Floodcheck

1. The Environment Agency (EA) is responsible to the Secretary of State for the Environment. According to its website, the Board  (appointed by Ministers) "is directly responsible to Government Ministers for all aspects of our organisation and performance. We are accountable to Parliament through Ministers." It continues: "Ministers expect the Board to ensure that we fulfil our statutory duties, in the light of the guidance and directions which they provide, and to ensure that the organisation operates with propriety, regularity, economy, efficiency and effectiveness."
2. Defra sets the budget for England for the Environment Agency, though the Agency can also get contributions toward flood management from local authorities. The big sums here are for floods capital spending. The government is quite coy about how much it is spending compared to the last government – and compared to earlier recommendations for a rising profile of spend and  was ticked off earlier this month by the UK Statistics Agency for dubious representation of  floods capital spending in the National Infrastructure Plan (letter to John Healey MP). There is also a (declining) budget for floods maintenance. Both Defra and the Agency have in the past argued unsuccessfully for more money for flood management, pointing to the very high value for money of flood spending. But floods spending has not, until now, had the political salience of, say, transport spending. In Defra itself spending on protection from animal disease has a much, much lower return than flood spend.
3. Within that allocation, the Environment Agency decides what to spend in line with broad principles agreed with Ministers. Relative risk of damage determines what the Agency spends where. This is in turn a function of two things – how likely damage is to occur and the 'cost' of that damage – that is what drives the decision to defend lives and property rather than farmland. Ministers are kept away from those locational decisions so that they do not skew flood spending towards their own supporters. Capital (and maintenance) rationing means that a lot of 'value for money' schemes are left unfunded.
4. The Agency does have a (potentially) conflicting remit. As well as being responsible for flood management, the agency, alongside Defra’s other big quango, Natural England, has a set of wider environmental goals. Its 'principal aim' set in the 1995 Environment Act “in discharging its functions so to protect or enhance the environment, taken as a whole, as to make the contribution towards attaining the objective of achieving sustainable development”. The Environment, Food and Rural Affairs Select Committee noted the Agency was suffering from multiple responsibilities when it reviewed the Agency after 10 years, concluding: “The Agency's involvement in environmental protection and conservation has increased considerably over the past ten years. Stakeholders are concerned that the Agency is experiencing difficulties managing its wide range of responsibilities and, in particular, that it is struggling to combine its regulatory role with that of 'Champion of the Environment'." Presciently, it also noted that the Agency at that point was struggling to recruit enough flood management specialists.
5. The EA board is not a home for environmental lobbyists. Time was when the Environment Agency Board looked like a green stakeholder forum. That is no longer true. Lord Smith may chair, but there is a former Conservative MP and a Conservative local government leader also on the board.  Apart from that there are two people close to farming/land management interests (one a former chief executive of the National Farmers’ Union), two business people with utilities backgrounds, a former official who is now chair of the Yorkshire Regional Flood Defence Committee, a National Park chief executive and an environmental investment fund manager.
6. Government lacks expertise to second guess EA decisions. The Environment Agency swamps Defra in terms of size.  But Defra does not have its own hydrology or engineering experts who would be able to second guess the technical aspects of EA advice. That makes Ministers depend on advice from the Agency. Some Ministers in the past have been concerned about taking agency advice on the grounds that the Agency staff’s first loyalty is to their Board not to Ministers. This is because, despite its name, the Agency is not an executive agency but an Executive NDPB. A recent “triennial review” by Defra decided it should continue as such. Defra Ministers could have decided – as other colleagues have – to make the EA an agency and thus formally part of the department, or indeed absorb it into the department – as DWP has done with the Benefits Agency and JobCentre Plus and the Home Office has done with the UK Borders Agency. As we have argued before, this is not necessarily a panacea.
7. The Agency is “accountable”. It has been accused of being remote and arrogant – and the perceived lack of accountability of quangos is a recurrent theme among all politicians. Those running quangos themselves argue that they feel much more direct accountability than anonymous civil servants. Indeed the former Chief Executive of the Environment Agency, Baroness Young, used to argue she felt accountable to “everyone”. What is clear is that the agency has fielded far more spokespeople – from its chair to regional flood managers, than a government department ever would – where Ministers would bear the burden of communication. But, at the end of the day, Ministers are still accountable for making sure the Agency is both properly funded to meet the objectives government sets for it – and performing effectively.
8. Ministers could get rid of Chris Smith. If they wanted to, Ministers could ask Chris Smith to resign or stand down. The Board might then resign en masse given that they have come out in support of him. But they would have to explain why they no longer had confidence in his leadership of the Agency. In any case he will complete his second three year term this summer, and could not be reappointed. Although chairing EA sounds a great job on paper, it did not attract a wide field last time.  It might prove even harder to persuade someone to put their neck on the block this time.
9. Local decision-making would not necessarily be better. There is still a big network of local Internal Drainage Boards who manage local waterways. But the Environment Agency was created in 1996 to take over from the National Rivers Authority (itself created after privatisation of the water industry in 1989) and HM Inspectorate of Pollution.  The Environment Agency was designed to be able to be able to manage river catchment areas – which don’t really correspond to any local authority boundary areas and are probably the sensible unit of management for major risks. It was given a bigger national role after the review of flood management mentioned below. But there are clear issues on securing local buy-in to decisions which appear to be made remotely – and both government and EA seem to have been very slow off the mark to engage locally as the flood emergency unfolded.
10. People did see (something like) this coming. Floods have been the subject of in-depth analysis by government, engaging external expertise. The last government commissioned an early Foresight report on future flooding published in 2004 which modelled flood risk for the next 80 years; this was then updated for the Pitt review after the 2007 floods – and even then had to update the scenarios in the light of better understanding of potential extreme weather impacts after only 4 years.  Repeated assessments during the 2000s warned the UK was underinvesting in flood protection and the sums spent needed to rise.
11. Money should not be “no object”. We do need to get smarter about longer-term spending decisions. The updated analysis for the Pitt review spoke about the risk of bad decision-making in a crisis, which it described as the  ‘Outrage factor’: “After major flooding events, there is a social amplification of risk. Experts term this the ‘outrage factor’. This leads to higher expectations from the public and stakeholders as to what flood risk management levels should be provided now and in the future. Effective dialogue is required to ensure that the public and stakeholders understand the present risks and the increased risks in the future and the options that are available. This should include appreciation of the costs involved.” David Cameron’s pronouncements last week fell into this trap.   But there is a not a bottomless pit for money for flood defence.  Once the emergency is over (and adequate support is given to affected communities for recovery long after the cameras have gone away – a repeated area of weakness), the government does need to think again about how much it is willing to spend going forward – and how best to fund and spend it. As a country we are bad at making decisions on long-term infrastructure and bad at preventative spending.  Flood management has been caught in that double jeopardy.

Conclusion: Crises are great galvanisers for action – but as David Cameron’s instant commitment on spending shows - a bad time for considered decisions.  The worst weather for 250 years was bound to put existing institutions and systems under stress. Once the water subsides, we need another look at whether our systems can be improved and whether we want, as a country, to change priorities.  Simply deciding to scrap current institutions, as some have called for, with no clear idea of what else might perform better, is unlikely to be the right answer.