ON DECEMBER 6th the largest storm surge since 1953 hit Britain’s coasts, flooding 1,400 houses. The fact that only two people died—compared with 326 in the earlier storm—is testament to the tidal barriers built in Britain over the past few decades. Yet the system that created many of those sea defences, and encouraged people to keep living in flood-prone areas, is being abandoned.

Since the 1960s the government has paid to build flood defences while insisting that insurers cover most properties in flood-prone areas. This arrangement has gradually become a casualty of austerity and climate change. Spending on flood defences fell from £629m ($972m) to £510m between 2010 and 2012. Simply repairing existing defences would cost £1 billion per year by 2035. New flood defences will be subject to a rigorous cost-benefit analysis, with more land in effect surrendered to the sea. The last agreement with the insurance industry came to an end this July.

In place of the old system, the government has proposed shifting the costs of flooding onto homeowners. All households taking out insurance will now pay a £10.50 levy to Flood Re, a not-for-profit fund, to subsidise premiums for 500,000 houses in flood-prone areas.

The new scheme is patchy. Whereas the old agreement covered all properties with no worse than a 1-in-75 annual risk of flooding, the new scheme will exclude many. Houses in the top council-tax band and businesses will not be allowed to join the scheme. Houses built since 2009 will also not be covered (28,000 were planned to be built on floodplains in 2011 alone). If properties flood too often they will be thrown out of the scheme. MPs in flood-prone places such as Hull are not happy.

Worse, Flood Re’s sums do not yet add up. One government study suggested that the fund has a 58% chance of running out of money in the initial 20 years the scheme is to run for. Some fear that the state may find itself spending some of the money saved by building fewer defences on topping the scheme up.