Flood defences: what's happening to funding?

Published: 9th Dec 2015

In brief

Claim

Government investment in flood defences will be £2.3 billion in the next six years, higher than in previous parliaments.

Conclusion

Over the next five years capital spending on flood defences will be £1.9 billion, which is a fairer way to compare spending with previous parliaments. Either way, it's an above-inflation increase compared to the previous two parliaments.

"On flood defence spending, over the last Parliament we spent £1.7 billion in capital spending—a real-terms increase on the £1.5 billion spent between 2005 and 2010. Our next six-year programme is £2.3 billion, which again represents a real-terms increase."

Elizabeth Truss, Environment Secretary, 7 December 2015

It's correct to say that the government's plans mean capital spending on flood defences and coastal erosion is set to be higher in this parliament than under the previous two parliaments, on top of inflation.

The £2.3 billion figure is actually the cash amount to be spent over six years. If we're comparing to previous parliaments it's more useful to look at a five year period and use real terms figures, which account for inflation.

In the five years from 2015/16 capital spending will be £1.9 billion, in 2014/15 prices.

That compares to over £1.7 billion under the Coalition in the five years from 2010/11, again adjusted into 2014/15 prices. In the last five years of the Labour administration, from 2005/06 onwards, capital spending was £1.5 billion in cash terms but when adjusted was also close to £1.7 billion. We make capital spending under the Coalition about £15 million higher in real terms across the parliament, so not as substantial a rise as suggested by the cash terms figures given by Ms Truss.

This isn't the full story on spending on flood defences, because not all the spending is capital spending. We don't yet know how total spending will fare over this parliament.

Capital spending is set to be £1.9 billion this parliament

Capital spending is money invested in prevention and protection against flooding and coastal erosion. This doesn't include day-to-day costs, which come under the heading of 'resource' spending in the language of government budgets.

Defra's capital spending on the defences was just under £1.7 billion in the five years from 2010/11, in cash terms. In the next five year period—during the current parliament—it's set to be over £1.9 billion. The government is counting an extra £375 million in the first year of the following parliament (2020/21) to bring the total up to £2.3 billion over six years.

It's a real terms increase, as Ms Truss says. Considering predicted inflation over the period changes the spending over the current parliament from over £1.9 billion to a bit under it, in 2014/15 prices. That's up from about £1.7 billion in the previous two parliaments (again, adjusted to be in 2014/15 prices).

You could argue that looking at spending by parliament isn't the most useful thing to do, as we've written before. That's because the first year of spending during a given parliament will be based in large parts on the previous government's plans.

Resource spending is not yet known

You might also argue against looking at capital spending alone, with some evidence that in practice there's a "grey area" between capital and resource spending. For instance some projects to dredge rivers are funded from the capital budget on the basis that they're large in scale, while dredging the same stretch of water the following year can be counted as routine maintenance spending.

In the past the government has pointed to total funding, not just capital spending, when defending its record on flood spending. This includes the resource budget. The government has pledged to protect the part of this budget that includes maintenance to flood defences, but it's not immediately clear how the total resource budget will fare.


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