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

5. DESCRIBE: Assessing and valuing the impacts

5.1 Flood risk management actions alter the risk of flooding, by affecting the likelihood of flooding and/or the consequences. To decide between options, it is therefore necessary to compare the beneficial and adverse impacts of altering flood risk in the appraisal. Impacts should be described, quantified and, where possible, valued.

5.2 This section of the guidance document sets out how to evaluate economic, environmental and social impacts. Section 6 goes on to consider how the evaluation should be used in the context of assessing the benefits from flood protection schemes, compared to the potential losses. Guidance on estimating the financial costs of flood protection schemes is contained in the section 7.

Evaluating impacts

5.3 There is a wide range of different types of impacts that could be caused by flooding. The impacts can be arranged into three categories:

• Economic impacts - Property damages, emergency costs, infrastructure, transport, agriculture, land use, indirect impacts;
• Environmental impacts - Ecosystem services, landscape, change in status under the Water Framework Directive, changes in condition of protected nature sites;
• Social impacts (including human health and cultural heritage) - human health and well-being, way of life, cultural heritage.

5.4 Impacts in all three categories need to be described, quantified and, where appropriate, valued in monetary terms. It is important to properly and clearly record all impacts - one possible way to do this is through the use of 'Appraisal Summary Tables' as recommended by Environment Agency guidance for use in flood protection scheme appraisals in England and Wales (reference 4). Any assumptions used and any uncertainties associated with the description, quantification and valuation of impacts should also be recorded.

Economic impacts

Property

Residential and non-residential properties

5.6 Permanent buildings at risk of total loss from flooding should usually be valued at their current market value, excluding any adjustment in value for the flood risk. For many strategic and preliminary studies, the mid-range of council tax bands, suitably adjusted from their 1991 price datum, can be used to estimate property values. Generally, property will be assumed to be written off if it is flooded on average more than once every three years, unless it is flood resistant or water compatible. This is because there is unlikely to be sufficient time for the property to be repaired and return to full use following the previous flood before the next flood occurs. As a result, repairing the property would be a waste of money. Write-off values are taken as the risk-free market value of an asset. It is important to use risk-free market values because the actual market value of the at-risk property could be lower (where the risk is known, there may be lower demand for the property or higher insurance costs such that the market value is reduced).

5.7 However, market values sometimes need adjustment. For example, for properties such as pubs and restaurants, the market value includes a significant factor for customer goodwill. This 'goodwill' element is a transfer, not an economic loss ( Annex A). In other circumstances, if there is an excess supply of, say, some types of commercial property, such property would not be replaced if lost, and no economic loss would be incurred. It is also important to avoid double counting any waterside amenity element of market value. Further, in the case of loss through abandonment, it should be assumed that the contents of the buildings are removed before the building is lost. Consequently, all removable fixtures and fittings should be excluded from the valuation.

5.8 Where a flood has occurred recently, a record of the damages incurred will often be a good starting point for evaluation of losses. However, it is important that the limitations of such data are clearly understood. Actual damages will rarely be available for the required range of events. Where losses are recorded, these will often be in financial rather than economic terms, and values will have to be converted.

5.9 The Flood Hazard Research Centre produces some standard data on the economic losses to be expected for different types of property, according to the type of dwelling, its age and other aspects. Adjustment factors, which take account of the additional losses from saline flooding, are also available. Details on these data and factors can be found in the 'Multi-Coloured Manual' and the 'Multi-Coloured Handbook' (references 5 and 6). In addition to providing data, the Flood Hazard Research Centre's manual and handbook also provide further guidance on how to consider, quantify and value property damages.

5.10 For large industrial or commercial properties, or unusual properties such as listed buildings, it will often be necessary to carry out a site survey of the likely losses. A questionnaire can be used for this purpose (reference 5). In times of rapid obsolescence and replacement of many commercial and industrial buildings, effective life should be carefully considered when assessing the value of such properties.

5.11 An alternative to standard data is to commission surveys. However, this is expensive. It is rarely justified unless the properties concerned are atypical and the use of standard data would likely give misleading results.

5.12 From the foregoing:

• land and buildings should be valued in constant real prices in their current use;
• any 'goodwill' element in values for commercial premises should be excluded; and
• care should be exercised in the derivation of non-standard valuations.

