The Chancellor has announced an additional £51 million to support households and businesses affected by last weekend’s devastating floods in Cumbria and Lancashire – but experts are warning that the damage caused by Storm Desmond could rise to £500 million.
Commenting on the ongoing impact of Storm Desmond, Mohammad Khan, general insurance leader at consultants PwC UK, said:
“Our current estimate of the damage caused by Storm Desmond is £400m – £500m with the insurance industry paying out between £250m and £325m. This compares to an economic cost of £275m and insurer costs of £175m in the 2009 floods. Clearly these are initial estimates as there is still uncertainty as to the number of properties and businesses affected. If the storm continues, the damage – and therefore the costs – could be significantly worse.”
As part of the new funding announced by the government, BIS has committed £5 million for businesses, with funding equivalent to £2,500 per business provided to local authorities. It is estimated that 2,000 firms may have been impacted by the floods.
Minister for Small Business Anna Soubry said:
“We are providing £5 million of quick support for businesses forced to close their doors due to the floods. Our priority is to help these hard working business owners get back on their feet, so they can open their shop doors and be back in business for Christmas.”
This takes the total support pledged by the government to over £60 million.
The government has said it will take a streamlined approach to funding to help households and business access support as quickly as possible.
The money will:
Help the people directly affected by the floods – providing Local Authorities with over £500 for each household affected;
Support people as they protect their homes against future floods by providing grants of up to £5000, so they can install new flood barriers, replace doors and windows with water resistant alternatives, or move electricity sockets up to a safer level
Ensure flood affected businesses that have had their trading disrupted can get back on their feet, with funding equivalent to £2,500 provided to Local Authorities for each business affected and funding specifically provided for farmers to help restore their land
Help Cumbria and Lancashire assess the damage to the local highway network following the events over the weekend, to allow the government to understand what additional local transport infrastructure funding could be provided to help repair roads and bridges damaged
Bring the local flood defences back up to their target conditions, with an additional £10 million invested through the Environment Agency to repair the flood defences that were damaged over the weekend
To ensure the funding is delivered quickly and efficiently, the government is creating a new Community Recovery Scheme worth nearly £40 million. The Scheme will be run by local authorities and provide targeted support on the same basis as in the floods that affected the South West and other parts of the country in 2013 to 2014.
The government has also recognised the important work by local charities in helping respond to the floods and will match the money raised in by the Cumbria Foundation’s Flood Appeal up to £1 million.
The commitment builds on the support announced by the government earlier in this week:
The Environment Secretary announced that the government has opened the Bellwin scheme for local authorities affected by floods, and that 100% of eligible costs above the threshold will be met by the government. The Bellwin scheme is administered by the Department for Communities and Local Government.
The Communities and Local Government Secretary announced business rates and council tax relief for the affected communities.
The government will apply the Barnett formula to the funding so that Devolved Administrations will receive £7.5 million. It is up to them how the money is spent.
Click here for more information on the Environment Agency’s major three-day conference and exhibition Flood and Coast 2016 which takes place from 23rd to 25th February 2016 in Telford.