Government flood defence spending cuts will threaten availability of cover, warn insurers

The ABI is to ramp up its campaign to have flood defence spending increased after government leaks this week suggested a cut in spending.

Last month, David Miliband, secretary of state for environment, food, and rural affairs, wrote to the Prime Minister outlining his concerns about climate change.

He wrote: "We need to manage growing flood risk as we face the impact of already unavoidable climate change."

But, it has now emerged that the government plans to cut spending on flood defences while the number of homes at risk of flood damage continues to rise.

The first cuts will hit flood spending resources, a Defra spokesman told Insurance Times. He said: "The potential for cuts will affect the resource budgets for the Environment Agency."

This means that maintenance of flood defences could be worst hit, but new flood defence building will continue.

The ABI said it would campaign heavily against any severing of budgets. "We met Ian Pearson [environment minister] in July and will continue to do so.

"We are also going to be at the Labour Party conference lobbying heavily on climate change. We see this as one of the main issues going forward."

Royal & SunAlliance also warned that flood insurance may be become difficult to obtain. In a statement it said: "Availability and affordability of flood insurance depends on the flood risk being adequately managed.

"The government must accept that new building development in flood risk areas without adequate protection could result in homeowners and businesses finding it difficult to obtain flood insurance."

Further budget reviews are expected next year when the government announces its intentions for its comprehensive spending review.

‘ Defra is to consult on proposals to give the Environment Agency powers to make local authorities responsible for sea flooding and coastal erosion.

The move would give 90 coastal local authorities power to plan budgets and create projects for managing flood risks.

The consultation will run for 12 weeks until 31 October.