Flood protection schemes - assessment of economic, environmental and social impacts: guidance

3. DEFINE: Define issues and objectives

Defining the purpose

3.1 An appraisal should start with a clear statement of the problems to be tackled or the objectives to be achieved. These should be defined without prejudging the solution; for example, it is not acceptable to state that the objective is 'to replace existing flood defences with a 1% annual exceedence probability ( AEP) (1 in 100 year return period) design standard flood embankment'. Further, all social, environmental and economic issues should be taken into account, including the effect of climate change. Major constraints affecting the options should also be stated.

3.2 An example of such a statement might be:-

'The town is prone to flooding from the river X with an annual exceedance probability of greater than 5%; the area at risk covers 120 properties including some sheltered housing with a higher expectancy of risk to life. River flood flows are expected to increase by between 15% and 35% by the 2080s. Sections of the river border an SSSI.'

3.3 Deaths from flooding in the UK have fortunately been rare. However, this risk is always present. It is sensible, therefore, to assess whether floods in a particular situation pose an unusually high risk to life. Such a threat might occur with a rapid rise in floodwaters, accompanied by high flow velocities and deep water, particularly where this could result in the structural failure of buildings. Consequently, where structures such as flood embankments fail, or where flooding can occur in very small, steep catchments, special attention should be given to managing the risk.

Setting objectives

3.4 The Scottish Government's policy statement on appraisal sets out principles for setting flood risk management objectives.

Statutory requirements

3.5 Schemes may be affected by legal obligations under national and international law, which may constrain the appraisal process. For example, where the obligations involve requirements that must be met, it would be incorrect to test that position using cost-benefit analysis. Instead, the principles of cost-effectiveness would usually be more appropriate to identify the least costly method of meeting the legal obligations.

3.6 The water environment provides a range of habitats, which supports a wide variety of species and water-related uses. Changes to that environment, both locally for a scheme and in a wider national context, need to be taken

into account in the appraisal process, particularly the ability to meet statutory environmental legislation such as the EC Water Framework Directive and the Birds & Habitats Directives. As part of the submission, an Environmental Impact Assessment will need to be prepared under the Flood Risk Management (Flood Protection Schemes, Potentially Vulnerable Areas and Local Plan Districts) (Scotland) Regulations 2010.

3.7 Boundaries in space and time have to be drawn for any cost-benefit analysis. They should be set taking into account the consequences of the different options. It may not be possible to assess all such consequences, and a reasoned decision must therefore be made as to how far the process should be pursued. Options may have an influence outside the immediate area of the scheme but, in addition, their consequences may depend on factors outside the project boundary. For example, urbanisation of the upstream catchment could affect flood risk. The assumptions made about external conditions should be realistic, not simply convenient. Any significant impacts beyond the project boundary should be included.

Time span of the analysis

3.8 The appraisal period should reflect the physical life (with maintenance) of the longest-lived asset under consideration for a scheme. The presumption is that for most conventional schemes involving major earthworks, concrete or masonry structures, a 100-year timeframe will be appropriate. A 100-year timeframe allows for appropriate comparison of options. Using a shorter timeframe (such as 50 years) would mean that costs or benefits that occur after 50 years are not taken into account and this could affect which option is identified as preferred. For example, short time horizons can bias the economic appraisal against options that cost a lot now but which are less expensive to maintain, which provide significant benefits, and/or may be more sustainable over a longer timeframe. Longer appraisal periods also better allow for more of any environmental or adaptation benefits to be included in appraisals.

3.9 If, exceptionally, a shorter time horizon is used, terminal values may be applied to ensure that different options are evaluated on a comparable basis. These values should equate to the residual values of any assets (the values of the assets minus any depreciation in values that has occurred over the assets' lives to date), normally calculated using straight-line depreciation. It may be beneficial to note down any longer term impacts that are not taken fully into account during the shorter timeframe to ensure these are considered during decision-making. Clearly the costs and benefits of all options should be evaluated over the same period.