I would first like to thank all of those who supported local communities in the wake of the flooding in December 2015 and early January 2016. It is important that we recognise the enormous amount of effort that has gone into supporting households, businesses and communities repair and recover from these floods.
In the days that followed those storms, the Government very quickly identified that the immediate priority was to respond to the urgent needs of those affected and we have paid out almost £300 million to help householders, communities and businesses to get back on their feet. Furthermore, we have supported repairs to vital transport links, including getting the A591 in Cumbria open ahead of schedule, as well as improving flood defences and providing match funding for charity appeals.
Alongside this early response, Ministers informed the House of our intention to apply to the European Union Solidarity Fund. We submitted our initial application on 26 February 2016. The application was made within the 12 week deadline and included a provisional estimate of the cost of direct damage incurred by the floods in December 2015 and early January 2016.
The European Union Solidarity Fund is limited in principle to non-insurable damage and does not compensate for private losses, such as damage to private property. Long-term action – such as lasting reconstruction, economic redevelopment and prevention – are not eligible for support. In the case of a regional application, the Solidarity Fund retrospectively reimburses Member States for 2.5% of the direct costs associated with the damage incurred. As the assistance received is therefore dependent on the extent of the costs incurred, it has been important that we ensure the application represents our best estimate of the damage. Subsequent to the initial application, my department continued to work extensively with devolved administrations, local authorities and other government departments to refine and update our cost analysis and comply with the complex rules of the Fund. As a result of that work, the Government finalised the UK’s application to the European Union Solidarity Fund in September 2016.
The Commission has now completed its assessment of our application and has proposed to the European Parliament and Council that the UK receives a notional €60 million in assistance (subject to approval by the two bodies). However, owing to the costs involved in making an application and the effect of clawback through the UK rebate, the overall net benefit to the UK is only estimated to be €17 million (circa £15 million). This will be further offset by a payment of £14.5m that the UK is legally obliged to make to the EU in respect of the UK’s 2007 application (by then Labour Government) for Solidarity Fund assistance following the serious floods that year. The Commission carried out an assurance review in 2010 and 2011 to verify that all of the expenditure incurred was eligible. The UK Government is obliged to repay funding where there was ineligible spending under the Labour administration. Consequently, this funding does not offer additional support, but is only eligible to reimburse a small portion of the extensive financial support that has already been given by the Government to the areas affected.
The UK Government continues to stand squarely behind those flooded, working with local authorities to ensure households and businesses receive all eligible support. Furthermore, we are focused not only on ensuring the recovery from these floods, but also on preventing future damage – we are exceeding our manifesto commitment by building 1,500 new flood defence schemes that will better protect 300,000 more homes.
This statement has also been made in the House of Lords: