jcb

Monday, 25, Jan 2010 01:43

British insurers have voiced criticisms over the chancellor's pledge to spend £800 million on flood defences by 2010, saying money is needed immediately.

Environment secretary Hilary Benn announced budgets would reach at least £650 million in 2008, increasing to £700 million in 2009 and eventually reaching £800 million by 2010.

Mr Benn implied the figures were yet to be finalised, saying the conclusions of the inquiry being led by Sir Michael Pitt into the summer floods "will be taken into account" before the final allocation is determined.

Before the devastating floods this summer, the Association of British Insurers (ABI) had asked for a total of £2.25 billion to be spent on flood defences.

Even by this conservative figure, the government will be spending £100 million less than is required over three years.

Stephen Haddrill of the ABI said: "Government spending for the next three years is less than we were asking for, even before the floods.

"It does not begin to address the major issues, including drainage, which were highlighted this summer. The government will have to increase spending substantially."

The flooding this summer - which affected large parts of Yorkshire and Gloucestershire - is estimated to have cost the insurance industry £3 billion. British insurers are reconsidering offering flood protection services in light of the massive pay-outs, as it is no longer viewed to be sustainable.

Speaking to the Environment, Food and Rural Affairs Committee - which is looking at flooding - the Environment Agency chief executive yesterday added weight to claims that measures were not being implemented quickly enough.

Commenting on why the summer floods had affected some areas the country so badly, Lady Young said that the key factor was the unprecedented weather, but problems with funding were also an issue.

Ms Young said: "The issue really...is the pace at which they are being implemented.

"We need to move faster".

The Conservative party echoed these sentiments, saying "not enough was being done".

Anne McIntosh, shadow environment minister said: "While additional money is welcome, very little of it is actually going to address surface water and storm drain damage which was the cause of much of this summer's flooding.

"In addition, the fact that the extra money is not being introduced in total until 2011 shows that the government hasn't grasped the seriousness of this situation.

"Householders and the insurance industry may well be left to face the consequences of government inaction."

The Liberal Democrats went a step further, calling for flood defence spending to be raised to £1 billion, in line with the Foresight study on stabilising flooding during climate change.

Defra spokesman, Chris Huhne said: "Any short-term savings on flood defences will be swamped by enormous public liabilities in the future if the Treasury fails to fund flood defences properly.

"The government should increase flood defence spending to £1 billion in order to give households and insurers the reassurance they need."