. What standard do you want it protected against? It is a matter for investment decision-making. Do you maintain it to ensure that that standard is then available when you get the heavy rain, or the snow melt, or the tidal flooding?

So it is a very complex question to answer, and it is also one that is very local and very specific. I am sure there are people who can demonstrate to us that there has been additional flooding, and yet there may not have been flooding in other places as a consequence. So you need to look at it on a very local basis, or a catchment basis, because clearly the water has to go somewhere, and if it is not one place it will generally be another place.

Q141 Neil Parish: I have a similar question, really. On what evidence does the Environment Agency make a cost-benefit judgment as to the appropriate spend on maintaining watercourses? How can local communities be sure that these lead to sufficient levels of investment before a flooding incident? You know, this is very much about maintenance, dredging and the like. How do we get to this situation?

Lord Smith: At the moment, we spend about £20 million a year on channel maintenance: dredging, de-silting, cutting back weeds and growth, and so on.

Q142 Neil Parish: Is that over the whole country?

Lord Smith: Over England and Wales. When I first became Chairman of the Environment Agency, large numbers of people said to me, ‘Why aren’t you doing as much dredging now as you were 20 years ago?’ I asked exactly the same question, and I demanded that we did some pilot investigative work to test the impact of dredging on different kinds of watercourse, to see how beneficial it might be or might not be.

The result of those tests, I suppose, was fairly predictable. It revealed that there are some instances where dredging helps, and there are other instances where dredging is absolutely no help at all. It depends entirely on the nature of the soil, the level of flow, the kind of river, and so on. There will be places where dredging will undoubtedly help to carry away water more quickly at a time of flood.

There will be other places where dredging would probably be a waste of public money, because the silting would simply come back very rapidly. What we need to do is establish where the places are where dredging is going to help, where it is not happening at the moment, and where, as part of the overall approach to maintenance and to improving flood risk protection, it would make sense to do it. That work, on a case-by-case basis, as for example with the Tone and the Parrett, is now under way.

David Rooke: Let me just add to that. In terms of the overall priority, we look to maximise the benefit-cost. We are looking to maximise the return for the taxpayer making the investment in maintenance, and that drives the maintenance programme. When the National Audit Office looked at the Environment Agency in 2007, they drew to our attention the fact that our investment in maintenance was going into the sort of low and medium consequence systems, rather than the high consequence systems, where there is the greatest risk of damage to property and risk to life.

Since that period, we have directed funding towards those high consequence systems, so that now 79% of our asset maintenance money is directed at those areas. I think the final thing to add is that all our programmes of work, both capital and maintenance, are approved by our regional flood and coastal committees, so we have got the political input, given the membership from local authorities on those committees, plus local people who are also all on those committees, to enable local decisions and local choice to have a big influence in terms of that programme. In fact, we cannot implement those programmes without the committees’ support.

Chair: Order, order, we stand adjourned. I apologise. We will come back, and if I could ask colleagues to come back within fifteen minutes of this one vote, then we will carry on. Thank you for your forbearance.

Sitting suspended for a Division in the House.

On resuming-

Chair: We recommence. Thank you for your forbearance.

Q143 Neil Parish: One last part of this question is that I think local communities are very concerned. They do not believe over the years that there has been enough level of investment, especially in that of dredging and maintaining of watercourses, and that while it is great to have nature conservation, penning the water levels has allowed a lot of silting. Now, we should be able to pen water, and then we should be able to release it. I am just not entirely sure whether the Environment Agency is taking this on board.

Lord Smith: We are very much aware of the concern, and indeed it is the subject of many representations that we are receiving at the moment from the NFU, the CLA and others as well. We are taking a strenuous look at where work specifically to address building up of silt can be of real benefit. I would just add one other thing, and that is that I think we also need to get rather better at assisting farmers and landowners to carry out their own work at dredging and de-silting.

Neil Parish: Absolutely.

Lord Smith: Of course in many cases, as the riparian owners, they are responsible for that.

Neil Parish: But they have been stopped in previous years from doing it.

Lord Smith: Making it easier for them to do that, whilst of course still acting within in the law and not putting bureaucratic barriers in their way, is something we are also actively looking at.

Q144 Mrs Glindon: What accommodation has the Environment Agency made or will it make in its budget for revenue funding to support additional capital projects in future years?

Lord Smith: Nowadays when we build a new capital project we do very much consider what the maintenance requirements of that are going to be. I will ask David to give you the detail in a moment. It is also worth bearing in mind that quite a lot of the capital work we undertake is improvement work on existing defences. So we are actually making defences in better condition, more able to sustain themselves over the years to come, than they were before.

