9 Mar 2011

Cuts to flood defences could leave homes ‘uninsurable’

As the Government tests its flood defences, critics say cuts will leave homes without insurance. MP Diana Johnson tells Channel 4 News: “The insurance market is practically closed in Hull.”

The Government tests responses to flooding (R)

A week long flood exercise is currently under way across the UK, bringing in thousands of people from emergency services, councils and water companies. But while Exercise Watermark tests the authorities flood responses, the Government is facing criticism for its decision to cut spending on flood defences.

Under an agreement known as the statement of principles, which is due to end in 2013, insurance companies promised to provide cover for properties which are at severe risk of flooding. But the deal requires the Government to increase investment in flood defences, a promise which critics say is threatened by planned cuts.

Flood defence cuts

In February the Government announced cuts to the number of projects that recieve funding in the coming year, from 630 to 356. The cuts, adding up to an 8 per cent reduction over the next four years, will see some planned projects cancelled. This includes defences for Leeds and Morpeth in Northumberland.

Ian Crowder is insurance spokesman at AA insurance. He told Channel 4 News that if defences aren’t funded properly, the insurance industry won’t be able to provide insurance to householders:

“The agreement is being undermined. If the Government say that these cuts are not that bad then that is an inaccurate reflection of the situation. It is in our business interests to come up with a solution that protects our customers but you can’t expect insurance companies to provide cover where they know they are going to suffer considerable losses.

He says that there need to be talks between the coalition Government and insurers: “We are calling for the insurance industry to work closely with the Government to ensure communities don’t find themselves unable to get insurance. If that happens, they in turn won’t be able to get mortgages and the value of the houses will collapse.”

The insurance market is effectively closed in Hull

The floods that hit England in 2007 cost the insurance industry £3 billion in damages. Premiums have increased on properties in these areas and householders without insurance are now finding it difficult to get any cover. In Hull, one of the worst-hit areas, local MP Diana Johnson says premiums are becoming unaffordable for her constituents. She told Channel 4 News:

“The insurance market is effectively closed in Hull. If you don’t have insurance you can’t get it and premiums are going up. In 2007 there were already quite a few households who were not insured. If those people want insurance since then they couldn’t get it.”

She said that she has tried to help people struggling with insurance payments. “People contact me every time their premium payments go up. We try to negotiate with the insurance companies and have had some success with that.”

But she worries that if the Government fails in its part of the bargain, insurers will offer even less cover, leaving many households without any cover at all, saying: “In 2007 it wasn’t just the river overflowing that caused problems. The sewage system couldn’t cope with the volume of water. So we need extra capacity and the local authority has obligations to provide this, but there are cuts to those areas too. Hull Council have just agreed £67 million pounds worth of cuts. It’s frontline services versus water.”

But Environment Minister Richard Benyon said in February that front line services were being protected and funding concentrated where it will be most needed.

He said: “We have protected front line services such as forecasting, warnings and incident response and the maintenance of existing defences.” Defra has also announced details of 39 new flood and coastal defence projects in England. Schemes going ahead include a £51 million pound scheme to protect 16,000 homes and businesses on the river Trent and £10 million pounds for similar protection in Felixstowe in Suffolk.

Malcolm Tarling is a spokesman for the Association of British insurers. He told Channel 4 News that while insurers are disappointed at the reduction in spending, the agreement to provide insurance will continue until mid 2013 as planned. He said:

“The continuence after that depends on maintaining flood defences and it’s all about ensuring that you can pull off the trick of achieving the same outcomes with less money.

“The current agreement on providing insurance was only intended to be a stop gap, and we have between now and 2013 to make sure we have a system in place that manages flood risk. We want to make sure that after 2013 flood insurance remains available to as wide a group of people as possible.”

He said that Government commitment to flood defences would be looked at this summer as part of an ongoing assessment.

Operation Watermark

In Sutton on Sea, Lincolnshire, seventy residents took part in a practice evacuation on Wednesday. Since a ten-foot high storm surge killed 43 people in the area in 1953, £300 million has been spent on upgrading flood defences, with another £7 million spent each year on upkeep.

The trial evacuation, part of the largest emergency exercise ever attempted in the UK, was designed to see how emergency services and local government officials would cope and coordinate to deal with any future catastrophe. Operation Watermark was set up after the critical Pitt Review which looked at the response to the 2007 floods.

in Sutton on Sea, adults agreed to leave their homes in exchange for a free lunch, while children got a day off school and were driven to a rescue centre 12 miles inland. Most people told Channel 4 News that they supported the exercise’s aims. Although one local councillor said his wife and five other people were not evecuated, despite having volunteered to do so.

One in six properties in England and Wales is at risk from flooding, and this week’s simulated exercised have looked at the possibility of flash floods drowning London and Yorkshire, a major reservoir collapsing in Derbyshire and a tidal surge swamping the east coast.

Ian Crowder warns that this problem will only get worse, saying: “There are now a large number of floods taking place where there is no history of flooding for example in Hampshire, the Isle of Wight and parts of Cornwall. They saw flash floods where a months worth of rain fell in an hour. Because the environment is increasingly being built on, the land doesn’t have the ability to absorb extreme falls of water as it used to.

“One thing is for certain, the climate is doing strange things. We are seeing more frequent extremes of weather and evidence is building that it is to do with climate change.