Agenda item

(1)       Mr Tant explained that Defra had announced changes to the way in which the Flood Defence Grant would operate from April 2012. This would involve a new funding mechanism “Payment for Outcomes.”

(2)       The “Payment for Outcomes” mechanism would provide each scheme with funding according to the benefits that would accrue from it.  These included the number of homes protected, measures against coastal erosion and habitat creation.  If this mechanism did not result in complete funding for the scheme, there were a number of options for raising funds locally. 

(3)       Mr Tant said that the first option was the local levy, which was administered by the Southern Region Regional Flood and Coastal Committee.  All upper tier authorities in the region contributed to it. Kent’s contribution was currently £330k out of a total of £1.177m. 

(4)       The second option was the Community Infrastructure Levy (CIL), which had to directly benefit the local Council Tax payers and could not include projects in new developments, as the Government’s intention was to discourage development in flood plains.  Money raised in this way could, however, be used to fund the refurbishment of existing defences.  This was important as there were currently 86k properties in the County which benefited from them.

(5)       Mr Harrison commented on this option by saying that this could lead to a situation where local residents could pay for a project which would be carried out at the expense of more essential works.  He considered that money raised through the CIL should not be allowed to influence a project’s priority ranking. 

(6)       The third option available to local authorities was to raise the Council Tax. 

(7)       Mr Tant agreed that there were issues around IDB precept payments to the Environment Agency.  The new “Payment for Outcomes” funding mechanism encouraged cost savings as the government contribution was fixed according to the benefits of the scheme. Therefore, schemes where savings still achieved the outcomes would receive the same amount.  This was leading, for example to a saving of £15k on one project where Dover DC had carried out work instead of a contractor.

(8)       The fourth option was for upper tier authorities to raise a supplementary business rate subject to a ballot of all businesses in the affected area.  Mr Scholey asked whether businesses could vote individually on this proposal. Mr Tant agreed to investigate the workings of this option in detail.

(9)       The fifth option was Tax Increment Financing (TIF).  The Government was considering whether to introduce this scheme in 2013/14. This would enable a local authority to pay for infrastructure on the basis that the increased business revenues generated by the scheme could be used to repay that initial investment.  This scheme was currently operational in Scotland and the USA, where a number of authorities that had used this option had got into financial difficulties.  It would therefore be essential for the project in question to directly lead to growth.

(10)     The final option was for one-off charitable contributions from individuals or businesses.  These could take the form of money or land.

(11)     In discussion of this report, the Committee asked whether it could be provided by the Regional Flood Defence Committee with a list setting out all the projects in the region, together with an explanation of the process by which they were prioritised.

(12)     RESOLVED that:-

(a)               the report be noted; and

(b)               the Flood Risk Manager be requested to circulate a list of all the flood defence schemes and projects in Kent (and the South East Region), together with an explanation of the process by which they are prioritised.