Industry responds as Reeves unveils £4.2bn flood defence pledge

Insurers have responded with caution to chancellor Rachel Reeves’ commitment to invest £4.2bn in flood defence infrastructure over the next three years.

Reeves announced the investment yesterday (11 June 2025) as part of the government’s spending review.

She stated that the funds – to be deployed between 2026 and 2029 – will support the government’s economic growth mission by strengthening the UK’s ability to manage flood-related damage.

However, Nathalie Dufresne, chief underwriting officer at RSA, said the chancellor’s commitment does not go far enough, saying the ”£4.2bn investment over three years still falls £300m short of what the National Infrastructure Commission recommends to properly protect the UK”.

She added: “Underfunding flood defence programmes could cost the government far more in the long run.

”With nearly four out of five people already convinced the UK isn’t prepared for climate change, this move risks not just damage to homes, businesses and infrastructure, but to political and public trust.”

’Employed effectively’

The insurance-backed flood reinsurance scheme Flood Re also responded to Reeves’ announcement, having previously urged the UK government to invest at least £1bn annually in flood defences. 

The scheme welcomed the headline commitment but stressed the need for careful implementation.

Bridget Rosewell, chair of Flood Re, said: “With one in four homes at risk of flooding, the UK faces one of its greatest climate change challenges.

”The government has made difficult choices in its spending review, but remains committed to tackling this issue, pledging £4.2bn over the next three years for new flood defences.

“The important thing now is ensuring the funding is employed effectively to support the UK’s insurability going forward. The consultation on how the funding is spent is a welcome opportunity to focus efforts on resilience, maintenance and innovation.”

Flood Re highlighted that infrastructure alone will not resolve the UK’s exposure to flood risk. Most flooding, it noted, occurs at shallow depths – under 15 centimetres – which means cost-effective household adaptations could play a vital role in preventing damage.

Rosewell explained: “Households can take cost-effective steps such as installing non-return valves and self-closing airbricks.

”Outdoor spaces also offer opportunities for flood prevention, helping capture water before it enters the home and repurposing it for garden irrigation.”

She added that Flood Re’s Build Back Better initiative, which enables resilient repairs after a flood, is helping households recover more robustly – but warned that more public engagement and behavioural change is needed to keep pace with escalating climate risk.