For decades, London’s tidal flood defences have been treated as a permanent and reliable feature of the city’s infrastructure, protecting millions of residents, businesses, and critical assets from the threat of tidal flooding. The question now is how to ensure they are fit for the future with climate change.
In May, BusinessLDN, together with the Environment Agency and AtkinsRéalis, brought together senior figures from across infrastructure, development, finance and policy to discuss the Thames Estuary 2100 (TE2100) investment strategy and what it will take to bridge the funding gap to deliver the required investment in London’s flood defences.
The conversation reflected a growing sense that the capital is approaching a critical moment. Maintaining and upgrading the system will require between £14bn and £22bn over the next 15 years. The stakes go well beyond physical infrastructure, with 1.5 million people, £400bn of property and more than 60,000 businesses reliant on the system continuing to perform.
What came through strongly in the discussion is that the engineering challenge is not the constraint. The harder question is how to fund and sustain a system of this scale over the long term, who pays, and how. Experience from cities such as New York points to the same challenge. Securing investment for flood defences is often achievable, but funding their long-term operation, maintenance, and eventual renewal is a far more difficult task, shaped by political priorities and competing demands on public resources.
London faces additional complexity in how responsibilities are distributed. The Environment Agency is responsible for only a small share of the capital’s tidal flood defence network, with the majority owned and managed across a mix of organisations. This fragmentation makes it harder to coordinate investment and creates uncertainty over who is ultimately responsible for funding long-term upkeep.
Much of the discussion also focused on who pays and how contributions are structured. Flood resilience creates value across the economy, supporting land values, enabling development and sustaining investment confidence. At the same time, those benefits are spread widely, making them difficult to translate into clear revenue streams, and bringing a sharper focus to how costs are shared fairly across businesses, landowners and communities.
A range of options is being explored as part of the TE2100 plan. Property-based levies could reflect the value protected. Business and development contributions could build on models already seen in parts of London. Insurance-related approaches were also discussed, alongside the role of central government funding. None is straightforward. Each raises trade-offs around affordability, economic impact and fairness, particularly where costs may be passed through to tenants or fall unevenly across different geographical areas.
There was also recognition that London already funds elements of flood resilience through council tax and business rates, but that these mechanisms are not always visible or well understood, complicating the case for additional charges.
What is clear is that no single solution is likely to be sufficient. A combination of funding sources will be needed, bringing together public funding with contributions from those who benefit directly or indirectly. There was also a clear sense that government will need to play a central role, both in contributing funding and in setting the framework within which different approaches can operate, with an expectation that London will need to contribute a significant share alongside national support.
Alongside funding, engagement remains a challenge. Awareness of flood risk is often low, even in areas most at risk. Information exists but is not always understood or acted on. For businesses, the implications for operations and supply chains are not always fully considered, despite the potential scale of disruption. This is compounded by a wider issue in which markets do not fully price in risk or the value of resilience across properties and business activity.
At the same time, the discussion highlighted the need to frame and communicate the issues more clearly. Flood resilience is not just about managing risk in the background; it underpins economic activity, development and long-term investment decisions. It supports growth, protects productivity and reinforces confidence in London as a place to invest and operate.
The TE2100 strategy provides a clear long-term direction, but the task now is to translate that direction into funding approaches that are credible, investable and capable of supporting delivery over the very long term. That means developing funding models that are fair and workable in practice, as well as strengthening coordination across the organisations involved, and ensuring sustained investment in both new infrastructure and the maintenance of existing assets.
Our roundtable underlined the opportunity for BusinessLDN members to shape that next phase. With key decisions still to come, there is a window to influence how London funds and delivers the next generation of flood defences that the city needs to grow. The requirement is clear, the risks are well understood, and the focus now turns to how the necessary investment is secured.