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UK economy hit by £600m flooding costs

From Property Talk Live on December 9, 2013

One year on from some of the worst flooding in 2012, latest research by the Environment Agency reveals that last year’s record-breaking wet year in England could have cost the UK economy close to £600million.

The overall financial cost to businesses of the extreme weather was up to £200million as total commercial property and contents damage totalled up to £84million, and further indirect impacts – such as staff working days lost – hit companies and local economies for up to £33million.

The latest assessment on the financial cost of the 2012 floods reveal that every affected business was setback an average £60,000 but flood defences protected 200,000 properties – worth up to £1.7billion to the UK economy.

In England and Wales, 175,000 businesses are at risk of flooding and, in a recent survey, 1 in 5 members of the Federation of Small Businesses said flooding had had a negative impact on their company over the past 12 months.

The Environment Agency, as part of its annual Flood Awareness Campaign, is urging businesses to sign up to receive flood warnings and make a flood plan so they are well prepared for periods of extreme weather.

Disruption caused by flooding to transport, communications and utility links in 2012 is estimated to have cost the economy a further £82million. It caused widespread disruption across the South West.

In Somerset there were nearly 300 properties reported as having been flooded and 1000 acres of farmland were under water for months on the Somerset Moors and Levels.

The flooding had a significant impact on landowners, the environment and the local economy. A report by Somerset County Council estimates the financial costs of the flooding to the local economy at £7.1million.

In the face of more extreme weather businesses are increasingly coming forward to contribute to local flood defences that would otherwise not get full government funding.

Since 2011, the partnership funding initiative has attracted nearly £150m of external funding for flood defences, on top of Government’s £2.3billion investment.

South West Director of the Environment Agency, Richard Cresswell said: ‘Extreme events, such as the flooding and drought in 2012, are likely to become more frequent and more severe in the coming decades. It is vital that businesses plan for weather impacts to safeguard their operations today and in the future. Every £1 spent on preventing flooding saves £8 in repairing damage.

“Many businesses are already helping to build a stronger economy in areas previously at risk by contributing £148million in partnership funding.”

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Source: Property Talk Live