Flood option appraisal, cost–benefit analysis and co-financing
On one consistent basis, an earth bund at Hamstall Ridware has benefits worth about 4.6 times its cost, against 1.6 for a flood wall and 1.0 for an embankment. That is my own screening appraisal. The farmers later built a bund of their own; its design and cost were not recorded. In London I supported three council-led schemes with an estimated value of over US$5.2m.
Real model output: the 2022 Flood Modeller 2D run at Hamstall Ridware: the 1-in-100-year flood plus 29% for climate change, the design flood the defence options were appraised against. 149 ha at its peak; replayed, not to time scale. How to read this: drag the slider to move through the flood.
Animated map: in the 2022 model of a 1% AEP flood with a 29% climate allowance, water spreads over 79 hours to cover 149 hectares of the River Blithe and Trent floodplain at Hamstall Ridware, Staffordshire.
- benefit–cost ratio of an earth bund at Hamstall on one consistent basis (3.3–7.0 across unit rates)
- about4.6
- estimated value of the three council-led flood schemes I supported in London, 2023–25
- over US$5.2m
- estimated value of the pumping-station refurbishment where I was support project manager
- est. US$1.5m
- added to peak flow for the 2080s in the design flood the Hamstall options were appraised against
- 29%
About the author. Hisham Nuhu is a UK-based flood and disaster risk specialist. He worked at England’s Environment Agency from 2019 to 2025 and holds an MSc in Water Science, Policy and Management from the University of Oxford. He works remotely or in-country with governments, development banks, UN agencies and consulting firms, and in England with councils, communities, landowners and developers.
How do you compare flood options on one consistent basis?
Give every option the same damages, the same 100-year appraisal period, the same discount rates and the same allowance for optimism bias, then compare benefit–cost ratios. At Hamstall Ridware that put an earth bund at about 4.6 (3.3–7.0 across unit rates), a set-back flood wall at 1.6 and an embankment at 1.0.
This was my own cost–benefit appraisal of the options, self-initiated and not a formal Environment Agency submission. It is a simplified appraisal on a standard basis, using the damages from my 2022 study, the Environment Agency’s evidence on what fluvial defences cost, Green Book discount rates and 60% optimism bias.
The bund comes out best because it holds the same 910 m line as the wall for far less money. Its range comes from the unit rate for earthworks, from the 20th to the 80th percentile of national costs.
The bund row describes an option of that kind on the modelled defence line. The bank the farmers actually built has no recorded dimensions or cost, so the ratio is not a measure of it.
On one basis, the earth bund gives the most benefit for its cost
How to read this: each bar is one option’s benefit–cost ratio; longer is better value, and above 1 the benefits outweigh the costs. Tap a bar, or use the arrow keys, to read it.
My own screening-level appraisal (self-initiated, not a formal Environment Agency submission): 100-year appraisal period, Green Book discount rates, 60% optimism bias, 2021–22 prices.
| Option | Benefit–cost ratio | Range | What it is, and what the cost rests on |
|---|---|---|---|
| Earth bund | 4.6 | 3.3–7.0 | New earth bank, 910 m long and 2 m high; range from earthworks unit rates, 20th to 80th percentile |
| Set-back wall | 1.6 | – | Flood wall on the same 910 m line; unit cost from my original option design |
| Embankment | 1.0 | – | Embankment on the same 910 m line; unit cost from my original option design |
Should flood damages include harm to mental health?
Yes. A year after the 2013–14 floods in England, probable depression, anxiety and PTSD affected 20.1%, 28.3% and 36.2% of people whose homes had flooded, against 5.8%, 6.5% and 7.9% of people unaffected. At Hamstall I added a mental-health cost for the people in each flooded home, and in the 1-in-100-year flood with the +29% climate allowance it made up about a quarter of the damage.
In that flood the model put damage to homes and contents at £477,617 and mental-health costs at £179,360, out of £656,977 in all. 27% share, derived
I used the Environment Agency’s published mental-health costs, which are per adult and higher where water reaches 0.3 m or more, and applied them to the average household size from the census. Leaving them out would have cut the benefits by more than a quarter.
How do climate allowances change an appraisal?
They raise the flood an option must hold back, and so its benefits and size. In the 2024 Hamstall model the 1-in-100-year flood reaches 14 buildings; with the 2080s allowance of +29% on peak flow it reaches 21, and the deepest water at a building rises from 0.13 to 0.34 m. I appraised the defence for that +29% flood.
More buildings flood, and deeper, as the climate allowance grows
How to read this: each bar is one flood in the 2024 Hamstall Ridware model; the gauge on the right (wide screens) shows the deepest water at any building. Tap a bar or a button to step through.
Buildings flooded in the 1-in-100-year (1% AEP) flood, with the 2020s, 2050s and 2080s climate allowances, and in the 1-in-1,000-year flood. Model built jointly with an Environment Agency modelling colleague; the hydrology was mine.
Show the data as a table
| Flood | Buildings flooded | Deepest at a building, m | 0.1 m or deeper | 0.3 m or deeper |
|---|---|---|---|---|
| 1% AEP flood (1 in 100) | 14 | 0.13 | 1 | 0 |
| 1% AEP + 15% (2020s allowance) | 16 | 0.24 | 8 | 0 |
| 1% AEP + 17% (2050s allowance) | 19 | 0.31 | 9 | 1 |
| 1% AEP + 29% (2080s allowance) | 21 | 0.34 | 9 | 1 |
| 0.1% AEP flood (1 in 1,000) | 29 | 0.46 | 17 | 5 |
How does England co-finance flood schemes?
