Local Government Finance

Miss McIntosh
To ask the Secretary of State for Communities and Local Government what estimate he has made of the shortfall in local authority funding following recovery operations after the floods of summer 2007; and whether he plans to make up the shortfall from central Government funds.

Ms Rosie Winterton
As at June 2008, it was estimated that local authorities had spent £224 million on the response to and recovery from the summer 2007 floods. This total includes insurable costs.

Government made available a comprehensive package of over £136 million to assist the affected regions and help those in greatest need, including funding for schools, transport and businesses.

The Bellwin scheme was activated nationwide, for all authorities affected by the June and July 2007 floods. The schemes announced by the Prime Minister were among the most generous ever, with an extension of the period for which local authorities are eligible to claim from two months to six months and an increase in the proportion of costs local authorities could claim to 100 per cent. (instead of the usual 85 per cent.), once they spent above their usual threshold (0.2 per cent. of their revenue budget). Around £19 million was paid out through this scheme.

In addition, we exceptionally made available Flood Recovery Grant of £18.4 million to support the work of the hardest hit local authorities in helping these people in their communities in greatest need and, in July 2008, £30.6 million was allocated under the Restoration Fund to support their continued efforts to rebuild their communities. The Department for Children, Schools and Families also made £13.5 million available for schools and children’s services affected by the floods.

Local authorities are expected to meet some of the costs of flooding by claiming on their insurance policies, reprioritising their budgets, and using their reserves, if necessary. Every local authority is required to maintain reserves, one of the main purposes of which is to meet unexpected costs.