The government has ruled out using its new Green Investment Bank to plug the flood defence funding gap.
Business minister Mark Prisk, replying to a parliamentary written question by Labour MP Willie Bain, said that the GIB would not invest in flood schemes because they do not generate revenue that can be used to repay loans. Last year’s comprehensive spending review has cut flood defence spending to £500m per annum over the next four years- half the £1bn that the Environment Agency has estimated will be needed to guard against the increased risk of flooding resulting from climate change.
The government is setting up the GIB to pump investment into the infrastructure required to underpin the government’s drive to encourage low carbon-emitting economic growth.
Glasgow MP Bain asked what estimate the government had made of the potential sums that the GIB would spend on flood defence projects during the first three years of its operation.
Prisk replied: “Flood defence projects in themselves do not generate revenue streams which can help fund the costs of any capital provided by the Green Investment Bank or pay back other sources of financing.
“The benefits of flood defence projects tend to be in terms of avoided losses, land and property values, and insurability against flood damages. We do not therefore anticipate that the GIB will be making any such investments.”
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