Concerns Over the Effect that Flooding has had on Business in the South West

With so much rain falling on the farmland of the South West, concerns have been raised, not just about the effects on businesses and property, but also about its threat to our national food security. The NFU president, Peter Kendall said “We are seeing more of these intense extreme weather events. Climate change does now really challenge mankind’s ability to feed itself.”

However, for the people living and farming flood stricken areas the problems are more immediate and they are left wondering what assistance may be available to help them recover from the effects of flooding.

There have been many calls for compensation for householders and farmers but this can be very difficult to find. The law surrounding the responsibility for defending homes and property from flooding is complex, not least because flooding and what causes it is also complex, and many different agencies are tasked with flood management.

So if they are not going to help financially, who are the main agencies and what exactly do they do?

• The Environment Agency has responsibility for land drainage and the management of flood risk from main rivers and the sea. Main rivers are defined in law and are usually larger streams and rivers, but also include smaller watercourses of strategic drainage importance. 
• Regional Flood and Coastal Committees include Government appointees and local authority members and receive direction from the Environment Agency with regard to flood risk management.
• Internal drainage boards (IDBs) are independent bodies responsible for land drainage in areas of special drainage need, covering 1.2 million hectares of lowland England.
• Local Councils have similar powers to IDBs relating to flood prevention works on ordinary watercourses that are not within IDB areas. They are also responsible for local land use planning and need to assess whether proposed new developments may result in flooding or lead to a significantly increased flood risk. Unitary and county councils are lead local flood authorities. They must develop a local flood risk management strategy that sets out the local organisations with responsibility for flood risk in their area and produce a plan for managing flood risk. Lastly, the council may also be the highway authority and as such will have responsibility for the drainage of roads and should ensure that drains, including gullies, are maintained.

The Environment Agency, local councils and Internal Drainage Boards are all empowered to carry out land drainage or flood protection works. However, these powers are “permissive” and not duties, therefore they are not required to carry out specific works. Each body has to prioritise work on the basis of need and take action using public funds when it considers it is justified to do so. Justification is usually based on an assessment of the cost weighed against the benefit. If the organisation concerned has assessed the need for flood defence work, followed the proper procedures and relevant guidance in a timely way and then reached a decision, complaints against them are unlikely to be upheld and therefore their duty to pay compensation is very limited.

Furthermore, despite taxpayers funding all these various bodies, the primary responsibility for flood prevention rests with landowners, so again the ability to claim compensation is limited.

However, under mounting public pressure, the Government has just announced a range of new measures including a £5,000 repair grant for homeowners and businesses affected, which will top up any money received from insurers to ensure flood resilience is built into homes and businesses as they are repaired. Businesses are to be given 100 per cent business relief rate for three months and will also get an extra 3 months to pay the business taxes they owe to HMRC as they get back on their feet.

Also announced is a fund of £10 million for a one-off grants, designed to support farm businesses restore flooded agricultural land and bring it back into production as quickly as possible. The fund will also help farmers introduce flood prevention measures to help secure future production once land is restored.

The Government has also promised a total commitment of more than £750 million from the major banks to provide financial support to businesses and individuals hit by floods.

For more information on the Government’s schemes visit www.gov.uk/government/news/new-measures-to-help-communities-hit-by-flooding

Michelmores advises on all areas of agricultural law. For more information please contact Philip Wolfgang, Partner and Head of Agriculture in Exeter at phillip.wolfgang@michelmores.com or on 01392 68 7720.