How the Flood and Water Management Act affects you

The Flood and Water Management Act 2010 was passed in April 2010. The first three commencement orders for the Act took effect in October 2010. The changes mean more responsibility for Local Authorities (LAs) and subsequently a need to review risk management strategies. 
 
The Comprehensive Spending Review in October 2010 promised the coalition government would provide £2 billion for flood and coastal erosion risk management from 2011 to 2015. The previous government had promised £2.5 billion from 2008 to 2011, which represents a 30 per cent reduction. “The repercussions will be a similar situation to Building Schools for the Future (BSF),” explains Larry Stokes, Property Underwriting Manager, Zurich Municipal. “The flood defence schemes that have started will finish, but there will be difficulty starting new flood defence schemes over the next few years.”

Funding
Defra has recently consulted on proposals to change the formula for prioritising and funding flood defence schemes. Government is committed to funding all net new burdens on LAs resulting from the Act, but funding for LA flood management responsibilities will no longer be ring-fenced. LAs will have to allocate funds for surface water flooding and produce a surface water management plan. Larry says: “Although about three-quarters have done that, a quarter of LAs are yet to produce a plan.” 

Responsibilities of lead local flood authorities
The Act enables lead local flood authorities (unitary authorities and county councils, which issue Local Flood Risk Management Strategies for surface water run-off, groundwater and non-main rivers) to delegate flood or coastal erosion functions to another risk management authority. Lead flood authorities have to develop, maintain and monitor a strategy for local flood risk management and this strategy must be consistent with the national flood and coastal erosion risk management strategy. LAs will take over planning and approval of sustainable drainage systems (SUDS), but as we go to press national standards and guidance for SUDS design and approval are still pending.

The Act enables partnerships to be formed by the lead local flood authority and other relevant authorities (county or unitary councils, internal drainage boards, highways authorities and water companies) but it does not say what local arrangements should look like. LAs have a power to request information from other bodies with respect to flood risk management and can serve an enforcement notice if the request is not complied with. A financial penalty can be imposed if the information is not forthcoming within a certain time.

If a flood occurs, the lead local flood authority must investigate whether the relevant flood risk management functions have been exercised, publish the results of its investigation and notify any relevant risk management authorities. Lead local authorities also have a duty to maintain a register of structures and features that could have a significant effect on a flood risk in its area, detailing ownership and state of repair. This register must be available for inspection by the Secretary of State.

Implications for LAs
“We’ve had many years of underinvestment, so spending on flood defences is already underresourced,” says Larry. “Many proposals in the Act require funding, so there needs to be adequate spending at government level.”
Property insurance is impacted by the Act but it comes down to an LA’s risk appetite. Larry: “Quite a few LAs do not insure for flood. It’s the smaller LAs that usually do.” The liability risk to LAs is additional responsibilities for surface water flooding. LAs will need to be aware of whether their activities, or inactivities, produce extra liabilities. Concludes Larry: “It is a good Act, but it is dependent on government putting in place the regulatory powers to achieve it, and providing resources to LAs so they can carry out their responsibilities.”


To find out more from Zurich Municipal, contact your risk and insurance consultant or email:
info@zurichmunicipal.com

As featured in the Spring issue of News & Views