Department for Levelling Up, Housing & Communities
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Healey confirms EU flood recovery funding application

Healey confirms EU flood recovery funding application

COMMUNITIES AND LOCAL GOVERNMENT News Release (145) issued by The Government News Network on 1 August 2007

Flood Recovery Minister John Healey today announced the Government's intention to lodge an application to the European Commission for support from the European Union Solidarity Fund (EUSF) to help recovery from the recent flooding in the UK.

Government has already announced over £46million for flood-hit areas as well as more support through the special Bellwin scheme. This application is subject to meeting the eligibility criteria set out by the European Commission. If successful we would expect resources to be available in nine to twelve months time.

The aim of the EUSF is to help Member States meet the uninsurable costs of dealing with natural disasters, for example, supporting the costs of emergency services, cleaning up and putting infrastructure back into working order.

John Healey made clear the Government will put together the strongest case possible for additional funding for local communities, with the Commission making final decisions on whether countries will qualify. We are still assessing the extent of the damage caused in both the June and July floods - we are making the application now to ensure we would get any money as soon as possible.

For the application to be successful, the technical criteria set out by the EU state the total amount of damage caused by a natural disaster has to exceed £2.2billion.

The Commission do not provide full funding for the cost of the damage. They would only provide a proportion of the costs which they decide - insurers will also have a key role to play as well as central government, local government, industry and other agencies playing their part as well.

John Healey MP said:

"As part of the cross-Government work to support flood-hit communities get back on their feet I can confirm we are working on an application for funding from the EU Solidarity Fund. As a member of the EU we intend to exercise our right for support from the Solidarity Fund which was set up specifically to help countries that have experienced extensive damage from natural disasters such as the recent floods.

"We have already announced over £46million of support for flood-hit areas and there will be more support through the special Bellwin scheme.

"I can also confirm that we've had constructive official-level discussions with the European Commission in which they've indicated that we can make a single application covering both the June and July floods.

"The final decision will rest with the Commission but we will make the strongest possible case. As part of this we are continuing to carry out assessments of costs with those areas affected by the June floods and stand ready to do the same with areas hit by the more recent floods.

"Clearly those areas that are currently flooded need time to deal with more immediate practical concerns before reviewing the scale and cost of overall damage. The top priority has been safeguarding life and property and some areas are only now starting to move into the recovery phase.

"We are committed to doing everything we can to help life return to normal as quickly as possible in local communities and believe this application can play a part in this. A successful EU application would be a useful addition to the package of support we're already putting in place - this European bid is however only one part of our efforts to support flood-hit communities."

Notes to Editors

The EU Solidarity Fund (EUSF)

The EU Solidarity Fund (EUSF) was established in November 2002 to provide financial assistance in the aftermath of major disasters in Member States and pre-accession countries, which cannot be covered by the regular EC Budget. Under the provisions governing the EUSF up to EUR 1 billion can be provided in a given budget year to fund uninsurable costs including emergency relief and reconstruction operations, above that provided for in the EU's spending plans for the period 2007 to 2013, which are known as the Financial
Perspective.

Before a Member State can apply for support from the Fund, the total amount of damages incurred in a major disaster must exceed a certain amount. The EUSF's eligibility threshold for what are termed "National Level Disasters" is for all damages, insurable and uninsurable damage to exceed EUR 3 billion (2002 prices) or 0.6% of the affected country's Gross National Income (GNI) in order to qualify for assistance, whichever is the lower. In the UK's case, the threshold is now E.2 billion at current prices.

The assistance from the EUSF is apportioned progressively such that the portion of the damage exceeding the 0.6% GNI threshold gives rise to aid amounting to 6% of total direct damage while the rate is 2.5% for the total direct damage under the threshold. The aid provided - were the thresholds met - would only be a small proportion of the total aid required. Between 2002 and 2005, member States have received from the Fund between 2.5% and 5% of the total damage suffered - so if the UK's total damage is £2.5bn, we might expect between £62.5 million and £125 million.

Application Process

The UK has to complete a detailed application form indicating:-

* What areas of the country were affected;
* The economic and social repercussions of the disaster
* The total amount of direct damage caused
* How much of that damage was caused to public property
* The percentage of the Gross National income that the damage represented
* Estimating the costs incurred in areas which the EUSF will support. These are:-
* the immediate restoration of infrastructure and plant in the fields of energy, water and waste water, telecommunications, transport, health and education;
* Providing temporary accommodation and funding rescue services to meet the immediate needs of the population in the affected areas;
* Immediate securing of preventive infrastructures and measures of immediate protection of the cultural heritage
* Immediate cleaning up of disaster-stricken areas.

UK and Commission officials will then discuss the final detail of the application and resolve any issues. The Commission will then carry internal consultations and determine an amount of grant that would be appropriate in the circumstances. The Commission will then recommend a grant for approval by the European Council and European Parliament.

The UK and the Commission then sign an agreement on how the grant will be implemented and the money paid.

Any funding received has to be spent within one year of receipt. If the UK receives any money from the Fund, then it will be required to report on what that money has been used for. If not all the money received is spent, then it will have to be returned to the Commission. Likewise, if the expenses for which the Fund is asked to support turn out to be less than we estimated, then any excess payment will have to be reimbursed to the Commission.

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