The Environment Agency (EA) has flagged up some key outcomes from its work during the last 12 months, including flood risk management successes and over £71 million of efficiency savings during the 2010-15 Spending Review period.

The results form part of the Environment Agency’s annual report and accounts for the year ended 31st March 2015. The report describes 2014 to 2015 as a year of change for the Environment Agency, saying that although it was spared the extreme weather events of the previous winter, the year was challenging in other ways.

During the year the Agency completed a major change programme and moved to a national and area structure. It also saw around 10% reduction in staff numbers - down from 11,400 in October 2013 to 10,235 at the end of March 2015 and reduced costs by £10 million per year. More of the Agency’s work is now being done in collaboration with others - partnering with a wide range of public and private stakeholders is described by Chairman Sir Philip Dilley as “key to our success” in his introduction to the Report, saying:

“ I am also keen that we look at how we can work with other infrastructure providers to see what opportunities there could be to pool resources.”

On flood protection, Sir Philip said the Agency had made “excellent progress” on its work with local communities in Somerset to help them recover from last year’s floods and prepare for future events, commenting:

“I very much welcomed the government’s announcement in December of a 6-year investment commitment for our capital flood risk project work. This certainty will enable us to plan ahead in a way that we couldn’t before. We are in a better position to award contracts that will lead to greater efficiencies and cost savings.”

The report highlights the Agency’s work in regulating onshore oil and gas exploration, describing this as a high profile activity. The Agency has been allocated an extra £1.5 million from the government to help with engagement work in the coming year.

Commenting on water quality, the report says that 2014 saw the best ever bathing water quality results with 414 (99.5% ) of the 416 bathing waters meeting the Bathing Water Directive mandatory standards. Although the Agency is not anticipating any deterioration of those waters, the report says the criteria have been made tougher through European Union legislation, meaning it will “have to work even harder with our partners and stakeholders if these standards are to be met in the future.” The Agency is expecting 94% compliance with the revised, more stringent directive when it is fully introduced later this year.

In October 2014 the Agency launched a consultation on its proposed updates to England’s river basin management plans which set out measures to improve the water in rivers, lakes, estuaries, coasts and in groundwater. The consultation, which ran until April 2015, contains the main issues for the water environment and information on what needs to be done to address these issues. The consultation responses are now helping the EA shape the final plans which we will be submitting to the Secretary of State and ministers for their agreement and sign off.

Performance against Spending Review 2010 targets

The report sets out the EA’s performance against the government’s Spending Review 2010 targets for each government department up to 2014 to 2015 as follows:

Objectives for the Spending Review 2010 period were to:

• reduce the risk of flooding and coastal erosion to at least 165,000 households
• achieve efficiency savings of 15% (£65.96 million)
• ensure at least 97% of Environment Agency maintained assets were in target condition
• extend flood warning coverage to at least 66% coverage in high risk areas
• create 400 hectares of intertidal habitat

By the end of the Spending Review 2010 period the EA had:

• reduced the risk of flooding and coastal erosion to 177,300 households
• achieved £71.18 million of efficiency savings
• maintained 96.6% of Environment Agency assets at their target condition
• ensured that 54.7% of properties at highest flood risk in England receive direct flood warnings
• created 506 hectares of intertidal habitat

Future improvements in flood incident management and reduced costs

Following a review of its flood risk systems in 2013 to 2014 the report says the Agency has now started a series of projects of work to improve its flood forecasting and warning services for customers and reduce costs. The projects will help the EA establish more efficient and effective IT systems, helping it to reduce its operating costs by over £1.5 million per year as a result.

In December 2014, the Agency published the largest and most ambitious programme of flood and coastal erosion improvements ever to be undertaken in England. This includes over 1,400 projects which will reduce the flood and coastal erosion risk to at least 300,000 households across the country by 2021.

The government has committed to investing £2.3 billion to reduce the risks of flooding and coastal erosion between 2015 to 2021.

In December 2014, the Agency also published its long-term investment scenarios, presenting a new analysis of the costs and benefits of flood and coastal erosion risk management in England. The study shows the effect of different levels of investment over the next 50 years to get the most cost effective reduction in risk. The study builds on and extends earlier studies, including Foresight Future Flooding from 2004 and the original long-term investment strategy from 2009. The report says the study “supports a national discussion about future investment needs to manage flood risk in the long term.”

Flood risk management plans to be published by December 2015

The Agency is also currently developing flood risk management plans (FRMPs) for each river basin district in England. Working with other risk management authorities, the plans will highlight the hazards and risks within each area of flooding from rivers, the sea, surface water, groundwater and reservoirs. The FRMPs must be produced and published by December 2015.

Environmental permitting and flood asset consenting

Throughout 2014 and 2015 the EA has also been working with Defra on proposals to bring flood asset consenting into the environmental permitting regime. The proposals simplify the regulation of activities on main rivers or sea defences affecting flood risk, such as dredging or construction of bridges and outfalls. The report says that with no regulation, these activities might damage flood structures and embankments, restrict watercourses or the operation of a flood plain, leading to flooding of other properties that might not have happened otherwise.

The EA is now making sure legislative proposals are clear and practical and are considering any adjustments it may need to make to the way it works. The Agency is aiming to put the policy and guidance in place to deliver this new regulatory approach successfully so that it is consistent with the overall Environmental Permitting framework. The government consultation to bring flood defence consenting into the Environmental Permitting regime opened in December 2014 alongside the EA consultation on standard rules for flood risk related activities. The government is considering the views expressed in the consultation.

Environmental Permitting Regulations (EPR)

In 2014 the Environment Agency also successfully defended appeals brought by 3 water companies. The appeals challenged the principles of EPR, relating to the application of management systems, notifications and reporting and use of guidance. If upheld, the report says this would have threatened the implementation of EPR for water quality and other regimes and the Agency’s overarching aims of encouraging companies to take responsibility for minimising the risks of their activities and improving their environmental performance. The EA is now working with the water companies to implement EPR for their sector Enforcement and prosecution

The report also highlights the introduction last year of an important sentencing guideline for environmental offences which uses a defendant’s turnover to help calculate a fine, meaning that larger businesses can now be fined considerably larger amounts. The guideline has already been used effectively with fines for water and sewerage companies increasing significantly, most notably Southern Water Services, recently fined £500,000, and United Utilities and Thames Water, recently fined £750,000 and £250,000 respectively, the report states.

On expenditure, capital expenditure rose from £215 million in 2013/14 to £281 million in 2014/15, attributed principally to works to repair and restore flood risk management assets following the winter flooding in 2013 to 2014.

Spend on flood and coastal erosion risk management rose to £824 million during the period, compared to £664 million in 2013/14, in contrast to a fall from £500 million to £471 million in spend on environment and business.

Click here to read the Environment Agency Annual report and accounts for the financial year 2014 to 2015 in full