Exclusive: Increased water bills could pay for flood protection

Yorkshire Water wants talks with the Government to discuss taking more responsibility for flood prevention after three major schemes in the region were shelved with memories of the devastating 2007 floods still fresh.

If Ministers agree, it could mean the company buying flood defences from the Government or building extra ones – allowing better defences to be built despite Whitehall budgets being cut, although customers would foot the cost through higher bills.

Yorkshire has been particularly badly hit as capital spending on flood defences is cut by 27 per cent next year putting schemes in Leeds, Thirsk and York on hold.

Yorkshire Water’s chief executive, Richard Flint, said there should continue to be a partnership with councils and the Environment Agency, but added: “We’re now hearing some very real concerns around the announced reduction in funding for flood alleviation projects in the Yorkshire, which could potentially put important work at risk.

“With this in mind, we’re looking at how we might be able to support the Government at this difficult time and play a bigger role by taking on more responsibility for furthering the region’s flood defences and ensuring that momentum is maintained and the great progress made so far continues well into the future.”

Ministers have already suggested the cost of building some new defences should be shared between the state and home-owners or businesses which will benefit from them, sparking suggestions of a “flood tax” where local communities would contribute towards defences in their area.

But York Central MP Hugh Bayley said Yorkshire Water had made a “pitch” to him that it could buy flood defence infrastructure from the Government, and said the idea was worth examining.

Although he admitted it would lead to increases in bills, he said it could be a fairer way of funding better protection because it would spread the cost more widely, rather than charging one community for defences which would also protect people further downstream. Bill increases would also be limited because the costs would be spread across 4.3 million customers, and it is likely there would still have to be some direct Government funding.

Mr Bayley said sharing funding over the whole water area would be fairer and simpler than getting councils to agree which should pay what for new defences.

“You would need [industry regulator] Ofwat to regulate how much the water companies allocated to flood defences and over what period they recharged that to customers to make sure if was a cost-effective way of paying, but it shouldn’t cost more than paying through national taxation or paying through council tax.”

Yorkshire Water would not give details of exactly what powers it would like, but it is keen to discuss options with the Government.

Ministers are currently considering the responses to a consultation on future floods funding. In it, Environment Secretary Caroline Spelman admitted costs of managing flood risks are expected to rise but there was a limit to “what we can expect the taxpayer to pay”.

A spokeswoman for the Department of Environment, Food and Rural Affairs said it was still considering ways to fund future flood defences. “We see water companies as having an important part to play in the development and implementation of local flood risk management plans but have no plans for water companies to take over the building and operation of flood defences.”