Transparency data

16 February 2022: Bridgwater Tidal Barrier Project accounting officer assessment

Updated 5 October 2023

Background and context

Bridgwater in Somerset lies on the estuary of the River Parrett 17km upstream of the Severn Estuary. In 2014 an annual event probability (AEP) of only 5 to 10% saw the Parrett come within 0.15 metres of flooding the town. Another near miss occurred in 2020. By 2055 sea levels in the Severn Estuary are projected to rise by 0.3 to 0.4m, reducing the standard of protection to 20% AEP. Furthermore, there is concern that overtopping causes sections of river wall to collapse on the receding tide due to differential water pressure as happened without warning in 2011.

The Parrett Estuary Flood Risk Management (FRM) Strategy recommends upgrading defences to mitigate for a rise in sea level and then constructing a tidal surge barrier across the River Parrett between 2030 and 2050. However, the Somerset Levels and Moors Flood Action Plan includes an objective to deliver the barrier by 2024. Bridgwater is the focus for accelerated housing growth, supporting the new nuclear build at Hinkley Point C.

Led by the Environment Agency in partnership with Sedgemoor District Council (SDC), this project will provide a 0.5% AEP protection to 11,300 houses, 1500 businesses, the A38 and M5 road corridor, mainline rail link, Bridgwater Police Centre and Hinkley Point C construction park and ride. The Defra Secretary of State will be asked to approve a Transport Works Act order as the barrier will interfere with the right to navigation. The present value benefits over the 100-year appraisal period are £1,522 million and the benefit cost ratio is 13.7. SDC has already secured more than £5 million of developer contribution and has acquired the land needed.

This assessment was made at the Outline Business Case (OBC) stage on 10 March 2021.

Assessment against the accounting officer tests

Regularity

The enhanced scheme cost exceeds the Environment Agency and Defra delegated authority from HM Treasury (above £100 million whole life costs). Investment requires business case approval from HM Treasury to ensure compliance with Managing Public Money.

In promoting the project the EA has responsibilities under the Flood and Water Management Act 2010 (FWMA) and Water Resources Act (WRA). Section 165 of the WRA gives the EA the power to carry out “flood risk management work” if the EA considers the work desirable having regard to the national flood and coastal erosion risk management strategies under Section 7 and 8 of the FWMA and that the purpose of the work is to manage a flood risk (within the meaning of the act) from the sea or a main river.

Rights of navigation on the Parrett dictate that a Transport Works Act (TWA) order is required to promote the project. The order includes deemed planning for the scheme and public rights of way closures and diversions. The TWA application was submitted to Defra in 2019. Defra advised their intention to hold a process of written representations to examine the scheme in the light of the remaining objections and representations. The written representations process was concluded in January 2021. Defra is reviewing responses before taking a decision on the next steps. There is no timetable or time limit for the determination process. [February 2022 update – The Secretary of State for Environment, Food and Rural Affairs announced approval for the TWA Order on 19 January 2022. The Order Document itself is expected by March 2022]

There are a number of designated areas towards the mouth of the River Parrett which may be affected by the barrier and flood defence works. Designations include the Severn Estuary Special Area of Conservation (SAC), Special Protection Area (SPA) and Ramsar, and the Bridgwater Bay Site of Special Scientific Interest (SSSI). The project, with mitigation proposed, is not expected to lead to any adverse effects on site integrity in relation to any of the qualifying features of any European Sites, either alone or in-combination with other plans or projects. This has been agreed with Natural England.

In accordance with the Town and Country Planning (Environmental Impact Assessment) Regulations 2017 (the ‘2017 Regulations’) and The Marine Works (Environmental Impact Assessment) (Amendment) Regulations 2017, an Environmental Statement was submitted in support of the TWA application.

A Water Framework Directive (WFD) compliance assessment concludes that the effects of the barrier structure are not anticipated to cause deterioration in the status of any classified elements.

In 2020 we applied to the Marine Management Organisation for consent to undertake flood defence works below mean high water springs. Consent was also requested from the Crown Estate.

Protected species licenses, an environmental permit and agreements with land owners will be required.

Overall assessment

The test is met for this OBC stage.

