The Government has now confirmed that flood defence schemes will be included under the £50 billion “Guarantees” scheme outlined in the Infrastructure (Financial Assistance) Bill.
In the debate for the third reading of the Bill yesterday, Labour MP for York Central Hugh Bayley yet again sought confirmation from Sajid Javid, Economic Secretary to the Treasury, that flood defence schemes would not be excluded from the Bill despite no explicit reference to them. Mr. Bayley previously raised the issue in a debate on the Bill in September.
Mr Bayley, whose constituency suffered severe flooding in September, was keen to ensure that flood defences, though not normally deemed as “nationally significant” because of their purely regional benefits, would be subject to consideration by the Treasury.
Mr Javid replied:
“I can say again [he also responded to a comment in the Second Reading] that his local flood defences are not excluded within the definition in the Bill. In the case of projects of that nature, applications should be made under the process and they will be considered like all others.”
Mr Bayley stressed the economic benefits of flood defences. He said:
“Flood alleviation schemes, for instance, can support economic output by keeping businesses open and avoiding diverting expenditure to repairs when the funding could instead go to a future profitable investment that would generate a return.”
This statement raises an interesting point. Flood defence schemes do not offer an obvious return to the investor but the projects that are intended to be considered under the Bill are “private sector-led ones that are commercially viable and creditworthy in their own right,” according to Mr Javid.
It would be enlightening to know whether the Government has specific reasons for the view that the private sector will be interested in investing in flood defence schemes on which lives and livelihoods depend - in particular, how such schemes would be both financed and deliver an acceptable rate of return to potential investors without involving public money.
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