Debate contribution: Flooding in South Down: Economic Recovery

Debate contribution by Mr Conor Murphy on 27 February 2024.

MLA

Mr Conor Murphy

Party at the time

Sinn Féin

Date

27 February 2024

Type

Debate contribution (made as a minister)

Business

Adjournment

Heading

Flooding in South Down: Economic Recovery

Assembly identifier

Official Report component 4238181

Read the official Assembly record

Text

I thank the Member for bringing forward the Adjournment topic this afternoon. It is very timely, given the movement that we have just had in getting the scheme up and running. I thank all the Members who contributed to the discussion. In my address, I will answer some of the points that were raised, and, at the end, I will try to pick up some of the other points that Members raised. I shared the experience of every one of you who was involved. I was with Liz in Newry: we were on the ground, trying to assist people. Households were also flooded in Camlough, and we tried to assist. I commend the effort of business organisations, the community and voluntary sector, individuals and business owners, who all pulled together at a time of enormous crisis to try to assist those most in need, and to try to protect their homes and businesses. They are due huge commendation. As Members have said, October 2023 was the wettest October in living history in Counties Down and Armagh. As a result of that unprecedented rainfall, we had significant flooding in the council areas there. Around 245 businesses that employ around 700 people were directly flooded, with the cost of restitution, repair and restoration estimated at over £100 million. In the aftermath of the flooding, the British Secretary of State announced that unused capital DEL would be converted to resource DEL to fund the response. Initial support included the provision of rate relief to around 245 flooded premises, which cost around £1 million, and the provision of a £7,500 flood damage support grant to help businesses to reopen as soon as possible. That scheme was delivered by district councils, and 143 businesses received support totalling just over £1 million. While the one-off grant payment of £7,500 was welcome, it was not sufficient for many businesses, as has been outlined here today. There is a risk that, in the absence of further support, some businesses could struggle to continue to trade, which, in turn, would impact on the economic future of the areas that were impacted by flooding. Since taking up post, I have been working with my officials to provide more support within the envelope of money that we have available. Last week, I announced a support package of up to £10 million to provide further assistance to businesses and local economies that have been impacted by the flooding. The support package consists of an enhanced flood support scheme and two hardship schemes. District councils will control and administer the three schemes within the broad policy parameters set by my Department. The councils will be reimbursed for the grant payments using the powers in the Local Government Act 2014, specifically section 29. Councils will engage with the Local Government Auditor to test their processes and ensure that they are compliant in managing public money. The enhanced flood support scheme opened at noon today. Although each council will administer its own applications, Newry, Mourne and Down District Council has agreed to accept applications on behalf of the other councils. The application form and guidance notes for businesses, which will set out the eligibility criteria and the evidence to be submitted with an application, will be available on council websites. This scheme will provide up to £100,000 to flooded small and medium-sized businesses that, through no fault of their own, could not get insurance that covered flood damage. In response to feedback from concerned businesses, the enhanced scheme will be open to those businesses that had flood damage insurance in place but have subsequently found that insurance companies are refusing to pay out on some or all of the costs of the flood damage. It will also be open to flooded businesses that were temporarily closed or that had not yet opened but were due to open imminently. That addresses the rates point that Patrick Brown raised. Those are the types of businesses that were unable to access the £7,500 grant. The grant will provide businesses with funding for refitting costs and replacing damaged or destroyed equipment. Again, after listening to feedback from businesses that suffered significant stock damage, I have agreed to include stock damage as an eligible cost. The level of support being offered to businesses through the enhanced flood support scheme is unprecedented and far surpasses the support provided to businesses impacted by flooding in England, Scotland and Wales. I know that councils will endeavour to pay out grants to businesses as quickly as possible. However, the scheme is complicated to administer, so I ask businesses to be patient. Given the large sums of money involved, a loss assessor will be appointed by the councils to verify costs. That process is under way. I know that you will understand that due diligence is necessary to protect the public purse against fraud and error. As soon as applications have been approved, councils will ensure that payments follow swiftly. While the enhanced flood support scheme will provide much-needed support to many businesses, there are others impacted by the flooding who did not receive the £7,500 grant and who will not be eligible for the enhanced scheme. To help address the gaps, I have announced two new hardship schemes that will be delivered by the councils and will open to applications in March. The first of those is a £5,000 hardship payment to occupants of flooded premises that are not eligible for other supports. These include SME businesses that had flood insurance and were adversely impacted by the flooding. For example, in addition to losing revenue due to being unable to trade, some businesses are still waiting for their insurance provider to pay out, and some will face steep excess payments. I have also agreed to open up the £5,000 hardship payment to non-trading charities, community groups, churches and non-trading sports clubs whose premises were flooded and which have faced significant disruption as a result. I have also recognised that disruption and financial loss have not been limited to the businesses that were flooded. Many businesses that were not directly flooded have suffered financial loss because of the flooding. For example, some businesses had no access to their premises, equipment or stock as a result of the flooding, or customers, suppliers and staff were unable to access the businesses. To assist those businesses, I have agreed to a second hardship scheme. This scheme will provide a £2,500 payment to SME businesses that were not directly flooded but were unable to access their premises and, hence, unable to trade as a result of the flooding. That includes businesses that are located on the upper floors of flooded premises and businesses that were unable to access their premises due to the clean-up in the area. I am committed to providing £10 million to the councils impacted by the flooding in order to deliver support to businesses and help secure the economic future of local economies. A total of £1·1 million capital DEL and £1 million resource DEL has been allocated to my Department for 2023-24. Given that the majority of costs will fall into the next financial year, I have asked the Minister of Finance that funding of around £8 million be prioritised by the Executive in setting the next Budget. She has responded to say that, while she is content to approve the spend for the scheme, it will be for the Executive to decide on funding allocations as part of their consideration of that Budget. It has been a difficult and worrying time for the businesses that were affected by the flooding. This support package will go some way towards helping many of those businesses continue to trade. Some of the points have been answered in my contribution so far. A number of Members referenced the fact that there was not an Executive on the ground to respond, and I agree that that undoubtedly caused additional stress as people tried to find someone to have their back at that time. I am glad that we now have an Executive. I take Colin McGrath's point about the lateness of all this, but I have been in office for three weeks, and we have the scheme turned around, approved, out the door and ready for councils to take applications from today. That proves that when a response is needed, an Executive being in place is the best outcome for our people.

