James Heath, Chief Executive of the National Infrastructure Commission, addressed a Westminster Energy, Environment and Transport Forum event today (19 April 2022) on Priorities for water management.

James’ speech sets out the approach the Commission is taking to its ongoing study on surface water flooding, including exploring the role of governance, performance standards and investment levels. He explains that the work is intended to help inform the water sector’s current price review (PR24) and that the Commission’s findings and recommendations will be published in November 2022.

The full text of James’ speech can be found below.

My remarks today will focus on the work the Commission is currently doing – at the request of HM Treasury – to examine the best approaches to the management of surface water flooding. We are in the middle of the work right now and though we will publish our report by the end of this year, our recommendations will also form a key part of the second National Infrastructure Assessment.

As many of you will know, the NIA is a five-yearly report to government that makes recommendations – within a cost envelope – on how to address major, long term economic infrastructure challenges.

Surface water flooding is an area that the Commission hasn’t looked at before in great depth. In the first NIA – published back in summer 2018 – we made recommendations on river and coastal flooding. But at that point the data needed to assess the costs and benefits of different resilience standards for surface water flooding wasn’t available. We did however stress the importance of water companies and local authorities working together to take action on local flood risks, and we called for the development of Drainage and Wastewater Management Plans.

Since starting the study, I’ve learnt three things about surface water flooding, which will be familiar to this audience but may not be widely known outside it.

• First, surface water flooding is the single biggest source of flooding with over 3 million properties in England at risk. It can happen anywhere in the country where the drainage system is overwhelmed by rainfall – the dramatic flooding in London last summer was just one vivid example of the damage and disruption that surface water flooding can cause.
• The second thing I’ve learnt is that surface water flooding is the flood risk we know least about. This is partly because it’s a highly localised and complex risk to model. And, as government has acknowledged, the science of surface water flood mapping is not as mature as that for rivers and the sea. But the fact that the current mapping is patchy does make it harder to design solutions.
• The third thing we know is that the surface water flooding risk, if left unchecked, is only going to get worse due to a combination of more regular extreme rainfall and storms,  drainage infrastructure that is ageing and in need of maintenance or replacement, and urban development which reduces the capacity of the ground to provide natural drainage, with the potential to increase surface water run-off.

Our Surface Water Flooding study

Given the scale and shape of the surface water flooding problem, what is happening to address it?

The policy space does look crowded. Defra is examining whether to implement Schedule 3 of the Flood and Water Management Act, which would introduce more sustainable drainage systems within new construction developments. Government has a clear ambition to reduce storm overflow discharges, which I know will be on the minds of many of you right now, and the draft Drainage and Wastewater Management Plans are due out shortly.

All this activity presents challenges – for example, dealing with combined sewer overflows could eat up a lot of industry investment over the next few cycle. But there are also opportunities, if we can manage rainwater in ways that reduce both sewer overflows and surface water flooding risks.

The Commission is watching and engaging with these issues, but we want to avoid duplicating effort. We will focus on those areas where we can add the most value.

We absolutely agree that the overriding policy aim should be to deliver flood risk management that better plans for, protects, responds to and helps people recover from surface water flooding. Our study is mainly looking at the ‘plan’ and ‘protect’ elements of resilience as this is where infrastructure, whether nature-based or engineered, has the biggest role to play. But we certainly don’t think that an effective flood management strategy equals ‘protection’, full stop.

It’s not possible or indeed desirable to try and stop all surface flooding from happening. Rather surface water flooding should be treated as a tolerable risk problem, with the key policy questions being:

• First, what is the scale and frequency of surface flooding incidents that we as a society deem acceptable?
• And once we agree what these outcomes are, what are the appropriate solutions based on cost-benefit analysis?

Emerging thinking

The focus of our work is on drainage systems – both above and below ground, water company controlled and non water company controlled – and the protection they provide to property and to infrastructure services.

As I said earlier, surface water flooding is fundamentally a climate adaptation challenge – we need drainage that can cope with the increased strain. Our study is therefore exploring the drainage performance and standards we should be aiming for.

There is no absolute way of determining the right standards, of course. What is affordable and achievable will vary over time. It will require expert judgement. But without knowing what good looks like, it is hard to make intentional progress.

In terms of our scope, we are looking at measures to minimise the impact of new development: everything we build from now on should be climate resilient, or we risk making the existing problem worse. But we must also consider how best to upgrade and retrofit existing assets to reduce current risks – which, we know, will be the biggest challenge.

We are examining the potential of nature-based solutions and other ways of holding back water, particularly where they offer wider benefits than just addressing flooding – and we’ll look at whether the current regulatory model sufficiently supports these approaches.

The reality is that sometimes rainfall will beat the capacity of even upgraded drainage systems – so we will also look at ‘designing for exceedance’ and how to minimise the impact on property and vital infrastructure services of that excess.

And, finally, we are considering the specific issues and solutions for different terrains – urban, suburban, and rural.

I will finish by offering a sense of the areas where we are likely to make recommendations to government, although it’s too early to say what our actual recommendations will be.

Where we might make recommendations

Our recommendations to government will look at both short term and longer term measures in the infrastructure space:

• In the shorter term, we will try and ensure our findings help inform the process of finalising the Drainage and Wastewater Management Plans and PR24, but the timing here is clearly challenging as we are running in parallel with those processes – and we are only likely to learn more on what government intends to do about Schedule 3 in the autumn.
• For the longer term, looking out to 2050, you can expect us to say things about the importance of achievable resilience standards for surface water flooding, and recommend timelines for implementation. We will also set out what we think is the appropriate level of investment and how costs might fall between bill payers and taxpayers, in order to achieve these standards. And, finally, we will hope to make recommendations on the best mix of above and below ground solutions to provide greater resilience.

The governance of surface water flooding is another area where we are likely to make recommendations, including on how the range of different organisations working to address flood risks can best work together. At present, ownership and responsibility for constructing and maintain drainage systems does look to be quite fragmented. This leads to various challenges, including:

• The extent to which we have a shared understanding of the problem – how can we share data and knowledge more effectively between different bodies, and agree who needs to act to effect change where it is needed?
• And the lack of consistency in drainage standards across different assets and realms of responsibility is another challenge.

So our study will offer a view on whether the current governance system is fit for purpose and, if not, how should it be reformed, building on the earlier work done in this areas. And, as part of this, consider whether the different parties have the right incentives to work effectively together.

Conclusion

I’m conscious I’ve posed a lot of questions this morning – but I hope I’ve also given some indication of the areas our work is focusing on and our direction of travel.

Our research and analysis so far has been greatly assisted by the co-operation and engagement we’ve had from industry and from local authorities, including a number of people who are attending today, and we hope this can continue as we work towards developing our recommendations.

Our final report and recommendations will be published in November.