Temporary and semi-permanent structures

5.13 There are other cases where the real economic value of losses may be very different from current market values. For example, the economic value of a mobile home on a particular site is equivalent to the cost of moving it there and establishing the site, not the value of the unit itself, which could be retained if it were relocated elsewhere. Also, in assessing economic damages, caravans, mobile homes, chalets or other temporary buildings or structures should be considered as depreciating assets worth, on average, only half their replacement cost.

5.14 For the 'do nothing' case, it should normally be assumed that any caravan or mobile home could be relocated. The economic loss would then be limited to the cost of removal together with the loss of installed infrastructure, depreciated as appropriate. Where a site is to be protected, the 'do something' damages should be calculated in the normal way, taking into account the seasonal nature of occupation. Similar considerations will apply to other temporary or relatively short-life structures, such as most amusement park rides.

5.15 In specific cases, a caravan park may provide important support to another feature (such as tourism) or the revenue of another operation (such as an associated harbour). Moving the caravan park may not be possible within the local area and may therefore have significant impact on the sustainability of other values in the area. It is important that the overall interaction of features are identified and recorded. While it may not add strongly to the general 'do something' argument, it may be very significant in drawing comparison between options.

Emergency costs

5.16 A range of organisations, authorities and bodies may incur emergency costs in tackling flooding and in the recovery process, including police authorities, ambulance services, fire services, local authorities, voluntary services, the armed forces. The Flood Hazard Research Centre produces guidance on how to calculate emergency costs (reference 5).

Infrastructure

5.17 The market value of a property can be expected to include the value of the immediate services; such local services have no economic value once the property is lost. However, separate valuations will usually be appropriate for infrastructure serving a wider area including: trunk sewers; pipelines, cables and pylons; pumping plant and other such facilities; care homes; electricity generating stations (power stations); electricity sub-stations; gas works; hospitals; local authority depots; oil refineries; police, ambulance and fire stations; schools; sewage treatment works; telephone exchanges; village halls; and water treatment works. NB - disruption from and damage to transport infrastructure (notably main road and rail routes) should be considered under the transport impacts section.

5.18 The impacts on both national infrastructure and on infrastructure of local or regional importance should be considered. In accounting for infrastructure losses, the number and type of infrastructure, the area served by the infrastructure, whether existing and alternative structures have spare capacity, whether opportunities exist to divert or redirect services, and whether infrastructure would be lost permanently should all be considered.

5.19 In general, the loss of such infrastructure can be treated as the cost of replacing the facilities elsewhere or rerouting them. Appropriate adjustments should be made for depreciation and obsolescence. The implications of the loss of services provided by the infrastructure should also be considered, as should the potential for impacts to extend beyond the area directly affected by flooding.

5.20 Any knock-on effects from the temporary loss of services, such as health impacts and community disruption, should also be considered. Further guidance on considering impacts on infrastructure is provided by the Flood Hazard Research Centre (reference 5).

5.21 Embankments constructed primarily as flood defences have a functional value only in terms of the protection that they provide. Including a value for such assets is likely to lead to double counting. However, they may also have a use value for recreation, which may be taken into account.

Transport

5.22 Disruption of road and rail networks, can result in significant indirect losses. For road networks, it will not generally be worth evaluating these unless a major through road is closed a flood of at least 0.1% AEP. If flooding is expected with 0.2% (or greater) AEP, and a significant part of the network carrying through traffic is affected, the benefits of reducing disruption can be large, both in total and as a proportion of scheme benefits. Traffic that usually uses the roads will have to divert, and may have to travel further, and/or for longer, incurring both resource and time costs. Since the speed of traffic depends on volume, the normal traffic on the diversion routes will also travel more slowly, again increasing such costs.

5.23 Methods and guidance are available to help calculate the difference in the resource and time costs of using the road network under different flooding conditions, and to address the special problems of calculating the costs of flood-induced traffic disruption. The Flood Hazard Research Centre provides guidance on how to take account of the costs of road traffic disruption (references 5 and 6).

5.24 One problem is that of identifying the diversion routes. Another is that the progressive development of flooding may induce a cascade of traffic diversions as one road after another is closed. Further, standard volume-speed relationships are not intended for highly congested traffic, and their blind application can yield results which are not strictly applicable.

