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Flood defence money 'falls short' Flood defence money 'falls short'
(about 5 hours later)
Insurers say they may not be able to provide cover despite the government pledging more money for flood defences.Insurers say they may not be able to provide cover despite the government pledging more money for flood defences.
The Association of British Insurers (ABI) says the £800m promised by the chancellor is less than was needed. The Association of British Insurers says the £800m a year the chancellor has pledged by 2011 is not enough.
Head of the Environment Agency Baroness Young said the funding was a "good start" as she prepared to face MPs over the floods. Environment Secretary Hilary Benn said the £800m allocation was announced in July, and that the government "doubled the investment" in the last decade.
Parts of south-west England, the Midlands and Yorkshire were left under water during the summer.Parts of south-west England, the Midlands and Yorkshire were left under water during the summer.
Rising costs class="bodl" href="#figures">The cost of extreme weather to the insurance industry
ABI chief executive Stephen Haddrill said the money pledged by Alistair Darling in Tuesday's Comprehensive Spending Review was so low that it could lead to a review of insurance services in the UK. name="top">
"We really want to carry on being able to provide this service. But obviously we can't keep providing it at significant loss.
We are not happy but we will be working hard to get up and running these schemes which have a huge impact on the lives of local people Baroness YoungEnvironment Agency Your views - flood lessons
"So what we are going to be looking for from the government is a recognition of what happened this summer and an increase on the level they have announced today, to reflect the lessons learned and to reflect the results of their own reviews which they are now conducting," Mr Haddrill said.
On Monday, AA Insurance said home insurance costs had risen at their fastest rate since 1994 as a result of the flooding.On Monday, AA Insurance said home insurance costs had risen at their fastest rate since 1994 as a result of the flooding.
Buildings premiums jumped by 3% in the past quarter, reflecting the estimated £3bn cost of flood damage across much of the UK in June and July.Buildings premiums jumped by 3% in the past quarter, reflecting the estimated £3bn cost of flood damage across much of the UK in June and July.
Rough ride We actually announced more than the ABI was calling for at the time. The really important task is to get on with spending that Alistair DarlingChancellor class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=3656&edition=1&ttl=20071010083459">Your views - flood lessons
Meanwhile, Environment Agency chief executive Baroness Young is expected to get a rough ride later when she is questioned by MPs. ABI chief executive Stephen Haddrill said the money pledged by Alistair Darling in Tuesday's Comprehensive Spending Review was so low that it could lead to a review of insurance services in the UK.
She will be asked by the Environment, Food and Rural Affairs Committee what more could have been done to help communities. "We really want to carry on being able to provide this service. But obviously we can't keep providing it at significant loss.
They will also ask what lessons have been learned for the future. "So what we are going to be looking for from the government is a recognition of what happened this summer and an increase on the level they have announced today," Mr Haddrill said.
She told BBC Radio 4's Today programme that the money pledged was a "good start". 'Deeply unhelpful'
She said: "We are not happy but we will be working hard to get up and running these schemes which have a huge impact on the lives of local people." But Mr Benn told BBC News: "The £800m that I announced to the House of Commons on 2 July followed a call from the Association of British Insurers in June of this year for us to get to £750m.
Their funding should be planned more than three years ahead, she added. "So we actually announced more than the ABI was calling for at the time. The really important task is to get on with spending that."
"We need to start anticipating what is needed for the next 10 to 20 years." Former home secretary David Blunkett, whose Sheffield constituency was among areas badly hit by floods in June, said the ABI's comments were "deeply unhelpful".
I believe that the government don't think that this is the last knockings, as it were, that the next spending review will have to see an upward trajectory as well Baroness Young
Speaking during Prime Minister's Questions, he said: "It will lead people to conclude that the industry wishes to remove any commercial risk to their own profits and place that risk instead in the current and future policy holders."
Meanwhile, head of the Environment Agency Baroness Young said the funding was a "good start" as she prepared to face MPs over the floods.
She will be asked by the Environment, Food and Rural Affairs Committee what more could have been done to help communities and what lessons have been learned.
Baroness Young told BBC Radio 4's Today programme ministers knew the funding would have to be increased in the "future of climate change", with more money for surface water drainage and flood defences.
She said: "I believe that the government don't think that this is the last knockings, as it were, that the next spending review will have to see an upward trajectory as well."
Drainage questionsDrainage questions
BBC environment correspondent Sarah Mukherjee said the Environment Agency was told by the government it had to plan for a one-in-100-year flood event. BBC environment correspondent Sarah Mukherjee said the Environment Agency had been told by the government to plan for a one-in-100-year flood event - but the summer flooding was much worse than anticipated.
It was estimated that the summer flooding was between a one-in-150-year and a one-in-200-year event, our correspondent said.
In other words, way beyond what the agency was told by the government to build towards.
Baroness Young will say to MPs on Wednesday that it would cost the government an awful lot more money to build even more robust defences, our correspondent added.
Committee chairman Michael Jack said he and his colleagues had received an unprecedented level of submissions on the floods that left thousands homeless, tens of thousands without power and hundreds of thousands without water.Committee chairman Michael Jack said he and his colleagues had received an unprecedented level of submissions on the floods that left thousands homeless, tens of thousands without power and hundreds of thousands without water.
He says the government should have acted earlier after more extreme weather and flooding was predicted by the chief scientist in 2004.He says the government should have acted earlier after more extreme weather and flooding was predicted by the chief scientist in 2004.
"The interesting question is, why didn't the government respond then to the clear message that more resources were going to have to be put in to flood defences," he said. name="figures">

class="data416">INSURANCE COSTS OF EXTREME WEATHER

 Date Incident 2007 cost (£m)* Dec '81-Jan'82 Arctic weather/rapid thaw 630 Jan '87 Severe snow nationwide 551 15-16 Oct '87 Hurricane force winds hit SE England 2,089 Jan/Feb '90 Storms and flooding 3,370 Dec '95-Jan '96 Severe snow, Scotland and NE hit 427 Jan '05 Carlisle floods 259 Jun-Jul '07 Floods 3,000** Source: Association of British Insurers Note: * Actual cost of insurance claims paid, rounded up to 2007 figures.** Estimated figure.
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