Winner of the New Statesman SPERI Prize in Political Economy 2016

Wednesday 9 December 2015

Flooding and the fiscal charter

We now know that at least one of the flood prevention schemes that was axed when spending was first cut back in 2011 was in one of the areas of the recent flooding. It always angers me when journalists of a right wing persuasion argue that the the public has not noticed any effect from austerity under the coalition. As if increasingly missed NHS targets and crises in A&E do not count, because NHS funding has been ‘protected’. In the case of flooding earlier disasters may not have been connected to austerity because hardly anyone in the media made those connections.

My impression is that the media has been a bit more inquisitive this time around. For example the BBC’s Newsnight showed a chart of actual spending, revealing clearly the cut backs from 2011. Their subsequent interview with Neil Parish, now Conservative chair of the Environment and Rural Affairs select committee, was interesting. He suggested that maybe we (his government) should be spending more money on flood defences. The reason he gave was, to an economist, compelling: the estimated rate of return on such projects is very high.

Yet this kind of logic is completely anathema to the framework in George Osborne’s fiscal charter. This has an overall budget surplus target, which includes spending on public investment. As a result, if a strong investment opportunity like this arises, it can only be funded by cutting back on other items of public expenditure, which is always politically difficult.

Ministers argue that over the next five years capital investment in flood prevention has been ‘protected’ in real terms. With the impact of climate change on extreme weather events becoming increasingly apparent, that is completely the wrong reference point. We should be substantially increasing spending on flood defences, and those schemes should not be built to specifications that are based on past weather patterns. That kind of flexible response to recent disasters is all but ruled out by the fiscal charter.


  1. As a mining engineer I was involved in the design and responsible for the construction of a wetland treatment system on a tailings dam. The design was based on a 1 in 10,000 year flood event as required by the authorities. I do not hear any mention of this level of protection in any of the flood control projects or in the evaluation of areas at risk.

  2. It takes time. There is a degree of resilience in the public sector; e.g. financial reserves, creativity, extra unpaid hours, low if any wage growth. Most people have transient, discrete and partial exposure to public services. A failure to consider financial and other costs against benefits in public expenditure represents a decline in policy rigour since the 1980s when such considerations (eg. in evaluating revenue support for public transport) were normal.

  3. See Monbiot, for why flood defences are second best option after proper land management, both environmentally, and I suspect economically.
    His session at the National parks 2015 conference was his usual tour de force, covering much of this issue.
    Question for Newsnight: what proportion of the flooding has occurred in the run off from national parks, like the Lake District?

  4. It occurs to me that sharp cutback in flood control would be in order. The result may take a while to show up, but it certainly will be clear what is important.


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