5.25 Where traffic disruption is likely to be severe and extend over a prolonged period, it may be more realistic (and more cost-effective for the appraisal) to equate the economic loss to the cost of reconstructing the road, or making sufficient improvements to alternative routes to avoid the cost of delays. This should be applied only where the present value is likely to be less than that of the long-term costs of disruption.

5.26 Disruption to rail networks can also give rise to substantial economic costs. The Flood Hazard Research centre provides guidance on how the economic costs of rail delays can be calculated (reference 5).

5.27 In addition to road and rail disruption, it is important to note that other types of transport may be also affected by flooding - air transport; and water (sea, estuary, river, canals) transport. In calculating the extent of impacts on these types of transport, the number, length and type of transport affected, and the number of passengers and/or freight carried should be considered, as well as whether there are alternative routes (either by the same transport type or other means).

5.28 Further to transport disruption, flooding may also lead to costly infrastructure losses, which should be considered in an analysis of transport impacts. Analysis should consider the type of infrastructure lost, the relative importance of the infrastructure (whether it is of local or national importance), whether the infrastructure will be affected temporarily or permanently (if infrastructure is affected temporarily, the duration of any affects should be taken into account).

5.29 Impacts on transport from flooding may also give rise to knock-on effects, such as 'social' impacts (e.g. health impacts or community disruption). These effects should be considered within appropriate categories. Any effects due to flooding of evacuation routes or infrastructure used in emergencies (e.g. airports or heliports) will also need to be captured.

5.30 Where impacts on transport are likely to be a significant factor in decision-making, appraisers should contact Transport Scotland for further guidance.

Agriculture

5.31 Flooding can impact significantly on agriculture and agricultural production. Defra has produced guidance on how to take account of options' impacts on agriculture (reference 7). The guidance outlines three scenarios typically encountered in flood protection scheme appraisals where land and agricultural output would need to be valued - where land is abandoned or no longer fit for agricultural use for the foreseeable future, where there are occasional losses of output as a result of flooding, and where agricultural output per hectare either falls or rises (a more permanent change in output than the occasional losses in second scenario) - and advises on the valuation approach in each scenario.

5.32 Where land is lost from agriculture, Defra recommends that the loss should be considered as the market value of the land less £600/ha to reflect single farm payment subsidies. Until a definitive measure is available for Scotland, appraisers should use the approach advocated by Defra and should give consideration to varying this assumed value as part of normal sensitivity analysis, to examine the influence of a change in this figure on the NPV and/or the benefit-cost ratio.

5.33 Additional guidance on the appraisal of flood risk management for agriculture is also provided by the Flood Hazard Research Centre (references 5 and 6). As recommended by the FHRC, appraisers should seek further guidance from the Scottish Government when valuing impacts on agricultural land for:

• high level strategic assessments
• large scale schemes of more than 10,000 ha; and
• Measures in agriculturally less favoured areas where there could be significant impacts on vulnerable farming communities and local economies.

Forestry

5.34 There is no readily available method for describing, quantifying or valuing the impact of flooding on production from forestry. Evidence shows that the tolerance of trees to flooding varies according to the nature of the flood event (timing, salinity, duration, velocity, sediment deposition). Newly planted trees and young trees are most likely to be vulnerable.

5.35 Forestry infrastructure (tracks, paths, bridges, culverts) may be damaged by flooding, and costs for repairing this infrastructure (and for clearing up wash-out of bankside trees) could be more significant than the damage to the trees themselves.

5.36 Any potentially significant impacts on forestry may need to be assessed through consultation with the forest managers and/or the Forestry Commission Scotland.

Other land use

5.37 The impact of flooding on land uses other should also be considered - for example, impacts on development, or regeneration land uses.

Land use development

5.38 Any benefits arising from providing flood protection to potential new land use development (including the intensification of existing land uses), should normally be excluded from the appraisal. The primary reason for this exclusion is to preclude Government funding of works which would enable land to be developed for private gain. Where works are proposed for economic regeneration or similar purposes, other sources of funding may be available. Where land has been identified for development though and agreements are in place, or where construction has been commenced, then damage to the proposed development can be taken into account in the appraisal. Brownfield sites should be valued on damages to their current use, except where full planning permission is in place. Whether the future development would increase risks should also be considered.

