Flood defences are to receive a £150m cash injection over the next four years following the Government’s Spending Review.
The move is a bid to ensure insurers continue to provide cover for homes in the growing number of flood-risk areas. As insurance is a prerequisite in obtaining a mortgage, concerns are mounting that the property market could collapse in high-risk areas. But insurers are saying no guarantees can be made.
Margaret Beckett, secretary of State for the Environment, Food and Rural Affairs, said: ‘This level of resources, with the simplification of the administration of flood defences and effective partnership working with homeowners, local government, the Environment Agency, scientists and the insurance industry will allow us to reduce the risk of threats to life and damage to property from flooding.’
Following the huge amount of claims paid out by insurers in autumn 2000 after widespread flooding damaged over 10,000 properties, the Government insisted insurers continued to offer cover to flood-risk areas until January 2003. With this deadline looming insurers welcomed the move, but no promises have been made that all properties will be protected.
Mary Francis, director general of the Association of British Insurers, said: ‘We will need to look at the figures carefully to ensure the new money is available when and where it is needed.’
Norwich Union (NU) said more action was needed if the Government wanted to guarantee all homeowners can get cover.
Nick Pierson, head of household products at NU, said: ‘This is a complex issue, where not only funding but organisation, prioritisation and land use management need to be overhauled to help reduce the problem. Despite this funding, it will not be possible to protect all communities and some homeowners may still find it harder to get flood cover.’
A river management prog-ramme was called for by Royal & SunAlliance (RSA) to ensure future cover. Steve Broughton, managing director of RSA, said: ‘This funding should be used as effectively as possible if we are not to find ourselves in a similar situation in a few years. This means joined-up management through a proper flood defence and river management programme across the key regions.’