Flood defence spending 'favours wealthy families and those in the south east'

The system used to allocate where taxpayers' money goes risks favouring richer households and parts of the country where houses prices are higher

Canoeists check out buildings in flooded York on December 31, 2015 (Getty)

Wealthy families and those in the South East are favoured in the distribution of public funds for flood defence schemes, an analysis has suggested.

The system used to allocate where taxpayers' money goes focuses on the value of assets protected, meaning it risks favouring richer households and parts of the country where houses prices are higher, an investigation by the Press Association found.

In order to secure funding, a flood protection scheme must demonstrate it delivers more in benefits than costs to implement and maintain defences. This is calculated by totaling the economic losses avoided through protecting property and infrastructure.

It includes direct damages for homes and buildings and their contents, clean-up costs, loss of agricultural production and commercial stock in addition to indirect damages, such as disruption to transport links, water, electricity or access to amenities.

To calculate losses from homes, properties are divided into 28 standard categories based on age, size and type, according to the Flood and Coastal Erosion Risk Management manual.

The cost of a given level of funding for larger properties are considered to be several time greater than for smaller homes. While, people of a higher social class, such as upper middle or middle class, in professional or managerial roles, are considered to have better quality household items than working class families, so losses from their properties are greater.

Treasury guidelines also require appraisers to place a "cap" on the value of the damages expected so they do not exceed the market value of the property - which is likely to be much higher in London and the South East than other parts of the country, meaning the losses from properties in the South East could be calculated as higher than elsewhere.

This could make a flood defence scheme that protects those homes look more attractive.

"This capping at market values creates regional distribution issues (eg houses within the M25 are significantly more expensive than comparable houses in the north of England) for which there is, at present, no official counter-mechanism," the Flood and Coastal Erosion Risk Management manual says.

The Government said each scheme is given careful consideration and the system does have measures to attempt to avoid these discrepancies, with a greater ratio of funding from Government schemes to reduce flood risk for homes in deprived areas than in wealthier areas and special appraisal methods for vulnerable households.

But critics have said the funding formula is not "fit for purpose".

Green Party MP Caroline Lucas said: "Whether you are rich or poor having your home damaged by flooding is devastating - and a postcode lottery to decide who gets protection simply isn't fair. It's simply wrong for richer areas to get more protection than poorer ones.

"The Government should urgently review this policy, and re-purpose the formula to give equal protections to people's homes, no matter what their value.

"With climate change accelerating and flooding expected to become a more regular occurrence it's crucial that the Government gets this right."

The investigation comes after concerns were raised earlier this year that the south-east of England is to receive five times more money per head for flood defences in the coming years than parts of the north which suffered some of the worst damage during a series of devastating winter storms last year.

In March, it was revealed the south-east is to receive £167 per head on new flood defence and coastal erosion schemes, a sum almost double the £92 per person earmarked for Yorkshire and the Humber, and more than five times the £30 set to be spent in the North West.

The apparent north-south divide appeared to undermine comments made by former Prime Minister David Cameron during a visit to flood-hit York in December, when he claimed the Government was spending “more per head on flood defences in the north of England than we do in the south of England”.

An Environment Agency spokesman said: "We know the devastating impact that flooding has on lives and livelihoods.

"We invest in flood defences where the risk is highest, wherever it is across the country and wherever it will benefit the most people and property.

"We give each scheme careful consideration - and this includes additional weighting for regional economic differences."

Additional reporting by Press Association