5.39 Social impacts may occur as knock-on effects from flooding, such as the loss of jobs - these should be considered within the assessment of social impacts. However, it is important to avoid including transfer payments in the assessment (when jobs lost in one area are replaced by jobs in another area)

Indirect impacts

Consumer losses

5.40 If a shop or factory is flooded, the company will lose sales and its customers may be inconvenienced. Potentially, therefore, there are two forms of indirect losses: to the consumer, and to the supplier. In general, the loss to the consumer is the economic loss; that to the supplier is usually financial rather than economic. If consumers can buy the same goods at the same cost from an alternative supplier immediately, there is no loss to them. If they have to make do with inferior goods or incur higher costs, there may then be an economic loss. However, it will only be appropriate to evaluate this in special circumstances; for example, where long-term loss of a rural retail outlet is likely to involve significant extra travel.

Supplier/Business losses

5.41 On the suppliers' side there may be impacts due to businesses being unable to obtain supplies, which affects production, or to distribute finished products, which affects distribution. If these impacts are countered by other shops or factories making up the consumers' purchases, this is simply a transfer unless those other shops or factories incur higher costs (Annex A). The sales lost by one company are gained by another. The only exception is when those purchases are made up by additional imports or lost exports. Indirect losses do not normally arise from disruption to commercial and retail activity because there are typically many alternative outlets offering the same services immediately. This need only be considered in exceptional circumstances, for example when highly specialised products are involved. The Environment Agency has produced multipliers (table 5.1), to be applied to direct damages, that allow indirect effects to be calculated in these cases (reference 8). These multipliers are based on previous research by the Flood Hazard Research Centre

Table 5.1 Indirect Impacts on Business Multipliers

Sector	Depth of flooding
	0.15m	0.3m	0.6m	1.0m
Manufacturing (to the nation)	0.17	0.10	0.11	0.13
Retail	0	0	0	0
Distribution (to the region)	0.67	0.35	0.23	0.11
Leisure	0	0	0	0

Source: Environment Agency Flood and Coastal Erosion Risk Management Appraisal Guidance: Supporting Document for the Appraisal Summary Table (ref. 8)

5.42 There may also be indirect impacts due to closure of businesses. Where a business is expected to close rather than relocate, there may be some knock on effects on trade. It may not be possible to estimate these damages in detail, but any potential significant effects should be recorded.

Socio-economic equity

5.43 A flood protection scheme might have differential impacts on individuals, depending on aspects such as their income. It may therefore be necessary to consider the question of social equity. This can be achieved through a 'Distributional Impacts ( DI)' analysis, which examines the distribution of costs or benefits of interventions across different income groups and social classes (reference 3).

5.44 If a decision is made to assess DI, appraisers should be aware of the principle of diminishing marginal utility of additional consumption, whereby the impact of a project on an individual's wellbeing may vary according to his or her income; the rationale being that an extra pound will give more benefit to a person on a low income compared to someone on a high income. In other words, as income rises, its marginal value reduces. Consequently, a loss of £1000 will matter more to someone on a low income. For flood protection schemes, DI analysis can be applied to the evaluated costs of avoided damage to residential property. The subsequent costs arising from the analysis may then be treated in the conventional manner.

5.45 The Treasury Green Book recommends that DI should be applied where it is necessary and practical to do so. Determining if it is 'necessary and practical', depends on a number of circumstances, including (i) whether a community at flood risk can be identified with reliable data and categorised according to their prosperity or social class; (ii) whether the assessment will contribute to an appraisal that demonstrates equity and fairness to people; and (iii) whether the time and effort in undertaking the assessment is proportional to the scale of the overall appraisal, either at a strategic or scheme level.

5.46 In addition, appraisers should consider whether they feel that in not undertaking the assessment, a strategy or scheme will still have an adverse differential impact on a particular group. A decision not to adjust explicitly for distributional impacts will require to be justified.

5.47 The following 2 steps set out the procedure for transposing the guidance on DI into flood protection investment:

Step 1 Analyse and understand the level of knowledge on the type, age and number of residential properties; the mix of social class groups and levels of income within an appraisal area. Take account of DI by following Step 2, if necessary and practical. If it is not necessary and practical, ignore Step 2 and use standard depth damage curves that focus on property type and age, only, without accounting for social class mix or income level.

