7. Identify the type of project and set the project baseline
This section describes how you can identify the right project type for your project's circumstances. It also describes the different project baselines and which one applies to your chosen type of project.
You may have used best available information and started your appraisal based on an indicative choice of project type. That will mean that after following sections 5 and 6 in the appraisal guidance you will have:
- improved your understanding
- updated the problem your project must address and its objectives
You must now confirm the project type on which to proceed.
Why choosing the right project type is important
Choosing the right project type will allow you to:
- focus on only that work which is necessary
- save time and cost in project development
- make sure opportunities for the community and local partners are maximised
- manage well the expectations of all those involved
This section will help you make the right indicative choice of project type ff you’re doing an early stage feasibility appraisal so you can submit a proposal for the FCERM programme. This will make sure you scope your proposal well and give the future project and its partners a good start.
You will chose the appraisal needs and project objectives from previous appraisal stages to define your project type.
Understand the types of appraisal project
There are 5 types of appraisal project.
They use one of 2 different ways of comparing options:
- Cost benefit analysis (CBA) – this compares benefits and costs to identify the impact of different options on overall welfare
- Cost effectiveness analysis (CEA) – this compares the costs of alternative ways of producing the same or similar outcomes. You should use a CEA when the outcomes are the same for all options.
See the table for a summary of the 5 project types and their approach to appraisal.
| Type of project | Approach to appraisal |
|---|---|
| Projects whose main purpose is to fulfil legal obligations | Detailed appraisal but with a limited set of objectives and options designed to meet legal obligations. Identifies least-cost option which meets the objectives using CEA. Value for money is shown using a high-level assessments of benefits. |
| Sustain SOS projects where there is no need to change the current FCERM approach | Detailed appraisal but with a limited set of objectives and options designed to sustain SOS. Identifies least-cost option which meets the objectives using CEA. Value for money is shown using a high-level assessments of benefits. |
| Supported change project to implement schemes within an approved FCERM strategy | Uses findings from the supporting strategy, making updates only where needed. Use CBA to confirm the preferred option. |
| Simple change project - a standalone project, where an FCERM strategy is not needed | Proportionate appraisal with all parts of the appraisal guidance applied. Use CBA to identify the preferred option. |
| Complex change project to produce an FCERM strategy | Detailed appraisal with all parts of appraisal guidance applied to multiple FCERM problems across a large interconnected area. Use CBA to identify the preferred option. |
An appraisal type selector tool is provided on the Environment Agency SharePoint site for Supporting Flood and Coast Projects. It quickly enables you to identify the right appraisal type in most FCERM circumstances.
Check if you need a strategy review
You must confirm that any local FCERM strategy you’re going to use remains relevant and valid before you use it to support your project. This means that its approach to FCERM should still align with the National FCERM Strategy, its objectives still fit the local needs and it continues to meet its CSFs. If it was agreed more than 10 years ago it’s very likely to need a review.
Your local Environment Agency contact will be able to help you make this decision and agree a proportionate way to do the work. The necessary review may be simple or more fundamental. You can avoid a significant delay to your project by checking its status.
Check if you need a framework for action
You may need to use a complex change project. This type of project will allow you to assess multiple FCERM problems across a large, interconnected area. You will be able to combine smaller scale localised solutions with others benefiting multiple locations. The product will be a local FCERM strategy.
It can take years to develop a local FCERM strategy with stakeholders and local partners. During this time you may need to protect lives or assets from unacceptable risks.
You should use a framework for action so that any interim works do not affect the activities of the strategy and its long-term opportunities. The interim work can then proceed using either legal obligation or sustain SOS project types, or whichever is most appropriate for those works.
Email fcrm_investment@environment-agency.gov.uk if you think you may need to use a framework for action.
Define the economic baseline
You will need to use a different economic baseline depending on your choice of project type. The table explains which baseline you should use.
| Type of project | Economic approach and baseline |
|---|---|
| Projects whose main purpose is to fulfil legal obligations | Use CEA and the legal minimum baseline, which is the minimum you must do to meet legal obligations for FCERM. |
| Sustain SOS projects where there is no need to change the current FCERM approach | Use CEA and the sustain SOS baseline, which is the least cost action required to meet the SOS in the agreed AMP. |
| Supported change project to implement schemes within an approved FCERM strategy | Use CBA and the do-nothing baseline, which means no FCERM action is taken. |
| Simple change project - a standalone project, where an FCERM strategy | Use CBA and the do-nothing baseline, which means no FCERM action is taken. |
| Complex change project to produce an FCERM strategy | Use CBA and the do-nothing baseline, which means no FCERM action is taken. |
Apply the baseline to your project
When you have confirmed your project type and baseline you should check your definition of the problem and update it if needed.
This check should include:
- the assumptions you made about what FCERM would continue
- how risk changes over time
- refinements to your project boundaries or appraisal period
You may justify some additional analysis to improve key information. You should involve your stakeholders and local partners. Their knowledge may help your review and you must share any changes to the problem definition.
Inputs to defining your project type and baseline
From the previous stages of appraisal, you need:
- your problem definition
- the objectives and CSFs you set for your project
- your updated SEP
Checkpoints to defining your project type and baseline
You must check that you have identified the correct type of project.
This means you can confirm:
- the status, source and details of any specific legal obligations that dictate requirements for your FCERM project
and that
- they cannot be reasonably overcome, rescinded or bought-out and that:
- the costs of compliance likely outweigh the implications of not
- that your local FCERM strategy is valid and remains current or that a review will be done before using it to support your project
- whether you require a framework for action
- that your plans are consistent with a valid AMP and follow the general principles of this guidance including for costs and benefits
Outputs to defining your project type and baseline
By this end of this stage, you should have:
- identified the appropriate appraisal type
- defined your baseline
- reviewed your definition of the problem and objectives in light of confirming your project type and baseline
- confirmed the outcome to your stakeholders and local partners
- informed your needs of environmental assessment
Read the full technical guidance
If you need to understand the full technical content you should see section 7 – define the type of appraisal project and set the project baseline in the FCERM technical guidance.