4. Choose an appraisal type and start your project

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Environment Agency

September 11

08:55 2024

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There are 5 types of appraisal:

3 use cost benefit analysis (CBA) this compares benefits and costs to identify the impact of different options on overall welfare
2 use 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.

If you use the right appraisal type, your project will achieve successful outcomes that maximise the opportunities available when investing in FCERM for the community, the economy.

When to use each appraisal type

The table describes the 5 types of FCERM appraisal, when to use them and how to approach the appraisal.

Type of project	Description	Approach to appraisal
Legal obligation	Projects whose main purpose is to fulfil legal obligations	You should carry out a detailed appraisal but with a limited set of objectives and options designed to meet legal obligations. Identify the least-cost option which meets the objectives using CEA. Value for money is shown using a high-level assessments of benefits.
Sustain standard of service (SOS)	Projects where there is no need to change the current FCERM approach	You should carry out a detailed appraisal but with a limited set of objectives and options designed to sustain SOS. Identify the least-cost option which meets the objectives using CEA. Value for money is shown using a high-level assessments of benefits.
Supported change	Projects to implement schemes within an approved FCERM strategy	You should use findings from the supporting strategy, making updates only where needed. Identify the preferred option using CBA.
Simple change	Standalone projects where an FCERM strategy is not required	You should carry out a proportionate appraisal with all parts of the appraisal guidance applied. Identify the preferred option using CBA.
Complex change	Complex change projects to produce an FCERM strategy	You should carry out a detailed appraisal with all parts of appraisal guidance applied to multiple FCERM problems across a large, interconnected area. Identify the preferred option using CBA.

Proceed with an indicative choice

Your appraisal should be proportionate to project development stage and the decisions needed. The earliest stages of your project will be based upon assumptions and good judgement. You should then review and update these as more information is available.

You may not be able to confirm your appraisal until you have worked with others to sufficiently define the project, its scope and set its objectives. This means you should plan and begin with an indicative choice and work through section 5 and section 6 of the appraisal guidance before confirming your project type through the activities in section 7.

An appraisal type selector tool is provided on the Environment Agency SharePoint site for Supporting Flood and Coast Projects. It helps you quickly identify the right appraisal type in most FCERM circumstances.

If you used good judgement and information to choose your initial project type it is likely to remain correct. However, you must remain open to change during the early development stages. New information from stakeholders or local partners could present opportunities you were not aware of during early feasibility. These could be critical to the success of your project and avoid missed opportunities.

Read the full technical guidance

If you need to understand the full technical content you should see section 4 choose an appraisal type in the FCERM technical guidance

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