Step 2 If proven necessary and practical, and good quality information is obtainable, Total Weighting Factors may be applied to social class group as shown in Table 5.2 below. Those for social class groups C1 and C2 will generally have a negligible effect on the DI assessment. Hence, this factor is only recommended where AB or DE social class groups are predominant. The factors may then be applied to adjust the standard depth-damage curves to obtain damages avoided taking account of DI.

In the interest of transparency, both weighted and unweighted results should be routinely presented. Where results are sensitive to any weighting adjustment, a sensitivity analysis should be provided.

5.48 Where the quality of available information permits, appraisers should take account of DI in homogeneous areas or areas with a high proportion of rented accommodation. For the latter, the income level or class of the owner of the property should be used for assessing building damages, and that of the occupier used for the contents damages. The approach in Step 2 is suggested, but again only if a DI assessment is necessary and practical.

Table 5.2 Total Weighted Factors by social class group

Social class group	Total Weighted Factors
AB	0.74
C1	1.12
C2	1.22
DE	1.64

Source: Defra Flood and Coastal Defence Project Appraisal Guidance, FCDPAG 3 Economic Appraisal, Supplementary Note to Operating Authorities. Revisions to Economic Appraisal on: Reflecting socio-economic equity in appraisal, and Appraisal of human related intangible impacts of flooding
(ref. 9)

Environmental Impacts

5.49 Whether valued in monetary terms or not, environmental impacts should always be assessed. While in many cases sensitively designed schemes can make a significant contribution to the environment, there will often be choices to be made. It is probable that all the 'do something' options and the 'do nothing' option will have significant environmental consequences, positive or negative. Consequently, it is important to hold early consultations to establish environmental requirements and, in particular, legislative drivers. In some cases, protecting one site may have consequences for another, and a decision will have to be made on their relative values. In other cases, environmental losses may be unavoidable, for example, in reducing the risk of loss of life. However, an auditable record of the assessment and decision-making process will be required.

5.50 Where such choices have to be made, and in a number of other situations, it may be appropriate to place an explicit economic value on an environmental site or asset, in addition to any associated recreational value. Guidance on assessing environmental impacts of flood risk management actions is available from the Flood Hazard Research Centre (references 5 and 6).

5.51 A proposed flood protection scheme will require an environmental impact assessment ( EIA) to:

• assess the environmental implications of the scheme;
• contribute to the design to minimise the adverse effects;
• identify additional measures that may be required to further reduce adverse effects;
• identify opportunities for providing environmental benefits

Note that the baseline for option appraisal is not the same as and should not be confused with baseline information gathered for the purpose of an EIA though some of the information gathered at this stage in project appraisal will be relevant to the EIA process.

Ecosystem services

5.52 An ecosystem services approach allows for multiple and various possible impacts on the environment to be taken into account within a single broad framework, where environmental effects relate to a loss or gain of one, a group, or all of the services of the ecosystems. The ecosystem services approach categorises the various environmental services and goods the people gain from the environment according to four categories - provisioning services, regulating services, cultural services, and supporting service. Care must be taken to avoid double counting the services which are part of a suite of primary processes (particularly supporting services) (reference 10).

5.53 Eftec have produced a handbook on the Economic Valuation of Environmental Effects for the Environment Agency (reference 11). The handbook provides a framework for the use of the ecosystem services approach to consider the majority of potential environmental impacts. The framework advocates a proportionate approach to assessing environmental impacts, and principally focuses on value transfer as a method to provide monetary estimates of environmental impacts.

5.54 The handbook should be used to highlight the number and range of benefits provided by ecosystems. Advice should be sought from relevant expert bodies (e.g. SEPA, SNH) to determine where there may be negative impacts (for example, due to a change in habitat). The handbook should then be used to determine whether to value changes in services monetarily and whether it is appropriate to follow the ecosystem services framework.

5.55 The ecosystem service approach include the consideration of impacts on landscape. For the context of appraisal of flood protection schemes 'landscape' encompasses all the external environment including cities, towns, villages and the wider countryside. It is a combination of the visual dimension with other factors including geology, topography, soils, cultural heritage, land use, ecology, and architecture which together determine its overall character. It is therefore part of our natural, social, and cultural heritage resource base in both urban and rural areas. Landscape is also dynamic, continually evolving in response to natural or man-induced processes.

