News In Depth
No deal yet on flood insurance
Flood-hit communities will continue to get Government support but will have to wait a while longer for a deal to be done on affordable insurance cover, the Environment Secretary has said.
Owen Paterson, who was touring flood defences in Worcestershire, praised the response of emergency services and the Environment Agency for reacting "heroically" to recent national flooding triggered by the wettest year on record.
He said the Government had already committed to funding schemes protecting about 145,000 homes, and was putting more money into defences.
"Over the spending review period (to 2015) we had already pledged £2.71 billion and on top of that the Chancellor already announced in his Autumn Statement a further £120 million to protect a further 60,000 homes," he said.
Mr Paterson also said partnership schemes had raised another £72 million from the private sector.
However, he said there has been no deal done yet with the Association of British Insurers (ABI) over the issue of affordable flood insurance for householders in areas of high risk.
Negotiations have been going on since last year to replace the current agreement, known as the Statement of Principles - which ends in July - but so far the Government and the ABI have been unable to come to terms.
Mr Paterson said his colleague, Oliver Letwin, a Cabinet Office minister, met the director-general of the ABI before Christmas, "and we await them coming back to us with a constructive proposal".
He added he was "not going to negotiate in public" but said the Government wanted "a system which is better, comprehensive, and which is affordable and does not burden the taxpayer".
Mr Paterson said making flood insurance affordable was "a huge and complex problem" and he would not set a date for the conclusion of talks.
"We are confident we can reach a resolution," he said.
He made the comments during a tour of the £4.4 million flood defences at Upton-upon-Severn, which has flooded 70 times since 1970.
The defences have worked in recent weeks, keeping back the waters of the Severn, preventing 3,000 residents from becoming all but cut off, and protecting 64 homes and businesses.
Mr Paterson said the defences were a "brilliant" example of how investing in defences could benefit flood-hit communities.
In Upton's case he said the defences had effectively paid for themselves twice over since opening in July 2012, in the amount of money saved from insurance claims.
Resident Grahame Bunn, who runs Upton's Anchor pub, said the defences, consisting of a riverside water-tight barrier and a series of gates, had "saved the future of the town".
ABI spokesman Malcolm Tarling said: "We continue to be in talks with the Government about how we could come up with a solution to see that flood insurance remains affordable and available to people at high risk.
"We've put forward to the Government a scheme that we believe achieves that, through a levy on every household, on the basis that these days anyone can be affected by flooding.
"We are discussing the practicalities of that scheme at the moment.
"We're aware of the urgency of this matter because the current agreement runs out at the end of June.
"We cannot guarantee a solution and if no solution is agreed it will be a free market, but we are 100% committed to working with the Government to come up with a solution.
"The Government has to play its part - in no other part of the world is flood insurance provided without some form of government involvement.
"The current agreement was put in place in 2000, and was at the time only supposed to be a temporary measure."
The £120 million of funding - the first tranche of which will be released in the coming financial year - is split equally, with half going towards major flood defences that protect infrastructure, homes and businesses.
The other £60 million is being allocated through a partnership fund which allows businesses, councils and developers to pay towards some of the costs of defences.
About 20 new schemes are already going ahead this year, in locations including Manchester, Louth and Warrington, said Pete Fox, the Environment Agency's head of strategy and investment.
He said the additional government money would be allocated on a "case-by-case basis" and areas would need to bid for the cash.
"We go to an area and look at the causes of flooding and then look to see if solutions can be provided for those causes," he said.
"If councils want to go it alone we can offer them support, but it's a national pot of money and they'll be participating against everyone else for it."
Between 7,500 and 8,000 households have been flooded since July, culminating in the major flooding over Christmas and New Year.
Mr Fox also said about 100,000 homes had been protected from incidences of flooding over the same period because of the construction of more defences, better weather forecasting, and closer working between the emergency services, councils and the agency, sparked by the huge floods of summer 2007.
what do you think?
And the cost will be paid for by - Yes you have it, all those who chose not to buy the house that has flooded every 10 years since built, next to the river with the fantastic view, but purchase the safe boring house on the estate
Lesson learned at least, hopefully - maybe now we'll stop building on unsuitable land and now the water's coming further in, we should do likewise. Hasn't a new, possibly half-built or newly built, development just been flooded out? I saw that on some news programme. It must have been planned by a real buffoon. I live on an island and in a house on a hill - I suppose people here learned generations ago not to build too near the water.