by Sir James Bevan, Environment Agency Chief Executive
Most of the Environment Agency’s work is funded by government grant. Most of the rest is funded by charges to the industries we regulate for the cost of regulating them and to other customers to whom we provide services. We have now finalised our budget and spending plans for the new Financial Year (2021/22).
From the government we will receive an increased grant in FY 21/22 to reduce flood risk: a total of £883m capital (which mostly pays for fixed assets like new flood defences), and £270m “resource” (which mostly pays for people and running costs). We will use this money to step up our work to deliver the new six year £5.2bn capital investment programme to build new flood defences and better protect another 336,000 properties by 2027; to maintain our existing flood defences, prioritising the protection of lives and property; to provide planning advice to reduce flood risk; to warn and inform people when flooding threatens; and to respond to flood incidents when they occur to help protect and support communities.
We will also receive an increased government grant for our environment work: a total of £52m capital in 21/22, and around £48m resource. We will use this to invest in our water supply networks and navigation assets; monitor the state of the environment, enforce the regulations which protect it, protect water quality as far as possible with the resources we have, provide planning advice, fight waste crime, respond to environmental incidents, and deliver new tasks including in relation to EU Exit, where we have taken on several new regulatory duties. Alongside this grant funding we expect to receive around £330m in FY 21/22 for our charge-funded work, which will fund our regulation of industry and the services for which our customers pay, such as maintaining fisheries for anglers and operating river navigations for boaters.
While the overall size of the EA’s budget has increased over the last few years, the cost of what we do and the number of tasks we are required to perform has risen much faster. For example, the cost of maintaining our flood defences is rising sharply as we build more defences, as older defences come to the end of their design life, and as climate change does more damage to all of them.
As far as possible we seek to address the gap between what we are being asked to do and the money we have to do it through continuous innovation and improved efficiency. But like other public sector organisations we are having to make some difficult choices, including to reduce or stop activities for which we are not funded. For example, we are not funded to respond to all environmental incidents, so in FY 21/22 we will need to focus on those that pose significant risk to people or wildlife. We will, however, increase our regulatory activity to seek to prevent such incidents happening in the first place. And across everything the EA does, we will always do the best we can with the money we have for the people and places we serve.