5.56 Guidelines on assessing the landscape and the visual impacts of development projects are available from the Landscape Institute (at a cost): (reference 13). Issues covered by the guidelines include: integration of landscape and visual issues into the development process; the need for a transparent approach to landscape and visual impact assessment; describing the baseline conditions; determining the magnitude and significance of impacts; and reviewing the landscape and visual components of an Environmental Impact Assessment.

5.57 Strong links are needed to the environmental impact assessment when describing impacts on landscape. You should also consider consulting landscape specialists and engaging with local communities when describing impacts on the landscape. There may be significant overlaps with social impacts such as sense of belonging, sense of place.

Greenhouse gas emissions

5.58 The impact of the proposed option on the emission on greenhouse gases should be assessed and valued following the Department of Energy and Climate Change guidance on valuation or energy use and greenhouse gas emissions for appraisal and evaluations (reference 14). The assessment should include the greenhouse gas emissions that are associated with construction and land use change, and those associated with impacts following flooding or coastal erosion through the need for maintenance, repair (both of defences and flooded assets) and emergency management. It is the balance of the two that needs to be considered, particularly when comparing options that would provide different levels of risk management or where options involve significantly different on-going operation and maintenance costs.

Social Impacts

5.59 Flooding can have a wide variety of social impacts (including impacts on human health, community, and cultural heritage) which should be taken into account in project appraisals. A large amount of information on the social impacts of flooding in Scotland can be found in Werritty et al. (reference 15).

5.60 The specific social impacts in any community can be determined through include engagement with affected communities to discuss the impacts of options, drawing on their local knowledge to provide insight into the negative and positive impacts (linking to the Stakeholder Engagement Plan as the planning and delivery tool for engagement). Local authority social services, community groups and the voluntary sector may also be able to help describe and quantify the impacts.

Human health and well-being

5.61 Health is a state of complete physical, mental, social and spiritual wellbeing and not merely the absence of disease or infirmity. Disruption to infrastructure and services can have an impact in terms of health, stress and the community. Flooding can lead to loss of life - Defra provide guidance on valuing risk of loss of life from flooding events (reference 16).

5.62 Flooding can also cause disruption to family life which can be significant and last for many months, affecting family relationships. There may also be risks to health and well-being during recovery periods following floods. For example, there may be impacts due to the strain of recovery (for example, heart attacks due to clean-up), and there can be health effects due to exposure to carbon monoxide as a result of the use of equipment for drying out buildings.

5.63 Disruptions to water supplies and/or sewerage systems can also cause health risks - it is important that the need for adequate sanitation to prevent disease/illness be taken into account. Disruption of water supplies or sewerage systems may also cause mental as well as physical health issues (i.e. stress). Similarly, flooding of a care home may have knock-on effects for the nearby hospital and, at the same time, flooding of the hospital could have significant health consequences for residents of the care home. Such impacts need to be considered and described. This may require consultation with operators and owners of infrastructure and such impacts should be considered when describing the economic effects associated with impacts on infrastructure.

5.64 The long-term health impacts of flooding may be significant, especially for vulnerable households. Guidance provided by Defra (reference 9) indicates that the value of avoiding the health impacts of fluvial flooding is of the order of £200 per year per household. This is a weighted average derived from a wide range of responses. Defra also provides a risk reduction matrix which can be used to calculate the value of health related benefits for different standards of scheme protection (table 5.3). For example, the highlighted figure of £188 in the table represents the annual health related damages avoided, and hence the benefit per annum, per household, in moving from a pre-scheme situation with 0.05% AEP to a scheme with 0.01% AEP.

5.65 For areas of uniform flood risk, such as housing on level ground, damages are based on common standards of defence. Having identified the standards of protection before and after an option is implemented, Table 5.3 can be used to derive the annual benefit per household of avoiding health impacts of flooding. This can be applied to the total number of households (or residential properties) in the area to give the overall annual health benefits for a particular option. In areas where the risk varies greatly, such as sloping ground away from a river, damages are based on individual levels of property flood risk. This will require banding of the areas into different levels of existing protection, and the identification of the standards of protection being offered by the scheme to each band area. The table can then be used to evaluate the benefits for the properties within each band.

