The British government has issued new guidelines on project design and evaluation to better understand the impact of public projects on social inequality. In doing so, the government wants to ensure that public investment makes the greatest contribution to it. ‘Upgrading” and climate change mitigation agendas. Both agendas are particularly relevant to coastal communities in the UK.
So far, it is often difficult to measure and integrate social impacts and their distribution in the socio-economic assessment of natural flood control and coastal habitat creation projects. This is due to the lack of evidence, insufficient attention to guidance documents, and the location-specific nature of each restoration program. As a result, national studies sometimes show that the social return on investment (SROI) provided by natural coastal restoration is low, although evidence to the contrary is provided in many project-level assessments.
The flood protection facilities south of Kessingland Village in Suffolk are only a few years away from a serious failure. If no action is taken, many private residential properties, businesses and large tracts of farmland will be at risk of flooding. This report assesses the socio-economic impact of the proposed flood and coastal erosion risk management (FCERM) and habitat creation plan. It uses techniques recently added to the government’s Green Paper Evaluation Guidelines, including welfare weighting and distribution analysis, to more fully portray the potential value of the program to local communities and show how nature-based interventions can achieve the government’s upgrade agenda.
The analysis was drawn through the participation of local residents and project partners. These participations inspired the creation of new intervention scenarios, here is ‘Enhancing the scene”. The name refers to a project design that aims to maximize local social value by providing high-quality public passages, convenience facilities, educational facilities and new income-generating opportunities in the local area.
Then assess the socioeconomic impact of the enhancement scenario in four new outcome areas: (i) increased local spending, (ii) health and well-being benefits, and (iii) increased exposure to nature and green space for education benefits, and (iv ) Increase tourism revenue potential.
Analysis by the New Economy Foundation (NEF) shows that families near the proposed intervention are far below the national and regional averages in terms of multiple determinants of well-being, including income, health, and green space supply. Therefore, the welfare weighting is used to reflect the marginal utility of the improvement that increases proportionally under the following three evaluation results: (i) increased local expenditure, (ii) health and well-being benefits, and (iii) education benefits.
The project’s net present value (NPV) in all four socio-economic outcome areas is estimated (over a 20-year period) of £6 million to £9.5 million after benefit-weighting. The welfare-weighted portion of these estimates is equivalent to £870,000 to £1.6 million (approximately 15%) of the socio-economic value created. This may be seen as the upgrade potential of the plan.
Our model implies that the new NPV of the overall plan return (before replacement) is GBP 37.6 million to GBP 41.1 million, which is higher than the GBP 31.6 million determined by Jacobs in his more traditional FCERM assessment. 1 If a 100% replacement of expenditures and tourism flows (worst-case assumptions) is assumed, the total planned benefits are estimated at 35.3 million to 36.7 million pounds.
If the result area (mainly property flood control) determined by the previous study is included in the other local interests of the plan, the total social and economic benefits of the local public and local enterprises are estimated to be equivalent to about 38.6% of the total plan revenue. It is estimated that there will be 52.9% of the total. The planned benefits will be generated at the regional level, and the rest (8.5%) will be generated at the national research level.
This allocation breakdown can support project stakeholders to determine the appropriate allocation and sources of planned investment financing. The report also discussed how to further increase the local socio-economic value of the program by exploring ways to increase the local economic multiplier from the program’s expenditures. For example, pursuing local social value in the terms and conditions of purchase, determining the ownership of the site in the local community, and taking local social value and ownership as the goal of long-term funding arrangements, such as donations and empowering development.
Through our case study in Kessingland, we have demonstrated that nature-based flood control should be seen as a broader economic asset that has the potential to affect outcomes in areas such as health, local economic development, inequality, and social deprivation. We also show that a broader social impact assessment of nature-based interventions may significantly improve the performance of such assessment programs, thereby increasing their ability to attract capital and promoting their contribution to the UK’s decarbonization agenda. Our research emphasizes that the new development of the UK Treasury’s assessment guidelines, if applied strictly at the local planning and departmental level, may bring new enlightenment to the upgrade potential of government investment.
picture: Mark Seton (CC BY-NC-ND 2.0)
