Changes proposed to FCERM Partnership Funding rules

Major refurbishment work underway at Keadby Pumping Station, supported by FCERM Partnership Funding (Environment Agency)

 

Over the past 18 months the Environment Agency (EA) and Defra have been preparing proposals for a future investment programme for flood and coastal erosion risk management (FCERM) beyond 2021. This will inform government decisions on funding policy which guides the allocation of the Grant in Aid (GiA) through the Partnership Funding calculator.

A series of proposed changes to Partnership Funding rules are being considered by Defra and the EA. These rules define the maximum grant payment that the government will contribute towards specified outcome measures. Their stated intention is to better reflect wider benefits that can be achieved through FCERM investments, such as safeguarding mental health, and the government’s 25 Year Environment Plan objectives. Defra and the EA set out the proposals in a paper to the most recent round of regional flood & coastal committee meetings. ADA was consulted at the start of November.

 

Proposed Partnership Funding rule changes

Payment rates would be updated and increased to take into account inflation since 2011 when the policy was first introduced. It is also proposed by that they would also be amended to take account of the mental health impacts of flooding, which are currently poorly valued in flood risk appraisals and were not fully understood when the policy was agreed in 2011.  This is supported by evidence from the EA and Public Health England, which shows that mental health impacts are a major part of the householder experience of flooding.

ADA supports these changes but they need to ensure that both physical and mental health impacts are captured. Also ADA has highlighted that linking this directly to homes/buildings may not fully reflect mental health impacts amongst rural communities and farming, as sadly demonstrated by flood events in Somerset and Cumbria.

 

An Intermediate Risk Band would be introduced to encourage schemes (particularly surface water) that cannot currently achieve a high enough Standard of Protection to trigger a change to a lower likelihood of flooding category.

ADA supports this change to the current risk bands and the intention to help more surface water schemes progress.

 

Climate Change Impacts would be introduced to better reflect climate change in the funding system, by recognising the benefit to households and properties that become “at risk” during the lifetime of schemes. Some schemes have a design life of 100 years. This amendment would account for the longer term impacts, better integrating climate change into our FCERM scheme appraisal.

ADA supports the change but advocates that they should apply across all areas of impact and therefore include land and infrastructure in addition to households and properties.

 

Environmental Benefits (Outcome Measure 4) would amend the existing environmental outcome measure to better account for the additional environmental benefits delivered by FCERM schemes rather than only focusing on statutory designated sites, like Sites of Special Scientific Interest.  This amendment would encourage FCERM schemes to embed natural flood management and natural capital approaches and support the objectives of the government’s 25 Year Environment Plan.

ADA supports this change, but emphasised the importance of environmental enhancements being applicable throughout the whole catchment and not limited to upstream attenuation measures. ADA has also highlighted that unlike other risk management authorities, internal drainage boards do not have a revenue funding stream from central government for conservation and environmental enhancement.

 

The EA is also proposing to introduce an Asset Replacement Fund. This fund would help the EA manage deteriorating assets more effectively by planning for their sustainable replacement before they require emergency works. Waiting until emergency intervention is required can significantly increase the overall cost of managing flood risk. The fund would be used as part of the existing Partnership Funding arrangements. Where there is no realistic prospect of securing local contributions for schemes with a high benefit-cost ratio, this fund could be used to ensure important good value for money projects can still be delivered, subject to meeting eligibility criteria.

ADA strongly supports this proposal, but has emphasised that it is essential that it applies equally across assets and systems operated by all risk management authorities and not limited to the EA.

 

These proposals are the first step to implement changes that can be delivered within existing legislation. Further changes may be considered, but Defra and the EA have stated that these may take longer, or require revisions to legislation/government policy. ADA will continue to work with Defra to identify and help implement those changes.

ADA used the teleconference, regarding these proposals to raise with Defra and the EA the urgent need to ensure that the value of infrastructure and transport connectivity, and agricultural land and production are properly captured within the benefits calculations for Partnership Funding. ADA highlighted that the valuation rules for agricultural land and production will need to be substantially revised in line with any changes to a future government’s policy towards agricultural and environmental land management and associated subsidies if these move towards a payments for public good approach.

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