5.66 The figures in Table 5.3 already take account of distributional impacts. Consequently, a DI analysis should not be applied to the results arising from the appraisal of intangible impacts.

Table 5.3 Intangible benefits associated with flood defence improvements (£ per annum per household) for different standards of protection (SoP)

SoP before scheme	% AEP (return period)	SoP after scheme
		0.007 (150)	0.008 (125)	0.010 (100)	0.013 (75)	0.020 (50)	0.033 (30)	0.05 (20)	0.1 (10)
	1 (1)	£218	£215	£200	£153	£73	£25	£12	£5
	0.1 (10)	£214	£210	£195	£148	£68	£21	£8	£0
	0.05 (20)	£206	£202	£188	£141	£60	£13	£0
	0.033 (30)	£193	£189	£175	£128	£47	£0
	0.020 (50)	£145	£142	£127	£80	£0
	0.013 (75)	£65	£62	£47	£0
	0.010 (100)	£18	£15	£0
	0.008 (125)	£4	£0

Source: Defra Flood and Coastal Defence Project Appraisal Guidance, FCDPAG 3 Economic Appraisal, Supplementary Note to Operating Authorities. Revisions to Economic Appraisal on: Reflecting socio-economic equity in appraisal, and Appraisal of human related intangible impacts of flooding (ref. 9)

Way of life

Recreation

5.67 Flooding can impact greatly on people's way of life - that is, on how people live, work, play and interact with one another on a day-to-day basis. When taking account of impacts on way of life in appraisals, particular focus should be given to impacts on recreation. In addition to the guidance below on taking account of impacts on recreation, further advice on considering such impacts is provided by the Flood Hazard Research Centre (references 5 and 6).

5.68 Flood protection schemes may affect the value of a river or coastal reach for recreational uses, including angling and informal recreation. Any significant associated gains or losses should, as far as possible, be included in the cost-benefit analysis. Where only marginal changes in recreation or amenity are likely, such valuations will seldom be worthwhile. If a scheme relies on a substantial element of recreational benefit for its justification, it should be treated as a multi-functional project ( paragraphs 2.21-2.23).

5.69 The benefits of avoiding a loss in recreational value, or an increase in such value, can be calculated by (i) estimating the number of visits made to the site, and (ii) multiplying this by the change in the value of enjoyment per visit.

5.70 Thus, the number of visits made to a site is a primary indicator of the likely magnitude of the benefits. If there are no visitors, there are no benefits. Therefore, any analysis should start with a preliminary estimate of the number of visits made by adults. For rivers, where the number of visits is small, the estimates given in, for example, the Foundation for Water Research manual on the benefits of surface water quality improvement can be used to estimate the order of magnitude of the recreational benefits (reference 17).

5.71 Where no comparable estimates of the annual number of visits to different types of site have been compiled, the simpler methods shown in Table 5.4 will have to be used. Early thought should be given to accurate estimation of the number of visits. The methods shown in the table are in decreasing order of accuracy.

Table 5.4 Methods of visitor estimation

Method	Comments
Long period counts using people counters	A number of infrared, or other automatic, counters are installed at least over the period of March to September in one year. The counters are manually calibrated; interview surveys are conducted to determine statistically how the number of adult visits relates to the number of passages recorded on a given day. An annual growth curve is then used to derive an estimate of the total number of adult visits made in that year.
Short period count	Counts are undertaken by hand over a period of days. An annual growth curve is then used to derive an estimate of the total number of adult visits made in that year.
Inferred estimate	The counted number of visits made to a related site (eg a car park or museum) is used to infer how many visits are made to the site. This requires estimating what proportion of all visitors to the site also visit the site for which counts are available.
Visitor equation	A number of equations have been developed which predict distance-frequency functions so that from census data on the population in different zones, a prediction can be made as to the number of visits generated by a site.
Informed estimate	The estimate of an informed person (eg car park attendant, park ranger) as to the number of adults visiting the site.
Average number of visits to equivalent sites	This benefit transfer approach is only suitable for prefeasibility and strategic studies. The number of adult visits made to the site is estimated as being of the same order as the number of visits made to an equivalent site. However, there are few sites for which good data are available and little research to enable the reliable identification of an 'equivalent' site.

