Agenda item

(To receive a report by McGill, Lindsey Marsh Drainage Board, and Jane Froggatt, Witham and Humber Drainage Boards)

Jane Froggatt, Witham and Humber Drainage Boards, and Andrew McGill, Lindsey Marsh Drainage Board, delivered a report which provided an overview of the financial pressures facing Internal Drainage Boards (IDBS), District Councils and drainage rate payers.

The Vice-Chairman, Councillor Tom Ashton, gave a brief introduction to this item.

Jane Froggatt, Witham and Humber Drainage Boards, guided the Committee through the report and the following was noted:

·       IDBs had experienced a challenging year financially and many had to increase their Penny Rate (in the pound) to set balanced budgets; cost pressures were exacerbated by increased fuel costs.

o   Witham and Humber DBs would have contained a Penny Rate increase from 5.5% to 6.75% for 2023-2024, however the increased cost of electricity resulted in three out of the four DBs increasing the Penny Rate to 15%, and one raising it to 29%.

o   Challenges were being experienced nationally; however Lincolnshire was in a more vulnerable position than areas that had modernised their diesel pumping stations. Unit costs had increased from 12 pence per kilowatt hour (kWh) to 30 pence kWh. This was projected to increase further to 40 pence in October 2023.

·       The remit of the work carried out by IDBs had increasingly broadened to include flood risk management and water level management.

·       Procurement for IDBs in Lincolnshire were facilitated by the East Shires Purchasing Organisation processes.

·       Following the Ofgem Targeted Charing Review, Standing Order charges had risen from £13,000-£14,000 per year to £128,000 per year (before the pump was switched on). Thus, the budget had been calculated on the assumption of a unit price of 40 pence kWh.

o   According to historical analysis, pumping stations tended to consume 80% electricity usage from November-March every average rainfall year therefore budgets were also calculated on this assumption.

·       Assurance was provided that switching a pump off was a last resort.

·       Budget reserves were insufficient on a local and national scale. This meant IDBs would not be able to afford to manage a period of flood events or a significant wet period.

·       The main sources of income for IDBs were the Council and the level of Drainage Rates which the occupiers of land in IDB drainage districts contributed.

·       It was requested the Committee supported IDBs through engagement with DEFRA, Lincolnshire MPs, Association of Drainage Authorities (ADA)and District Council’s to raise the matter to the Secretary of State level.

Andrew McGill, representing Lindsey Marsh Drainage Board, reported that:

·       Increasing numbers of assets in drainage areas were below sea level and required management through the County Council and Environment Agency.

·       Initial monetary concerns were raised in August 2022; an agreement was reached with EPSO as they had offered the best quote of electricity prices, and the agreement was signed off in January 2023.

·       Discussions with East Lindsey District Council had been held to request their support for a programme which would see the modernisation of several Lindsey Marsh Drainage Boards over a six-year period. Meetings had also been held with DEFRA in Doncaster.

·       There was public interest for the programme as 136,000 residents were split between the East Coast which was protected by Lindsey Marsh Drainage Boards and the high land level of the Lincolnshire Wolds, rendering them vulnerable to coastal flooding.

·       Electrical costs last year were £338,000; this year, the cost was expected to be £282,000 however if it was a wet year it would cost an additional £500,000.

o   IDBs did not have access to the Public Works Loan Board to help manage this cost; they could only access funds for refurbishing capital assets.

·       Lindsey Marsh Drainage Board reserves were limited as they were previously used to manage 2019-2020 flood events on the Isle of Axholme because North Lincolnshire failed to file a billing claim to request financial support.

·       It was assured that Lincolnshire IDBs remained proactive in finding solutions, and it was requested that the Committee lent its support.

During consideration of the item, the following was noted:

·       The Committee acknowledged the concerns of IDBs, and commended the partnership-working that consistently occurred between them, LCC and other organisations.

o   Some members of the Committee sat on IDBs thus were aware of financial restraints.

·       The public were not explicitly requested to pay rates to support IDBs but were contributing, nonetheless. Furthermore, it was suggested that the money contributed by residents for IDBs could potentially be used for other means, but given the financial difficulty experienced by IDBs this was not feasible.

·       Assurance provided by government was insufficient and failed to acknowledge the severity of the problems facing IDBs.

·       Members questioned whether IDBs use renewable energy; it was assured green energy was used, and that IDBs kept to a pump regime of midnight to 7am to avoid overwhelming the grid. Wind or solar power could not be provisioned when refurbishing pumping stations at the end of their design life, and there were no viable alternatives to electric pumps – diesel pumps were considered back-ups.

·       A significant amount of the energy cost experienced by IDBs came from starting up the pump; in some locations, pumps had been moved higher above the water level as to not trigger them as often.

·       The proposed updates to the pumps along the East Coast would include channels being built to store water in surge times through gravity discharge to limit the frequency the pumps are turned on.

The Committee agreed to extend the meeting by 30 minutes.

RESOLVED

1.    That as the lead flood authority, LCC to write to Ofgem and DEFRA about the specific challenges raised by standing charges and electricity costs

2.    That the Committee writes to the Department of Levelling Up, Housing and Communities in support of lobbying efforts already engaged with by the department by district colleagues, boards and ADAin soliciting a Section 31 grant to support additional costs or a variation in a referendum cap for authorities which pay a special-levy