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19.03.14

Extra funding for flood defences in the Budget

Chancellor George Osborne is expected to reveal new funding plans for repairing and improving flood defences in his Budget statement today, following the wettest winter for at least 250 years.

The money in the Budget is thought to be on top of the £130m already pledged in February to repair the defences damaged this winter, though only some will be available this year.

Ahead of the chancellor's speech at 12.30pm, Treasury sources said the government's economic plan was working but the "job was far from done".

Among tax changes expected, the amount of income people receive tax-free could be raised above £10,000. Business groups have forecast that the UK's total economic output will exceed its pre-recession peak in the second quarter of 2014, after the economy grew by 1.9% in 2013.

Other measures also predicted to be in today’s statement include a cut to bingo duty, a requirement for banks to refer businesses whose loan applications they reject to alternative lenders, and give more details of a proposed five-year cap on structural welfare spending from 2015.

The Sun newspaper also reports that that inheritance tax will no longer be levied on the estates of police officers, firefighters and ambulance crews who die in the line of duty.

Additionally, Unison, the UK’s largest union, is calling on the Chancellor to lift the pay cap on public service workers or ‘face the consequences’.

The union is demanding a fairness package for public services including a job cuts moratorium as well as a pay rise to match inflation in 2014/15.  Dave Prentis, general secretary of UNISON, said: “There is growing anger and frustration amongst UNISON members over the government’s continuing attacks on their pay. Public service workers have seen the value of their wages fall dramatically, leaving families struggling to cope with the cost of everyday essentials such as food and fuel.”

Dr Colin Brown, director of engineering at the Institution of Mechanical Engineers (IMechE), said: "The £140m announced in today’s Budget for repairs to UK flood defences is a ‘sticking plaster’ approach and simply does not go far enough. The government needs to be investing in new flood defences and ongoing maintenance projects to ensure long-term UK resilience, neither of which was mentioned by the Chancellor. Equally, there was no mention of resilience plans for other extreme weather conditions which the UK will be increasingly susceptible to in future years.

"Every £1 spent in resilience saves £4 in future relief and rebuilding costs, which is why we need to be taking a much longer-term view of UK infrastructure.

“Additionally, while we welcome the support for HS2 and regional airports and the Chancellor’s vision of seeing this beyond the current plans, we need to see more details and the Government needs to show more commitment to creating an integrated UK transport system.” 

Jon Williams, partner at PwC, also commented on the funding announced for flood defences. He said: "The Chancellor's announcement that £140m additional funding will be made available for immediate repairs to flood damaged defences is welcome, but does not plug the gap needed to ensure the UK is resilient to flooding in the medium term. Even after this additional funding, there is still an estimated £500m shortfall if we are to maintain flood defences to avoid in future the estimated £1bn of insured losses and further uninsured economic costs incurred as a result of this winters floods. This also ignores the additional investment that will be needed if we are to adapt to a changing climate. Given the current budgetary constraints, this funding in unlikely to only come from the public purse, and further ways to involve the private sector to build the infrastructure and manage flood risk, such as Flood Re, need to be developed.

"One issue that the UK will need to resolve is the tension between building houses on flood plains to relieve the housing shortage burden and the propensity of these new properties to be flooded. Currently the only incentive for these new properties to not be built is that they are not currently covered by Flood Re.

"The floods that the UK experienced over December 2013 to February this year would have been far worse if not for the investment in the past that the UK has made in its flood defences. For every £1 invested in flood defences, £8 in future flood damage is saved as well as significantly reducing the risk of loss of life from floods so the more that is invested, the lower the damage the flood will cause."

 (Image: Ben Birchall / PA Wire)

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