David Rooke: Where we are improving defences, we will be looking to reduce our maintenance for a while, and then obviously we will need to do more as the defences age. When we are assessing schemes now, we also look at what we call wholelife costs, so we look not just at the capital costs of building a scheme, but also what it would cost us to maintain it over the lifetime of that scheme.

We are generally looking at lifetimes of 50 years-not always, but that is a good rule of thumb. Within the partnership funding policy, the contributions we are getting from partners towards those schemes include, within the contribution, not only a contribution towards the capital cost, but also a contribution towards the ongoing maintenance.

Q145 Mrs Glindon: Has Defra committed to funding the ongoing maintenance of the additional assets to be built using the £120 million of new funding announced for the next two years?

Lord Smith: Presumably, the same rules as have just been explained would apply.

David Rooke: Exactly. So within the £120 million, £60 million of that is for accelerating schemes that are already in the programme, and £60 million is the growth fund that is used to provide additional funding for those growth schemes that the Government has announced.

There is no increase within the Environment Agency’s revenue budget to accommodate any additional operating or revenue costs associated with those schemes, but where we are getting contributions in, which we are for most of those schemes, then within that there will be an element towards the maintenance that we will then use to maintain those schemes going forward-or local authorities will, because not all of those schemes are Environment Agency promoted schemes. If you take Leeds, for example, Leeds City Council have agreed to promote that scheme, and so they will be responsible for the maintenance going forward.

Q146 Mrs Glindon: Despite the fact that budgets have been reduced within the Environment Agency, you think that this programme funding that you have just described will be sufficient to keep maintenance going.

David Rooke: Each year we prioritise our maintenance needs, so we look right across all our maintenance needs and prioritise them to maximise benefit-cost. Clearly for those urban areas where the growth money is going, then it is highly likely that they will be high up the priority list, and able to attract maintenance funding.

Q147 George Eustice: I wanted to ask a bit about the general drainage charge, which I know the Anglian region use. I wanted to press you a little bit more though, on the answer you just gave Mary Glindon. The ADA specifically raise this as a concern; they say that your maintenance budget-revenue budget-has about halved, and yet there are more and more projects coming onstream. I understand all the mitigating arguments you have just put to deal with the risk, but is there no risk at all here? Have they got it wrong?

David Rooke: No, there is risk. Clearly there is risk, but we are in the risk management business, and we will need to manage those risks within the funding that we have been allocated through the spending review.

Lord Smith: In relation to the general drainage charge issue, we do at the moment have a drainage charge in the Anglian region, which has been in place for quite some time. The question of whether a drainage charge could be put in place elsewhere in the country would, of course, be an impost on local people. One of the questions that we would need to address before we put any such charge in place would be how the Treasury would view this, because at the moment the Treasury’s approach tends to be that a drainage charge of that kind would count as a tax, and our maintenance budget would be reduced pound for pound. That would obviously leave us no better off than we are at the moment

Q148 George Eustice: Is that what has happened in the Anglian region? I think this comes under the Water Resources Act, which gives them the authority to levy a charge. Are you saying that when they levy that charge it is knocked off their support from the Environment Agency?

David Rooke: No, it is not. The scheme in the Anglian region has been there for a long time, and so there is already an allowance built in to our spending review settlement that takes all that into account from a long time ago.

Q149 George Eustice: So a new scheme could not draw its authority from the same bill? It needs fresh consent from the Treasury; is that what you are saying?

David Rooke: Yes, it does.

Lord Smith: It would need fresh consent from the Treasury. I think it could be done under the existing legislation.

David Rooke: Yes, it can.

Lord Smith: However, we would need to get Treasury approval before we were able to do it.

Q150 George Eustice: Have you sought approval in other areas? Is it something you have explored for other areas?

David Rooke: No, we have not.

Lord Smith: We have not at this stage. First of all, we would need to discuss it in detail Defra and with Ministers in Defra. If they were minded to encourage us to go ahead, then we would need to have the discussion with the Treasury.

Q151 George Eustice: Is it an idea you are attracted to, which you would like to pursue, or not? Or do you think it is actually just an old device?

David Rooke: No, it is something that we are seriously discussing with the NFU. The NFU have this raised this with us; the NFU Council specifically raised this with us, and we are just in the process of agreeing an action plan for things to take forward, working with the NFU. That is on the list: to consider the broadening of the general drainage charge scheme across the country.

Q152 George Eustice: On the internal drainage boards, I think you used the term that you were trying to encourage them to take on work where they might be best placed to do it, and landowners the same. How are you going to encourage them to take that on?

If you say to someone, "We think you’re best placed to do this", that is probably quite alarming to that person. It sounds like you are trying to offload responsibility onto them without money. Is there something that could be done to encourage them to take it on, perhaps through allowing them to retain the precept funding that they currently give the Environment Agency, for instance, as a kind of carrot to take on more?

