The National Infrastructure Commission is calling for a £12 billion investment in effective drainage measures to tackle surface water flooding in England and for water companies to play a key role in managing and investing in flood risk infrastructure.

A new report by the Commission - Reducing the risk of surface water flooding - says that currently around 325,000 properties in England are at high risk of surface water flooding caused by heavy rainfall – meaning there is a more than 60 per cent chance they will flood in the next 30 years. The NIF is warning that without action to both increase the capacity of pipes and sewers and capture more rainwater before it enters them, up to 295,000 more properties could be put at risk.

Stricter controls on new property developments will also be necessary to stop thousands more homes and businesses from flooding due to inadequate drainage. The report says the Government should strengthen legislation and standards to discourage new developments from connecting to existing drainage infrastructure in favour of wider uptake of sustainable systems, and review options for managing the unplanned growth of impermeable surfaces.

According to the Commission, better maintenance of existing drainage networks and expanding the use of lower cost above ground measures (such as channels and drains) should be considered before new pipes and sewers, and priority should be given to nature-based solutions such as roof gardens, drainage ponds and rain gardens.

The report is calling for an expanded role for the Environment Agency and Ofwat in overseeing the delivery of joint local plans for high risk areas, developed in partnership by local authorities and water companies.

£12 billion investment needed over 30 years in cost effective drainage infrastructure measures

According to the report, modelling carried out on behalf of the Commission indicates that investing about £12 billion over 30 years in cost effective drainage infrastructure measures could reduce the number of properties that would otherwise be at high risk of surface water flooding in 2055 by around 60 per cent.

The Commission has suggested that the indicative investment of £12 billion would come “largely from public sources and water and sewerage companies.” However, this total amount could be reduced as a result of action undertaken as a result of the 25 year £56 billion programme of water and sewerage company investment set out in the Government's Storm Overflows Discharge Reduction Plan to reduce combined sewer overflow spills published by the Government at the end of August.

The Commission comments:

“At a national level, there is a need for the Environment Agency to expand its strategic oversight role in relation to surface water flooding. It will also be vital that Ofwat enables water and sewerage companies – who own and operate underground drainage on which we will rely – to invest in solutions to address surface water flooding, including nature based drainage systems.

“This will require them to work closely with local authorities to protect the people in the areas they serve.”

“We should not let surface water flooding continue as a stealth threat. We have the means to address it – what’s largely required is impetus for a range of bodies to act, and better coordination between them.”

Some of the recommendations will require changes to current flood risk management arrangements in England – according to the Commission, it is for the Government to decide how best to make these changes.

The report sets out a series of recommendations with potentially far-reaching implications for significant additional investment including :

• Government must act to mitigate the impact of urban development on surface water flooding
• the Environment Agency should improve identification of the highest risk areas, drawing on local maps and models
• Government should set a long term target for a reduction in the number of properties at high and medium risk of surface water flooding
• Government should clarify in its strategic priorities that Ofwat should enable water and sewerage companies to invest in solutions to manage surface water flooding, including nature based solutions where appropriate
• In high risk areas, local authorities, water and sewerage companies and, where relevant, internal drainage boards, should be required to develop costed, long term, joint plans to manage surface water flooding, including local targets for risk reduction, assured by the Environment Agency with input from Ofwat
• Government should devolve public funding to upper tier local authorities in the new flood risk areas based on their level of risk

Climate change and urbanisation will put more properties at risk

The report says that climate change and urbanisation are set to put more properties at risk by 2055, including:

• an increase of around 20,000-135,000 properties in areas at high risk due to the impacts of climate change, which will increase the intensity and frequency of heavy rainfall
• an increase of around 35,000-95,000 properties due to new development putting more pressure on drainage systems.
• a further 50,000-65,000 properties may be put in areas at high risk due to unplanned increases in impermeable surfaces

Government failure to enact measures in Flood and Water Management Act 2010 to improve planning and delivery of surface water drainage in new development

The Commission is also drawing attention to the Government’s ongoing failure to enact measures set out in the Flood and Water Management Act 2010 (in response to the 2007 Pitt Review) to improve the planning and delivery of surface water drainage in new development.

