Coastal Loss Innovative Funding and Financing (CLIFF)

Find out what CLIFF is and how it aims to support communities at risk of coastal change and erosion.

What is CLIFF?

CLIFF aims to develop funding and financial support for coastal communities in high-risk areas.

This support could provide the best solution to encourage residents in high-risk areas to relocate, or provide financial protection to those at risk. It will help residents and communities to become more resilient to coastal change.

Background

England has some of the fastest-eroding coastlines in Europe. Coastal erosion is a natural, ongoing process that has been happening around the UK for thousands of years. For some coastal locations, it is not technically, economically or environmentally practical to protect or continue protecting from flooding and coastal erosion.

As the risks of flooding and erosion increase with climate change, we must explore new approaches to support people living, working and using coastal areas. Currently, there is no existing financial support or funding for communities at risk of coastal erosion or permanent flood inundation. CLIFF aims to address this and identify options for these communities.

Who is involved?

CLIFF is a study commissioned by DEFRA and Coastal Partnership East (CPE) to look at possible solutions to this problem. It is part of the Flood and Coastal Erosion Risk Management Strategy, which aims to create climate-resilient places.

Coastal Partnership East

CPE is a partnership of North Norfolk District Council, Great Yarmouth Borough Council and East Suffolk Council. Together, they began this work due to the challenges faced along the East Anglian coast.

Other organisations involved are:

• Lewes District Council
• Local Government Association
• Environment Agency
• Natural Resources Wales
• Scottish Government

Work so far

Risk advisors, Marsh Consulting, were commissioned by CPE to complete the study. During the first phase, they reviewed the following:

• past research
• case studies
• interviews

The aim of this review was to gather expertise across several sectors, including insurance and banking, to help the development of possible solutions.

Possible solutions

The review considered five options, as listed below:

Option	Description	Outcome
Coastal Accumulator Fund	Homeowners pay into a fund for their property. The build-up of this fund over many years could balance any drop in value once the property reaches the end of its life expectancy.	This fund could be a possible coastal adaptation option. It should be further developed in later work phases.
Local Authority Coastal Adaptation Fund	Residents at imminent risk are given support from a local authority fund.	This is a strong potential option to be considered moving forwards. It may also provide local authorities with a sustainable funding process with wider uses for resilient adaptation in coastal areas.
Levy Model	Levy raised using methods, such as household insurances, which are specifically allocated to pay out a cash sum once coastal properties (at risk of erosion or permanent flood inundation) become uninhabitable.	Levy-type models have been used globally to cover many types of risk. Specific methods for a coastal loss levy would need more consideration to understand its overall viability as an adaptation option for the UK.
Rollback Model	Demolishing at-risk properties and providing homeowners with the opportunity to develop a plot of land and relocate.	Rollback has been successful in the UK with previously completed national projects. Its use along with other solution options (such as Local Authority Coastal Adaptation Fund) should be explored in later work.
Compensation Model	At-risk residents are given compensation (for example, a like-for-like replacement or deposit for a new property) before or after loss.	Government policy does not currently provide for compensation caused by coastal erosion, making viability low. Unless the government’s position changes, there is limited benefit in exploring how this model could work in the UK.

During the second phase, of the options identified, the review prioritised three for further assessment:

1. Coastal Accumulator Fund
2. Local Authority Coastal Adaptation Fund
3. Levy Model

These options were assessed against several criteria, including:

• strategic scope
• operational requirements
• financial or economic viability
• social, commercial, political and legal requirements

The Rollback Model has been explored in other studies, and the government does not currently allow compensation, so these two options were removed from further analysis.

CLIFF's financial model has suggested that the following options are most likely financially viable at defined scales. There could be existing or possible delivery methods for:

• Coastal Adaptation Fund
• Levy Model

The conclusions of the reports below highlight the most viable approaches.

Latest update

View the project's latest update from April 2023.

Related documents

• Phase 1a report
• Phase 1b report

Next steps

Discussions are taking place on how CLIFF and other funding and finance opportunities, such as mortgages, will be carried forward as part of the Flood and Coast Innovation Programmes.

The Resilient Coast and Coastal Transition Accelerator Programme (CTAP) will lead in developing and trialling the shortlist of options. They will determine whether these options would work, what elements need addressing, and who may need to be brought on board for coastal transition funding methods to work.