Issues around town-centre recovery and regeneration were raised by Patrick Brown and Cathy Mason. That will take many Departments coming together, but certainly the Department for the Economy will play its role in relation to that, and with the district councils as well. Some Members referred to long-term learning. Flood alleviation and prevention are going to be critical in the time ahead. Again, those will be cross-departmental matters for the Executive. I am glad that we have an Executive back in place to put together plans. One issue that was not mentioned was climate change. Flooding is no longer unprecedented; it has become a regular pattern of our weather. We will continue to suffer from that, right across the country, until such times as we start to meet targets to reduce carbon emissions and try to address climate change. Others raised points about underinvestment in infrastructure. We continue to suffer from a lack of the finances that we actually need to provide the basic services that we need. I hope that that will be addressed by the Executive's approach to the Treasury to try to secure the necessary finances for public services. John Stewart raised the issue of insurance. We do not have responsibility for insurance. Financial regulation is a reserved matter, but I would hope that we can make collective approaches, through the Executive, to the Treasury and through the authorities in London to get insurance. Insurance is highly costly and insurers very reluctant to pay out for any damage. Flooding is increasingly going to push insurance beyond the ability of businesses to meet that cost. We then find people trading with no insurance cover, and that can be disastrous for them. I take Liz Kimmins' point about households. That has been the forgotten element in all this. I recognise that the funding, which I think was set in 2007, is clearly inadequate in today's circumstances. I would hope that the Department for Communities and the Executive will be able to do something to address that. I thank the Member for bringing the debate, and I was happy to respond. I hope that the scheme that opened today for applications will go some way to undo some of the economic damage of the flooding.

1,779 words. Text as published by the Northern Ireland Assembly.

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