BIBA response to consultation on Defra policy statement on appraisal for flood and coastal erosion risk management

31st October 2008

The British Insurance Brokers’ Association (BIBA) is the UK’s leading general insurance intermediary organisation. We represent the interests of insurance brokers, intermediaries and their customers.

BIBA represents 2,300 insurance intermediaries including 98 of the UK’s top 100 insurance intermediaries. Our members handle about half the value of all UK home, contents, motor, travel, commercial and industrial insurance policies. Independent insurance intermediaries distribute nearly two-thirds of all UK non-marine general insurance, of which BIBA members account for more than 80%. They also introduce £20 billion of premium income into London’s insurance market each year.

BIBA is pleased to have the opportunity to respond to the consultation on Defra policy statement on appraisal for flood and costal erosion risk management.

Our responses to the 19 questions set out are as follows:

Section 1: Introduction and Background

Q1. Does the text clearly explain the context and purpose of the policy statement and if not what additional information should be provided?

A1.  Yes

Section 1.3: Sustainable Development

Q2. Does the text provide adequate explanation of how sustainable development should be embedded in appraisal for flood and coastal erosion risk management? Are there any other aspects of sustainable development that should be included in the policy statement?

A2.  The “do nothing” approach is a concern. It could be all too easy for this approach to be adopted; it must only be used as a last resort.  

Q3. Do you feel that the approaches we promote, a strategic and holistic approach, long term whole life design supported by a broad portfolio of structural and non structural solutions will result in more viable sustainable solutions being identified?

A3.  Yes.

Section 2: Risk Based Approach
Q4. The policy statement sets the context for managing flooding and coastal erosion within a risk based approach. This means that risks are assessed on the basis of both the probability of flooding and the scale of consequence and that areas of higher risk are therefore more likely to justify risk management actions. Does the text adequately explain how this should be taken into account in appraisal? If not do you have any suggestions for improvements?

A4.   Yes.

Section 3: Strategic Framework
Q5. The policy statement reflects the planning framework consisting of high level catchment flood management plans and shoreline management plans considering all types of flooding risk. More detailed plans would be developed beneath these where necessary to manage local flooding and coastal erosion. This framework has been developing over recent years although is not yet complete. Do you consider that the text provides sufficient policy guidance on the role of appraisal in this system?

A5.   No, we need to have a better understanding of Shoreline Management Plans (SMP’s) and Catchment Flood Management Plans (CFMP’s) as these are not explained in detail. Is DEFRA suggesting flooding of areas of land?  If so, we disagree with their approach. 

Q6. The policy statement promotes the use of appraisal principles at each stage in the framework to determine the most appropriate approach to risk management. The purpose of high level plans such as CFMPs and SMPs is to provide a strategic view of risks and management requirements across large areas over which flooding and coastal erosion processes operate. Smaller scale plans then develop proposals for managing these requirements locally. We expect appraisal at each stage to be carried out at an appropriate level of detail necessary to inform the choices to be made mindful of the need to ensure that overall the process is streamlined and not repetitive. Do you agree that different levels of detail are necessary and that this approach is workable? If not, what would you suggest?

A6.  Yes 

Q7. The European Directive on the Assessment and Management of Flood Risk establishes a requirement for Flood Risk Management Plans to be prepared for all areas where there is significant flood risk and for all forms of flooding. These plans have to be in place from Dec 2015. Do you think that CFMPs and SMPs should be identified as plans to fulfill this requirement? Smaller scale plans for different types of flooding would be identified and prioritised as measures under these plans for further development.

A7.  Yes.  However, December 2015 is too late for many areas. The cost of major flood events before this date could be significantly high, possibly in the billions, and we request the plans are brought forward. We believe it could be cheaper in the long run if we act now.

Section 4: Principles for Appraisal
Q8. Does the policy statement provide sufficient guidance for operating authorities and at the right level, to ensure that government expectations for effective and consistent appraisal will be undertaken?

A8.  BIBA does not feel able to comment – this issue is more appropriate for the operating authorities.

Q9. Does the policy statement provide sufficient information and explanation for stakeholders to understand what the government expectation is of operating authorities to undertake effective and consistent appraisal?

A9.   BIBA believes this is a useful starting point.  We would need to see further details later on.

Q10. Are there any other good principles of appraisal that you think the policy statement should either give greater emphasis to or has not addressed?

A10.   Not at this stage.

Q11. The use of indicative standards of protection (IS) were recommended in  FCDPAG3 as an aid to authorities to help in establishing a range of 11 options although they did not represent any entitlement to protection or a minimum level to be achieved. The suite of outcome measures and targets now largely replace the role of IS and better reflect a risk based approach. At the consultation events in 2007 there was not a clear consensus on whether in view of the introduction of outcome measures and target there was no longer a role for indicative standards or something similar. Do you believe that indicative standards should be retained in some form and if so what functions should they have?

A11.   BIBA does not wish to comment on this issue.

Section 5: Decision Making
Q12. Do you consider that the policy statement promotes an effective approach to selecting the preferred option for risk management?

A12.   Yes.

Section 6: Public Consultation, Governance and Scrutiny
Q13. Do you consider that the approach proposed in the policy statement will facilitate public consultation and engagement?

A13.   We expect and hope this to be the case.

Q14. Do you think that the arrangements for governance and scrutiny of appraisal and decision making will be effective?

A14.  Yes. It is difficult for BIBA to pre-judge this – but we would hope that the new arrangements will prove effective.

Section 7: Legislative requirements and synergy with other government policy
Q15. Does the policy statement address the main legislative areas that are relevant to appraisal or are there any other areas that you feel should be identified here?

A15.  We have no reason not to believe this

Q16. Are there other aspects of government policy that should be highlighted as having particular relevance to Flooding and Coastal Erosion risk management?

A16.  BIBA feel that it is important that Government policy follows issues such as maintenance of drains, culvert and drainage of surface water. These should be included as relevant, ensuring there is proper focus on these areas.

Section 8: Additional policy on particular aspects of valuation
Q17. Are there other aspects of valuing benefits and costs where more policy guidance should be provided?

A17.  Yes, BIBA are seriously concerned at the government neglecting coastal defences which could prevent people from being able to obtain adequate insurance protection.

Other questions and invitation to make general comments
Q18. In the 2005 ‘Making Space for Water’ Government response it was identified that Defra and the Agency would produce summary versions that explained appraisal policy and practice in a more accessible way for stakeholders and the general public – this was in comparison to the existing guidance Flood and Coastal Defence Project Appraisal Guidance Volumes 1-5 (FCDPAG). To what extent do you feel that the new format of the Policy Statement for Appraisal addresses this aim?

A18.  The new format is satisfactory.

Q19. Are there comments or suggestions you wish to make on any other aspects of the proposed Policy Statement?

A19.  Yes.  The timeframe should be brought forward and the Policy Statement should encourage a joined up approach.

BIBA believe these issues are of great importance to the insurance industry. BIBA will, on behalf of its members, continue to promote the availability of flood insurance through its expert members who have a wealth of knowledge and experience.

BIBA would request that they be included on any further Defra consultation papers or communications in respect of this subject going forwards.

Thank you for taking the time to consider our response. If you have any further queries please contact Graeme Trudgill, BIBA’s Technical and Corporate Affairs Executive for further information on 02073970218 or or Steve Foulsham, BIBA’s Technical Service Manager on 02073970234 or .

Yours sincerely

Eric Galbraith
Chief Executive

Direct Tel:  020 7397 0201
Direct Fax: 020 7626 9676