Currently, new developments have a legal right to connect to existing drainage infrastructure for surface water, which can increase the volume of rainwater that flows into drainage. However, the report says the current processes do not do enough to encourage new developments to properly mitigate this impact.

The Government enacted, but did not implement, changes in Schedule 3 to the Flood and Water Management Act 2010 which included making sustainable drainage systems a legal requirement for most new developments and amending the right to connect to public sewers.

In 2022, the Government reviewed whether to implement Schedule 3 in England – a decision is still pending, the report says.

The Commission is now calling on the Government to implement Schedule 3 by the end of 2023 and update its technical standards for sustainable drainage systems.

The Environment Agency is due to publish the second National Flood Risk Assessment at the end of 2024 which will provide an updated national flood risk map based on better modelling and data.

The Commission is suggesting that the Government should consider delaying the next review of flood risk areas to 2025, to allow the Environment Agency to use the results of the second Assessment when identifying new flood risk areas. This would provide a better basis for identifying those areas at highest risk and for directing future interventions and investment, the Commission says.

Currently there is no quantifiable long term target for reducing the risk of surface water flooding - the NIF is also recommending that Government should set national flood risk reduction targets to drive and monitor progress.

Water and sewerage companies should play a key role in reducing risk and Ofwat should ensure PR24 methodology creates level playing field for below and above ground interventions

The report goes into considerable detail on the key role water and sewerage companies will play in reducing surface water flood risk by improving drainage.

The Commission is recommending that the Government should clarify in its strategic priorities for Ofwat that the water sector regulator should “enable water and sewerage companies to invest in solutions to manage surface water flooding.”

According to the report, which says that private investment from water and sewerage companies’ customer bills has largely funded below ground drainage, such as pipes and sewers, the focus of investment will also need to change.

The Commission says:

“Water and sewerage companies should continue to be encouraged to deliver both above and below ground solutions, and Ofwat should ensure its methodology for the next Price Review period in 2024 creates a level playing field for below and above ground interventions, including sustainable drainage systems.”

The report is also recommending that upper tier local authorities (the main organisations responsible for managing surface water flooding risks), water and sewerage companies and, where relevant, internal drainage boards in the new flood risk areas should develop and deliver long term, costed, joint plans, setting out local targets for flood risk reduction.

The plans should replace Local Flood Risk Management Strategies and “inform water and sewerage companies’ business plans”, the report says and should:

• set out a common vision
• identify quantifiable local targets
• assign clear roles and responsibilities
• contain a costed programme of public and private investment for the next five years.

In terms of timescale, the Environment Agency should review and assure the joint plans, with input from Ofwat and support from Regional Flood and Coastal Committees, by 2026. The plans should be completed by 2026 and revised every five years following the review of flood risk areas the year before (and also to inform) the following Ofwat Price Review.

The Commission wants to see devolved budgets initially set for the five years from 2026-2031 and communicated prior to the development of the joint plans.

"Solution is clear – reduce amount of water flowing into drains and improve drain capacity"

Localised floods across England last month alongside a series of major flooding incidents in London in 2021 – which affected 1,500 properties and disrupted healthcare and transport networks – have highlighted the risks posed by surface water flooding.

Professor Jim Hall, National Infrastructure Commissioner, said:

“It’s clear that faced with more intense rainfall and increased urbanisation, we need to start taking this type of flooding far more seriously.

“The solution is clear – reducing the amount of water flowing into drains, whilst also improving the capacity of those drains. That means stopping urban creep from increasing the amount of storm water that drainage systems have to cope with and giving nature more opportunities to hold on to excess water, as well as targeted investment to ensure sewers can cope with growing pressures.

“While sustained investment is needed, the estimated additional costs are relatively modest. At least as important is a more joined-up approach to owning and acting on the problem.”

The government is expected to respond formally to the Commission’s recommendations within 12 months at the latest, as set out in the Framework Document between HM Treasury and the Commission.

Click here to download the report in full