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Last Updated: Sunday, 29 July 2007, 16:02 GMT 17:02 UK
Fixing the flood infrastructure
By Ashley Steel
Head of transport and infrastructure, KPMG

Damage to train tracks rails, railway, rail network by flooding, Oxfordshire
Skills shortages could delay rebuilding of infrastructure
The floods of the past fortnight have demonstrated yet again the frailty of our infrastructure and how much we take for granted the electricity stations, the rails, roads, and water plants that underpin our economy.

The government estimates that the deluge has cost the country at least 2bn.

The task now is to rebuild homes and roads, to build new flood defences and modern drainage systems, and to do so quickly.

But we face two challenges: how do we fund the work that needs to be done, and who do we get to do it?

We need innovation to meet these challenges.

Skill shortages

One of the greatest challenges will be to find not only the resources but also the skilled people who can rebuild and repair damaged homes, roads and plants.

Bev Lear inspects her allotment in Oxford
Householders are still assessing the damage to their property

Floods or no floods, this skills shortage is already causing problems to many in the building industry.

Demand is outstripping supply in the UK and elsewhere.

For example, KPMG's most recent global construction survey found that the shortage of qualified contractors is the industry's single greatest concern.

The floods can only make the situation more acute.

Housing provision

But natural crises also provide opportunities.

The government recognises the housing shortage and has announced that a further three million new homes must be built by 2020.

But if many of these homes are to be built in Britain's vulnerable flood plains, as politicians and environmentalists have already said is inevitable, then what provisions are needed to prevent further disasters?

There are opportunities for planners and builders to create homes more suited to our increasingly erratic weather.

Hot spells often bring hose pipe bans but this is often due to the millions of litres of water each day pouring into the ground from Victorian water mains, which the water companies are having to invest billion of pounds to replace.

Thames Barrier
Could we see more projects like the Thames Barrier?
Flood defences

Flood threats to London led to the construction of the Thames Barrier which was finally opened by the Greater London Council in 1984.

Then the argument was that this project was vital for preventing future tragedies and protecting the crucial infrastructure of the capital from flooding.

Now climate change is increasingly cited as one of the greatest threats to civilisation.

But whether the recent floods are caused by global warming or are the result of unexpected natural disaster, the argument for looking again at our flood defences is greater than ever before.

Business challenges

It is time to recognise that increasingly erratic weather now poses a business risk and that means businesses will have to develop long-term strategies to deal with the challenges ahead, instead of leaving them as a sole responsibility of the government and its agencies.

The UK also needs to invest significantly more in its flood defence infrastructure than it has done to date.

A flooded shop in Evesham
Businesses may have to contribute more to flood defences
The scale of the investment needed means that it is unlikely to be possible to fund this out of general taxation, given other competing demands.

Private finance will have to play an important role in financing these works.

Companies will have as much interest in adequate flood defence as hospitals and schools.

Private finance has already played a role in helping to build sea defences in Pevensey Bay on the East Sussex coast. That is a relatively small scheme but the principle may hold good for larger projects.

Could incentives be given to private operators to build flood defences, including a combination of government grants paid over time and charges on local people and businesses that would benefit from the extra protection?

This may help to reduce the insurance costs born by the local communities affected.

One thing we do know is that applying conventional thinking to this challenge will not solve the problem.

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