How is Funding Allocated?

In each case, decisions are made by weighing the costs of management against the expected benefits. These benefits are not limited to the number of properties defended; the social and environmental benefits, which are sometimes harder to quantify, are also considered.

Government funding is provided through 2 principal sources:

• Formula Grant (sometimes given the incorrect but more descriptive name of Revenue Support Grant)

• Grant-in-aid (which used to be termed Capital Grant)

Formula Grant
This is distributed to local authorities through the Department of Communities and Local Government (DCLG) and is:

• a share of funding from the National Non-Domestic Rates pool (a figure sometimes referred to as the Distributable Amount)
• Principal Formula Police Grant (only for eligible authorities)
• a top-up grant (called the Revenue Support Grant).

Grant-in-aid
This is distributed to local authorities and the Environment Agency through the Department for the Environment, Food and Rural Affairs (Defra). The Environment Agency now takes a leading role in allocation of the grant to local authorities (through its “Supervisory Overview”). 

This used to be termed capital grant, but has now assumed the more generic term of Grant-in-aid to match other Exchequer grants for money coming from Government for a specific project. 

This kind of funding is usually used when the Government and Parliament have decided that the recipient should be publicly funded, but operate with reasonable independence from the State.  Most bodies in receipt of this type of grant are, therefore, non-departmental bodies.  (e.g. local authorities or the Environment Agency).

Each year local authorities and Internal drainage boards apply for funding for the work they would like to do. From 1 April 2008 Outcome Measures (OMs) became the new performance framework. Information on these measures may be found in the document linked below.

• Outcome Measures frequently asked questions and definitions (PDF, 92KB)