Propriety

There are no specific concerns that the project is outside of Parliament’s intentions. The business case demonstrates alignment with the Defra Policy statement “Appraisal of Flood and Coastal Erosion Risk Management, 2009”. Public funding from grant in aid follows the principles in the Defra policy statement “Flood and Coastal Resilience Partnership Funding: 2020”.

The long term operational and maintenance funding requirement falls to the EA and provision will be made in the revenue budget. This includes the removal of silt immediately up and down stream of the Barrier.

Overall assessment

The test is met for this OBC stage.

Value for money

Economic appraisal was undertaken in accordance with the Flood and Coastal Erosion Risk Management Appraisal Guidance (EA 2010) including supplementary guidance notes. The guidance follows the provisions of the HM Treasury Green Book. The OBC appraises a short list of 4 options derived from a long list of 19 options considered during development of the Parrett Estuary FRM Strategy.

The 4 options were :

• do nothing
• do minimum (routing maintenance)
• maintaining and replacing existing defences
• a tidal surge barrier with flood defenses

The preferred option is a tidal barrier and improvements to flood defences downstream of the barrier.

The Parrett Estuary FRM Strategy identified the economic optimum year of 2046 to construct the Barrier. Reasons for bringing this forward are, strong BCR for construction before 2030, flooding near miss in 2014 and 2020, sudden collapse of river wall in 2011 and numerous repairs since and funding partners are committed to investing in the project now and have made land available for the Barrier.

Cost estimates include a risk contingency based on 10% Optimism Bias plus a statistical evaluation of the risk register amounting to a total of 40% of the base cost which is conservative at OBC stage. The preferred option demonstrates a cost benefit ratio of 11.2 against the do-nothing option and 5 against the do-minimum option. The Net Present Value is £1.4 billion. Sensitivity tests demonstrate that the choice of option is robust. In addition, the project is committed to making efficiency savings that support the overall six year investment programme target of 15%.

The project will result in 11,300 homes being better protected against the risk of flooding.

Overall assessment

The test is met for this OBC stage.

Feasibility

The contracting authority for this procurement will be the Environment Agency, subject to the Public Contract Regulations 2015. SDC are project partners subject to a collaboration agreement. The Environment Agency has the appropriate technical, operational, project management and commercial expertise, combined with access to and familiarity with the flood risk management supply chain.

The project will be procured in line with the principles of the Government Construction Strategy and the Environment Agency Sustainable Engineering Procurement Strategy. Lessons from similar projects including Ipswich, Boston and Hull barriers have heavily influenced the approach together with significant market sounding undertaken with both first and second tier supply chains.

The preferred contract option is design first then build. This option gives control of the design of critical elements of the scheme whilst allowing supplier innovation on less critical elements. The option also reduces the risk of scope change during construction and provides greater certainty of outturn programme and cost.

The project will be delivered using the Environment Agency Collaborative Delivery Framework, Client Support Framework, National Estates Framework and Crown Commercial Services. Sufficient resources are available.

The OBC is scheduled to be approved by HMT in the autumn of 2021 and the FBC in summer 2023. The schedule is realistic.

The project is included in the government major project portfolio (GMPP) and reports to the Infrastructure Projects Authority each quarter.

Overall assessment

The test is met for this OBC stage.

Affordability

Funding is from the following secured sources, sufficient to deliver the capital scheme:

• Flood Defence Grant in Aid (FDGiA) - £102.65 million
• SDC – £25.82 million
• Heart of the South West LEP – £2 million
• EA Local Levy - £4 million
• Somerset Rivers Authority – £2.1 million
• Department for Education – £0.3 million

Contingency is the sum of the provision for risk (P95) which is £27.5 million and optimism bias which is £10 million. This represents 40% of the post-FBC costs and is conservative at OBC stage. The contingency must account for residual risks and uncertainties that include:

• potential variations in material costs
• unforeseen ground conditions at the Barrier site and downstream defence locations
• design development
• temporary works at Barrier site including highway diversions
• environmental constraints
• license conditions

An allowance for inflation of £7.3 million applies to the 4 year implementation period in accordance with the Green Book.

Overall assessment

The test is met for this OBC stage.

Conclusion

The Defra Investment Committee have authority for recommending the submission of major project business cases for final approval by HM Treasury. This authority is delegated from both the Defra and the Environment Agency Accounting Officers. The Defra Investment Committee recommended this accounting officer assessment on 21 April 2021.

Tamara Finkelstein

16 February 2022