As I worked with it in 2023–25: a national grant paid at set rates for outcomes such as households better protected, topped up by contributions from councils, water companies and other partners, and by a local levy agreed with regional flood committees. Money was released as the business case passed each gate. A new policy has applied since April 2026.
My part was in the middle of that system. On two council-led schemes I was the Environment Agency’s partnership advisor: the Chessington flood storage basin, completed in 2025, and the Worcester Park nature-based scheme, under construction in 2026. On SuDS in Sutton’s Schools my part was fortnightly progress meetings and checks with the council.
I worked under the 2020 partnership-funding model. The 2025 policy applied after my time; under it, new or improved schemes can get 100% of the first £3m of costs and 90% above that, and refurbishment of existing assets 100%. I follow it closely.
| Scheme | My part | Value | Status |
|---|---|---|---|
| Flood storage basin, Sir Francis Barker Recreation Ground, Chessington | Partnership advisor: funding and procurement support, weekly finance tracking, delay analysis | est. US$1.7m | Completed 2025 (council-led) |
| Worcester Park nature-based flood alleviation scheme | Partnership advisor: development and funding support | est. US$1.5m | Under construction (2026) |
| SuDS in Sutton’s Schools | Partnership contact: fortnightly progress meetings and checks with the council | est. >US$2m | Supported 2023–25 (council-led) |
| Pumping station refurbishment for eel compliance (three stations) | Support project manager: scope, scheme plan, task tracking, quarterly finance | est. US$1.5m | Supported 2023–25 |
How do counterpart funds and co-financing work in ADB and World Bank terms?
The parts line up. England’s national grant works like sovereign financing, partner contributions like co-financing and counterpart funds, the local levy like a sub-national counterpart contribution, and the business-case gates like appraisal and Board approval. The systems differ in detail; the discipline is the same: every contribution evidenced, every change controlled.
| UK practice | ADB term | World Bank term |
|---|---|---|
| Flood and coastal grant-in-aid | Sovereign financing, with government counterpart funds | Investment project financing, with counterpart funding |
| Partnership-funding contributions | Cofinancing, joint or parallel, and counterpart funds | Co-financing and counterpart funding |
| Local levy | Sub-national counterpart contribution | Sub-national co-financing |
| Business case gates (outline, then full) | Concept paper, due diligence, then the report to the Board with its design and monitoring framework | Project Concept Note, appraisal, then the Project Appraisal Document |
| Claim forecasts, grant claims, change control | Disbursement projections, withdrawal applications, change in scope | Disbursement forecasts, interim financial reports, restructuring |
The fuller translation table, with assurance, safeguards and completion reporting, is on Experience.
What was built at Hamstall, and what does it teach about appraisal?
The 2024 model and my appraisal both pointed to holding the line on the right bank, where water entered the village. What was delivered was an earth bund, built by the farmers with landowners and the village. On one consistent basis, a bund of that kind is also the best value of the options I appraised.
The raised defence moves some water onto farmland: in the 2024 model the left-bank fields flood slightly deeper. That trade-off is why any outcome had to be agreed with the farmers.
For a development-bank project the lesson carries over. A benefit–cost ratio wins an argument; agreement with the people whose land carries the risk gets something built.
Can you prepare the economic analysis for a development-bank project?
I can prepare or review the flood side of it: damages avoided, including harm to health where the evidence allows, options on one consistent basis, climate allowances and sensitivity tests. My appraisal record is in England’s system, under HM Treasury’s Green Book and the Environment Agency’s appraisal guidance. The method carries over to an ADB or World Bank economic analysis.
Questions people ask
Was your Hamstall appraisal submitted to the Environment Agency?
No. It was my own self-initiated appraisal, not a formal Environment Agency submission. The hydrology was entirely my work; I built the 1D–2D model jointly with an Environment Agency modelling colleague. Environment Agency and council references can confirm my role.
What is optimism bias?
An uplift on estimated costs, required by HM Treasury guidance, because early estimates are usually too low. I applied 60% at Hamstall, a cautious rate suited to an early-stage estimate.
Can you help a council or drainage board with flood scheme funding in England?
Yes: option appraisal, business-case support and partner contributions. See flood scheme funding in England.
Do your scheme values come from public budgets?
No. They are my estimates of each scheme as delivered, marked “est.”. Published figures are often older or cover only one phase.
Sources
- HM Treasury. The Green Book: appraisal and evaluation in central government.
- Environment Agency. Flood and coastal erosion risk management appraisal guidance.
- Flood Hazard Research Centre, Middlesex University. The Multi-Coloured Manual: flood damages to homes.
- Environment Agency (2015). Cost estimation for fluvial defences: summary of evidence (SC080039).
- Environment Agency. Mental health costs of flooding and erosion.
- Waite, T. D. et al. (2017). The English national cohort study of flooding and health: cross-sectional analysis of mental health outcomes at year one. BMC Public Health 17, 129. Full text.
- Environment Agency. Flood risk assessments: climate change allowances.
- Defra and Environment Agency (2026). Flood and coastal erosion risk management funding policy guidance.
Work with me
Need options compared, or the funding put together?
Send the options, the terms of reference or the funding question. I will reply with how I would appraise it and when I am available, remotely or in-country.