5.72 Where recreational value is a significant part of the total benefits, a contingent valuation study may be necessary to derive a site-specific value of enjoyment. Some of the considerations for such studies are listed in Annex B. However, the difficulties and expense should not be underestimated.

Disruption

5.73 Disruption of way of life may be a significant impact for consideration in appraisal. A partial measure of the disruption resulting from flooding can be given by the cost of renting a home equivalent to the one flooded, together with the cost of accelerating the drying-out process.

5.74 About 50% of households are vacated for an average of 30 days when flooding exceeds 30 centimetres (reference 18). Werritty et al. (reference 15) found that 45% of flooded households were unable to stay in their home for 6 months or more after the event (the depth of flooding for these households is not provided). The use of dehumidifier units is the best method of drying out properties, and hence of enabling repairs and redecoration. The rental of such units reduces the losses that would otherwise occur. The number of dehumidifiers required depends on the size of the property. Rental and electricity rates are used to calculate the costs. On average, two to three dehumidifier units are required for a period of three to four weeks.

Community

5.75 Flooding can impact on the sense of community in the affected area - its cohesion, stability, character, services and facilities. This could include population changes (or predicted population changes) drawing on trends in population that could affect how impacts change over time. If flooding results in properties being lost, this may affect the settlement's ability to support its services. Over time, the services (such as schools, post office, shop, pub and church - which may also be a heritage asset) could be lost which would further affect the community and its activities. This could have knock-on impacts on culture, way of life and future aspirations.

Cultural heritage

5.76 Flooding may impact on cultural heritage, which includes: palaeo-environmental and geo-archaeological remains (as indicators of past climates, vegetational and landscape change); archaeological remains (including wrecks); historic buildings, parks and gardens; and historic landscapes.

5.77 Cultural heritage can be difficult to appraise as it includes not only the heritage assets that can be seen (such as World Heritage Sites, scheduled monuments, listed buildings, Scheduled Monuments and Listed Buildings), but also their context and relationships (for example, Conservation Areas). Cultural heritage also includes those traces of human history that have not yet been discovered (so-called unknown archaeology). While it can be relatively straightforward to assess the impacts on what can be seen, the potential effects on unknown archaeology often have to rely on archaeological potential.

5.78 Appraisal of impacts on cultural heritage should consider: impacts on the physical assets themselves; impacts on their setting; impacts on their inter-relationships with other historical assets; and impacts on areas where there may not be any known physical assets but where there is potential for archaeological finds (including where any works could disrupt or damage hidden archaeology).

5.79 Where monetisation of the impacts is considered appropriate, it is likely to be worthwhile discussing with Historic Scotland (and any other responsible organisations) what they would consider to be the most appropriate approach. This may help with better understanding of the likely uncertainties, which can then be tested in the sensitivity analysis.

5.80 In general the least contentious and lowest cost method of deriving a proxy for the lower bound economic value of impacts on a heritage asset as a result of a flood or coastal erosion risk management scheme can be taken as the lowest of:

• the cost of relocating a structure to another site (relocation loses the setting of the feature so some negative impacts may remain); or
• the cost of local protection (e.g. a local flood embankment around a heritage asset);
• the costs involved in excavation and recording of an archaeological site; or
• other mitigation measures.

5.81 The use of such proxy values, however, will depend on there being broad agreement that the value of the asset in question is at least equal to the lowest of these figures. You should consult with appropriate specialists if using these approaches. For example, a specialist building surveyor may be able to provide costs associated with rebuilding a historic building. In certain exceptional circumstances, such economic valuations may not be appropriate. For example, an unusually high value may be placed on a feature specifically because of its particular position, and the cost of relocation could omit the particular heritage or cultural value of the feature within its existing context. There may also be some doubt as to whether the heritage value of a structure could really justify the high cost of its relocation. In such cases it may be necessary to obtain a valuation using other monetary based techniques as described in Annex B, or to apply other decision-making techniques. There may also be benefits transfer values available that can be used to monetise impacts on cultural heritage.

5.82 Figure 5.1 shows a decision tree, using the above approach, for the determination of minimum economic values in relation to heritage sites.

Figure 5.1 Decision tree for appraising proxy economic values of heritage sites at risk of loss or damage