Agenda item

RESOLVED:

That the Leader of the council writes to the Chancellor of the Exchequer, Secretary of State for Department of Communities & Local Government and Secretary of State for Department of Environment, Food & Rural Affairs, stating that:

a)    Because of the scale of the River Thames Scheme and the potential economic impacts at risk if it does not proceed, this is a nationally significant scheme and it is not appropriate to apply Defra’s FDGiA Partnership Funding model to it.

b)    Surrey County Council has no capital reserves to meet Surrey’s local contribution for the River Thames Scheme as requested by the Environment Agency, and requests that Central Government provide the capital required for the scheme.

c)    Should Central Government not provide the capital required for the scheme up-front, then Surrey County Council would be willing to take out a loan to pay Surrey’s local contribution for the River Thames Scheme (at a cost of approximately £4.5m per year for 40 years) subject to Central Government funding the annual costs of borrowing.

Reason for decision:

Surrey County Council’s current budget for flood alleviation work is very limited. There is not enough funding to develop schemes for all of the areas at significant risk of flooding in the county. The 2013/14 floods highlighted a number of risks across Surrey and if a flood event of a similar magnitude were to take place again in the coming years, the council’s inability to carry out work in the relevant areas owing to resource and budget constraints means that many locations would continue to suffer the same or worse economic and social damage to their communities.

It is also essential that greater protection from River Thames flooding in particular is provided for the many Surrey residents and businesses currently affected. The funding arrangements of the proposed RTS scheme present a high risk that it is unaffordable and will not be delivered.

[The decisions on this item can be called in by the Environment and Infrastructure Select Committee]

The Cabinet Member for Highways introduced this report that explained how in April 2017 when Cabinet approved Surrey’s Local Flood Risk Management Strategy it recommended that officers identify additional sources of funding to increase the current level of flood alleviation work across the county. This was because limited council budgets were struggling to resource the amount of schemes required to protect the 30,000 properties that were at risk of flooding in Surrey. The Met Office was predicting more frequent severe rainfall in coming years and if this was the case, it was likely that more areas beyond those already identified would become at risk of flooding in the future. Therefore if a funding solution to this issue was not found then future flood events were likely to cause significant social and economic harm to residents in Surrey.

A further contributing factor to this situation is that the Government’s funding formula for capital flood alleviation schemes was such that “local contributions” were required to pay a significant proportion of the costs. This was sometimes possible in the case of smaller scale schemes and the council had a programme with some capital support for such schemes across Surrey. It was not practical however to raise sufficient local contributions with very large scale projects such as the River Thames Scheme (RTS), a project of national significance, which, under the current formula, presents a funding gap of at least £257 million.

The RTS is a “main river” scheme which means that the Environment Agency (EA) is responsible for the project’s management. However the Agency has asked whether the county council and the other local authorities affected can together make up the funding gap that remains after all other possible and likely local contributions have been accounted for. Although yet to be confirmed, it is estimated that the county council’s share of this would be in the order £100m. This is not a reasonable request to make, particularly in the context of the council’s financial position.

If there is no prospect of the funding gap for the RTS and the demand for flood alleviation schemes elsewhere in the county being met, unless Government provides additional funding, alternative options must be considered. These could include raising finance locally through a levy or a council tax precept. These options have inherent risks and impacts as set out in the report.

The council could not ignore the increasing risk of flooding to its residents. Given the lack of funding available from Government at the current time for both the nationally significant RTS and smaller local schemes, Cabinet was asked to consider how best to respond.

He emphasised that flooding was a risk to all residents whether they lived near a river or not explaining that flash floods could happen anywhere and drew attention to the maps provided with the submitted report.

The Deputy Leader explained how this was a national issue and the funding gap had been broken down proportionately between the five councils involved but even so, was an impossible amount for local government to find in today’s financial climate.  There would also be future maintenance costs to consider.

The Leader referred to recent flooding experience in Germany and said that Surrey could not contain a similar 10 feet flood.  The RTS was needed and he felt that Government should take responsibility.  He stated that he had a meeting arranged with the Treasury and he would fight for Government to take responsibility for this.

RESOLVED:

That the Leader of the council writes to the Chancellor of the Exchequer, Secretary of State for Department of Communities & Local Government and Secretary of State for Department of Environment, Food & Rural Affairs, stating that:

a)    Because of the scale of the River Thames Scheme and the potential economic impacts at risk if it does not proceed, this is a nationally significant scheme and it is not appropriate to apply Defra’s FDGiA Partnership Funding model to it.

b)    Surrey County Council has no capital reserves to meet Surrey’s local contribution for the River Thames Scheme as requested by the Environment Agency, and requests that Central Government provide the capital required for the scheme.

c)    Should Central Government not provide the capital required for the scheme up-front, then Surrey County Council would be willing to take out a loan to pay Surrey’s local contribution for the River Thames Scheme (at a cost of approximately £4.5m per year for 40 years) subject to Central Government funding the annual costs of borrowing.

Reason for decision:

Surrey County Council’s current budget for flood alleviation work is very limited. There is not enough funding to develop schemes for all of the areas at significant risk of flooding in the county. The 2013/14 floods highlighted a number of risks across Surrey and if a flood event of a similar magnitude were to take place again in the coming years, the council’s inability to carry out work in the relevant areas owing to resource and budget constraints means that many locations would continue to suffer the same or worse economic and social damage to their communities.

It is also essential that greater protection from River Thames flooding in particular is provided for the many Surrey residents and businesses currently affected. The funding arrangements of the proposed RTS scheme present a high risk that it is unaffordable and will not be delivered.