Lord Smith: David touched on this a little while back. The picture is somewhat complicated because there is a precept paid by IDBs to the Environment Agency to reflect the work that is entailed on main rivers as a result of IDB activity, in draining and pumping their watercourses. There is also a payment made by the Environment Agency to IDBs to reflect some of the work that they do that would otherwise fall to us. I think I am right in saying that the figures overall were about £7 million or £7.5 million paid in precept by IDBs to ourselves, and about £4.5 million paid by us to IDBs, so there is already a two-way flow of funds.

Q153 George Eustice: Should that two-way flow change, given that you are trying to offload more responsibility to the IDBs?

Lord Smith: One of the things that I am certainly keen to talk with the IDBs about-and we are in very regular discussion with them-is where they might be able to take on responsibilities from ourselves. If that is diminishing the amount of work we have to do as a result of their activity on their watercourses, then absolutely, let us discuss with them what happens to the precepts.

David Rooke: It is worth adding that these are the decisions taken by our regional flood and coastal committees, so our committees are charged with the responsibility of setting the precept, deciding how much money to give to IDBs for what is called highland or upland water contributions. In fact, what we are finding is that IDBs are actually asking us if they can do the work, rather than us asking them to do the work, so it is the other way round. There is an appetite from some internal drainage boards to do more.

Lord Smith: It is also worth saying that IDBs vary one from another; some have a greater appetite and a greater keenness than others. We have to decide what is best in any individual instance.

Q154 Chair: There seems to have been enormous delay in the publication of the SUDS regulations, with a delay of up to 2014. Why do you think the Government is finding this so complicated?

Lord Smith: I know that the Government undertook quite a detailed consultation on this. They are considering the outcome of that consultation. From our point of view, we would want to encourage the implementation of the SUDS part of the Flood and Water Management Act at an early date, because sustainable drainage is one of the ways in which flood risk will be diminished over time.

Q155 Chair: What assessment have you made of the contribution that SUDs can make to flood defences generally?

Lord Smith: It would be difficult at this stage to quantify, but it would certainly have a beneficial effect. It would particularly have a beneficial effect for new developments that were being undertaken, where it is actually very easy to include SUDS within the planning of the development. Of course, making sure that new developments do not add to flood risk is one of the very important responsibilities that we have as a statutory consultee in the planning process.

Q156 Chair: Do you think that retrofitting SUDS to existing developments is complicated?

Lord Smith: It is probably more complicated than putting in new SUDS for new developments. There will be some places where it is easier to do than others. There will be some areas where it is very, very difficult to do, especially in very heavily urbanised areas. However, I think encouraging, providing guidance, and persuading developers to do the right thing is something that would be very welcome.

Q157 Chair: You mentioned that the Environment Agency now has the statutory consultee status. Would it not also be good for water companies to be considered as statutory consultees, so that we can avoid the situation of being automatically expected to connect to major new developments?

Lord Smith: In terms of water supply or in terms of sewerage services, or both?

Q158 Chair: I am thinking of the surface water that Sheryll Murray referred to earlier. In my own area, there is specific evidence that shows surface water running off the roads and other tarmac areas is going into drains, and coming back into people’s houses as sewage. I think that if you could have water companies accepted as a statutory consultee, that will go some way to avoiding the situation with new developments-major new developments; I am not talking about two or three houses, but 100, 200 or 300 houses.

Lord Smith: Of course, what you have identified is absolutely one of the major problems that is arising frequently now from the concreting over of very large portions of land, especially in urban areas, where the run-off of water has nowhere to go but into the drains, and that comes back up at any time of heavy rainfall. That is why sustainable drainage becomes very important, not just for buildings that are developed, but also for all the associated infrastructure such as roads.

Q159 Chair: But would you not accept that it is particularly the problem with combined sewers in recent floods and surface water run-off?

Lord Smith: Yes, and the problem is exacerbated, of course, by misconnections in some developments over the last 10 or 20 years, which mean that foul water goes into storm drainage systems. The decisions about when and how to implement sustainable drainage systems, when to activate that part of the Act, and whether to give water companies a statutory consultee role, would all, of course, have to be Government decisions.

Q160 Chair: It is helpful to have your view. Do you believe that all new developments should have SUDS fitted at the planning stage?

Lord Smith: I would certainly hope that that would be the aim, yes.

Q161 Chair: Would you accept that it should not always be local authorities that pay for the maintenance of SUDS, and that, where a water company stood prepared, and it was costed, they could take over the maintenance of SUDS?

