Budget cuts also present difficulties, the watchdog says. The Environment Agency believes that an extra £20 million a year is needed to maintain current levels of flood protection. But government funding to the agency was cut by 10 per cent at the last spending review. The NAO has warned that councils are unlikely to be able to plug the gap.
The Environment Agency has improved its efficiency since 2007, the NAO said, bringing 98 per cent of "high consequence" defences up to target condition and providing better flood protection for 182,000 households against a target of 145,000.
While the NAO said that improved value for money could be achieved by giving flood risk management powers to local authorities, it warned that action is needed to tackle the challenges identified.
NAO head Amyas Morse said: "Local bodies will have to meet the new expectations placed on them - including that of raising investment locally - while under the pressure of delivering on other newly devolved responsibilities.
"If these challenges are not met, the reforms will have failed to fulfil their potential to increase levels of investment in flood management and value for money to the taxpayer."
Flood Risk Management in England can be read here.