Flood report underlines need for infrastructure investment

Posted: Monday 15th February 2010

Official estimates of the cost of the 2007 summer floods to households and businesses in England strengthen the case for investment in critical infrastructure across the economy.

Flood report underlines need for infrastructure investment

Official estimates of the cost of the 2007 summer floods to households and businesses in England strengthen the case for investment in critical infrastructure across the economy.

It is estimated that the financial costs attributable to the 2007 floods were about 4.0 billion, the Environment Agency said this week. Some 3.2 billion fell on households and businesses.

An economic impact of this magnitude, on top of the social dislocation and misery experienced in the areas that bore the brunt of the flooding, makes it clear that everything possible must be done to ensure that property and essential services are protected in future.

The report shows that the cost to critical infrastructure and essential services was about 660 million, with water services most affected (186 million) followed by roads, power, agriculture and education.

Reporting its research on potential future flooding, the agency says that 1 in 6 homes are at risk. As the impact of climate change intensifies, the cost of damage could rise by 60 per cent by 2035 unless preventive measures are taken. The agency believes that investment will need to double to 1 billion a year.

Industry response

The industry throughout the country responded promptly to the potential risk in the aftermath of the 2007 floods and the recommendations of the Pitt report commissioned by the government. Immediate action was taken where necessary, and preparations made for major investment in future industry management plans.

Water companies recognise that much of their vital infrastructure, including treatment plants and distribution assets sited close to rivers, requires increasing protection. Equally, the sewerage systems in many urban areas often over a century old will need continued investment to cope with more extreme weather.

In the five years to 2015 the water industry regulator Ofwat has approved capital expenditure of 414 million on resilience projects to be carried out by water companies. This was less than the industry had proposed but welcome nonetheless. The industry is strongly supporting the Flood and Water Management Bill (now before Parliament) which it hopes will clarify responsibilities for surface water management and facilitate investment by local authorities and other agencies alongside the industry.

Water companies acknowledge an important role for themselves in ensuring that property and services are protected against future flooding. But they look to government and regulators to establish the coordination mechanisms and legal structures needed to make the most of investment at the level the agency is seeking.




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