Lord Smith: That would be a matter for Government, for water companies, and for local authorities to decide. Local authorities have the overall oversight responsibility under the Act, but I am sure that local authorities would welcome involvement of other players in the picture.

Q162 Mrs Glindon: Is guidance on planning for flood risk areas sufficient, or is there a need for legislation to tighten the planning regime and limit new development in areas known to be at risk of flooding?

Lord Smith: We are a statutory consultee; where there is a significant risk of flooding we will advise. It is right that our role in this process is advisory, rather than decision-making, because the decision-making has to rest in the hands of local elected representatives, but we will give the very best expert advice that we can about the degree of flood risk and how to avoid it.

David Rooke: If I could just add to that, the Government published its National Planning Policy Framework, which set out Government advice in relation to all planning, and flood risk was included within there. The Government also published technical advice to support the National Planning Policy Framework, and that is now being applied. What we are finding is that local authorities are following that advice. They are taking on board the advice we are giving on development plans and individual planning applications, so that 98% or 99% of our advice is actually being acted upon.

Q163 Mrs Glindon: So do you think that the Environment Agency should be given a stronger and more direct role in the approval of applications to build in flood-risk areas?

Lord Smith: No, I think our role has to remain that of a consultee. In the overwhelming majority of cases, as David has just said, our advice is followed by local authorities, but the decision has to rest in the hands of elected local authorities.

Q164 Barry Gardiner: Just on the issue of combined sewers, you spoke of the need for partnership, and you rightly spoke of the way in which the local authorities have a lead role very often in these matters. However, the Environment Agency often has a role here as well, because the reason for the surface water being put into the foul water sewer is that the previous connections into the waterway have been blocked up, and the EA will not allow those connections to be reopened. Now, the result of that is that instead of less polluting water coming into the river or the brook, it goes into the foul sewer, and the foul sewer, which is now at capacity, then comes up in exactly the way that the Chairman suggested, into people’s living rooms. Then the foul sewage is what goes into the brook or the river. So there is a role here for the Environment Agency to work with others to reopen those connections and free this area up.

Lord Smith: We would certainly want to work with both local authorities and water companies in order to find the most sensible solution in any individual instance. The CSO process where a combined sewer outflows into rivers, or in some cases into estuaries, as a result of storm water filling up the drains and there needing to be some release out into the environment, is of course very much in place. It has happened, I fear, rather a lot over the course of the last nine months or so, but how to get the best balance in normal circumstances will depend very much on the individual circumstances, and we would certainly want to work with local authorities and water companies on that.

Q165 Neil Parish: I will keep it quick. In the village of Feniton near Honiton, 50 houses were turned down by the local authority, and it potentially floods the rest of the village. That goes to appeal and the appeal inspector allows it. What does the Environment Agency have when it goes to appeal? Do you actually make your evidence known to the inspector or not?

Chair: If I may rephrase it, the question is: the local authority turns the planning application down, it is overruled by the planning inspectorate-

Neil Parish: That is exactly my question though.

Chair: Which pertains: the Localism Act, the National Planning Policy Framework, or the Planning Policy Guidance 25?

Lord Smith: In a circumstance of this kind, we would have provided our strong and clear advice to the local authority in the initial process. That advice would be there on the record, for the inspector to consider, when it came for appeal to the Secretary of State.

Chair: What we do not understand is how it is overruled.

Neil Parish: Yes, why it overruled?

Q166 Chair: Why is it overruled? If you have a status of statutory consultee, and the whole point was to reduce the number of new developments likely to flood, why is your advice being overruled? What local residents object to is losing control. We have all got our local examples; we could go round the table with every local example. In my case it is Muston Road in Filey with 300 houses. However, it drives people potty that they take all the precautions they can to keep their house safe, yet your advice is not worth the paper on which it is written because the planning inspector comes from out of town and overrules you and the local planning authority.

Lord Smith: That is the system that the Secretary of State at DCLG has put in place, and it is very much up to him to make decisions about such matters and to consider the report that the inspector makes to him. What I am not absolutely certain about is whether we provide further advice to the inspector or not.

David Rooke: We do, if the grounds of challenge are in relation to flood risk. If the appeal is on other planning grounds then our advice in relation to flood risk would be taken into account, but we would not normally-if there was a public hearing, for example-be called to give evidence. If the challenge on the appeal is around flood risk, then we would give evidence, and in fact, in previous jobs in my career I have given evidence to planning inspectors on appeals, and they have taken that into account.

Chair: Thank you to my colleagues. Lord Smith and David Rooke, thank you very much indeed for being with us, for being so frank and honest in your answers, and for your time and contribution to our inquiry on flooding. It has been a pleasure having you, and I am sure we will see each other again ere long.

Prepared 25th February 2013