Economic impacts of flooding in the UK – Grantham Institute

Flooding at a retail park in Leeds during December 2015

New figures released by the Association of British Insurers (ABI) suggest that the economic losses from flood and storm damage over the last couple of months will exceed those from two years ago during the wettest winter on record.

The ABI estimates that its members will pay out about £1.3 billion for claims following a series of storms and heavy rainfall.

Calculations of the economic losses from the winter 2013-14 have been completed by the Environment Agency but have not yet been published by the Department for Environment, Food and Rural Affairs. In March 2014, the ABI indicated that insurance claims would cost £1.1 billion, including £446 million for businesses and homes that were flooded.

The bill for damage so far this winter will also exceed the estimated £600 million in losses caused by flooding in autumn 2012, but will be much less than the £3.2 billion cost (PDF) of summer floods in 2007.

The UK Climate Change Risk Assessment (PDF), which was published in 2012, concluded that losses from coastal and river flooding in England and Wales could rise from an annual average of about £1.2 billion today to between £1.6 and £6.8 billion by the 2050s.

Cause of the recent floods

The floods in northern England and parts of Scotland over the past couple of months have been caused by record rainfall. Last month was not just the wettest December for the UK since Met Office records began in 1910, but the wettest calendar month of any year. Rainfall was well above average, by two to four times, in the west and north of the UK, but close to average over much of central and southern England.

By contrast, in winter 2013-14, much of Scotland and south-east England received rainfall amounts that were double the long-term average, with the most significant flooding in the Somerset Levels and Thames valley.

UK_annual_temperature_rainfall_largeView larger version of this chart

The journal ‘Hydrology and Earth System Sciences’ published a paper by Geert Jan van Oldenborgh and co-authors which concluded that the heavy rainfall which fell on northern England and Scotland during Storm Desmond between 4 and 6 December 2015 had been made 40 per cent more likely by climate change.

This record rainfall is part of a pattern, with six of the seven wettest years (TXT) on record in the UK all having occurred from 2000 onwards. Over the same period, the UK has experienced its eight warmest years (TXT). It is clear that climate change is making the UK warmer and wetter.

The Met Office has warned (PDF): “There is evidence to suggest that the character of UK rainfall has changed, with days of very heavy rain becoming more frequent. What in the 1960s and 1970s might have been a 1 in 125 day event is now more likely a 1 in 85 day event.”

A study by Dr Mari Jones and co-authors in 2012 concluded (PDF) that spring and autumn extreme rainfall events have increased in the UK, and longer duration rainfall events in summer and winter have increased in intensity.

Managing UK flood risks

There are three main sources of flood risk in the UK: coastal, river and surface water. Climate change tends to increase the risk of coastal flooding due to sea level rise, and to increase the risk of river and surface water flooding through heavier and more frequent rainfall events. The UK Climate Change Risk Assessment (PDF) estimated that about 6 million residential and non-residential properties in the UK are exposed to some level of risk of coastal, river or surface water flooding.

It has been suggested that the risk could be limited by preventing any further development on floodplains. However, this is not feasible as coastal and river floodplains cover large parts of the UK, and many of its cities and towns, including London, are built on floodplains.

However, flood risks can be managed in a number of other ways, for instance by restricting development in the areas of highest flood risk, by building and maintaining flood defences, by improving drainage, and by designing buildings to be ‘flood-resistant’ (ie buildings that suffer minimum damage when they are flooded).

Many businesses and households also manage the risk of losses due to flooding through insurance. The UK is different from most other countries because flood insurance is widely available. There has been a tradition for the premiums for flood insurance for households in the highest risk areas to be implicitly subsidised by other policy-holders. In 2016, a new scheme, Flood Re, will be introduced to explicitly provide these subsidies for homes built before 2009, with the aim of phasing them out within 20 to 25 years. When the UK Department for Environment, Food and Rural Affairs initially proposed the scheme, it did not take into account the impact of climate change (PDF) on flood risk.

In its annual progress report to Parliament (PDF) in June 2015, the Committee on Climate Change pointed out that the UK Government’s investments in flood defences were insufficient to take account of the impacts of climate change and other factors. It stated: “Over the last four years there has been underinvestment in flood and coastal risk management in England, totalling more than £200 million. Due to this underinvestment, expected annual flood damage will be higher now than it was in 2010.”

The Committee recommended that the Government should develop a strategy to address the increasing number of homes in areas of high flood risk, with the ‘Flood Re’ subsidised flood insurance scheme playing a central role”. However, in its response (PDF) in October 2015, the Government rejected this advice on the grounds that it “would not be appropriate at this time”.

Following the flooding caused by Storm Desmond, the Secretary of State for Environment, Food and Rural Affairs, Elizabeth Truss, announced the creation of a National Flood Resilience Review to “better protect the country from future flooding and increasingly extreme weather events”. The results of the review are due to be published in summer 2016.

UK Government response to flooding must protect the most vulnerable – Joseph Rowntree Foundation

Flood risk management policy must consider how social and economic disadvantage affects people’s ability to cope with flooding, argues Katharine Knox.

The recent extreme flooding in York, where the Joseph Rowntree Foundation is based, has amplified our concerns about the adequacy of current flood risk management and how well protected the most vulnerable are from the impacts of extreme weather.

In the east of York, the floods have devastated over 300 homes, including a Traveller site. As homeowners, campaigners and politicians look at what can be done to prevent damage in the future, it’s vital that we consider how social vulnerability affects people’s ability to cope with floods.

The Yorkshire and Humber region is one of the areas with highest vulnerability to flooding nationally. High levels of social or economic disadvantage mean that residents are likely to need greater protection from flooding.

River and coastal flood disadvantage

In 2015 JRF published an analysis of national flood investment which looked at the relationship between flood investment and communities that may be most disadvantaged by flooding in England due to experiencing both high exposure to flood risks and also high social vulnerability. The most socially vulnerable include people who:

  • will be more deeply affected by flooding, including older people or people in poor health;
  • face increased exposure due to their physical environment such as living in basement or ground floor flats, areas with no green space to absorb surface water run off or mobile homes;
  • are on low incomes and might struggle to recover from the damage.

National flood policy must take into account groups of people who are at further disadvantage due to their socio-economic circumstances and physical environment. Resources need to be allocated according to the most flood disadvantaged neighbourhoods. However our report found that only 100 of the 1,493 planned flood investment schemes currently in the pipeline are in the 249 neighbourhoods with the highest exposure to flood risk and the most social vulnerability. The average planned expenditure per local authority per household protected was £6,610, but some areas with fewer flood disadvantaged neighbourhoods were due to receive much higher spending than those with a greater number.

Of course there are complexities here about the location of defences in relation to areas protected and the varying costs of defences. The Government now has the opportunity to use the national flood resilience review, to consider whether its current approach to flood investment adequately addresses issues of social vulnerability or wider deprivation, or whether a minimum standard of protection is needed for the most disadvantaged neighbourhoods in the UK.

As climate change makes severe floods more likely, flood planning needs to better account for extreme weather, rather than viewing it as an ‘unprecedented’ phenomenon. JRF will be conducting new research in 2016 to examine which communities may be at greatest risk across the UK, the social vulnerability of these communities and the adequacy of existing responses. We hope that this work will inform future national and local responses and enable us to build our resilience to flooding and protect those in greatest need. The Government’s review of flood resilience should follow the same principles.