Political expedience at the cost of resilience

ICE’s submission to the 2015 Budget sets out clear objectives for infrastructure policy.

ICE President David Balmforth
ICE President David Balmforth

ICE's submission to the 2015 Budget sets out clear objectives for infrastructure policy. By 2020 Government and Industry should aim to:

  • Maximise infrastructure's contribution to improved productivity and higher economic growth
  • Build resilience into the UK's infrastructure networks so that they are fit to face future challenges.

On the journey to achieving these we will need to:

  • Create a long-term infrastructure decision-making framework
  • Secure a world class engineering workforce that can drive innovation and productivity
  • Develop Infrastructure Network Performance Metrics
  • Accelerate the devolution of power and resources for developing high performing infrastructure.

We have achieved much in the last five years, but what will success look like by 2020? The Budget and autumn Spending Review provide the Government and industry with early opportunities to shape the journey to success.

One area of importance that I have been keen to highlight during my Presidency is flood risk management and its impact on resilience. 5.2million properties are at risk of flooding in England alone, with annual flood damage costs in the region of £1.1billion. It has been estimated that maintaining existing levels of flood defence would require flood defence spending to increase to over £1billion per year by 2035.

This is not just about building more. We must maintain our existing defences. Maintenance funding is still only allocated annually and we need a longer term investment programme that matches the six year "commitment" made to investing in new flood infrastructure.

I use the term "commitment" loosely, because the 6 year £2.3bn capital investment plan is not locked in and is therefore vulnerable to cuts in the Spending Review.

We must also understand that Government investment only part funds flood defence schemes. Partnership Funding requires Local Authorities to generate the additional investment either from their own budgets or other sources. However, this has proved difficult for most authorities as they lack the necessary skills - in fact, only 25% is coming directly from private contributions.

This means they are forced to plug the gap and find the other 75% from within their already stretched budgets. Based on the current situation, this is unsustainable, as Local Authorities have shouldered heavy spending cuts while at the same time facing increased cost pressures in areas such as social care.

Equipping Local Authorities so they can raise more partnership funding and do more to help communities build their resilience to flooding, is part of the answer. However, this also hangs on the fate of the 6 year £2.3bn capital investment plan. Local Authorities and supply chains rely on the certainty of this centralised investment in leveraging private investment and a reduction in the Spending Review will further impede their efforts.

When pubic spending is tight, we know tough decisions must be made. But should protecting communities from flooding hang in the balance in a Spending Review? At ICE, we believe fundamental change is needed in how we view flood management, and our concerns are shared by many others. I hope government heeds our advice later this year.