Budget 2016: Flood defences

Today, Wednesday 16th March 2016 the Chancellor of the Exchequer gave his Budget to Parliament. Below are four paragraphs from the Budget Report which highlight new measures relating to investment in flood risk management.


1.242 Many communities experienced the devastating impacts of flooding this winter, with homes and businesses destroyed. On top of the government’s £2.3 billion capital programme, which will invest in over 1,500 flood defence schemes across the country, Budget 2016 announces an additional boost to spending on flood defence and resilience of over £700 million by 2020-21. The government will increase maintenance expenditure in England by £40 million per year, and deliver even more flood defence schemes – including investing over £150 million in Leeds, York, Calder Valley, Carlisle and wider Cumbria. This increase in investment will be funded by a rise in the standard rate of Insurance Premium Tax by 0.5 percentage points.

How the additional £700 million will be spent

1.301 Many communities in the North were badly affected by flooding this winter. As part of the government’s £700 million boost to flood defence and resilience spending, £150 million will be invested in flood defence schemes in Leeds, Cumbria, Calder Valley and York, which will better protect 7,400 properties. The government will also invest up to £25 million in flood defences in Carlisle once the Environment Agency has concluded a review of its needs, and will provide funding to support delivery of the final phase of the Leeds Flood Alleviation Scheme in later years subject to business case approval.

Repairing transport infrastructure

1.302 On top of the £49 million already committed to repair transport infrastructure damaged by Storms Desmond and Eva, a further £130 million will be spent repairing roads and bridges in Cumbria, West Yorkshire, Northumberland, Greater Manchester, Durham and North Yorkshire. This funding will enable repairs to the Ovingham Bridge in Northumberland, the Linton Bridge in Leeds, Scout Road in Calderdale and the A646 near Mytholmroyd.

Increase in Insurance Premium Tax to fund further investment in flood defence

1.205 In order to fund increased investment in flood defence and resilience, the standard rate of Insurance Premium Tax (IPT) will be increased from 9.5% to 10%. This ensures that the impact of the rate increase is spread broadly across the entire general insurance industry. IPT is a tax on insurers. However, if they do pass the cost of this rate increase on to their business and household customers, the average combined home and contents insurance would only increase by £1, and the average motor insurance premium by £2 per year. All the revenue raised from this increase in IPT will be invested in flood defence and resilience measures.

More information

Further information about the Budget 2016 can be found at: www.gov.uk/government/topical-events/budget-2016