Schedule 3 of the Flood and

Water Management Act 2010

for sustainable drainage,

explanatory memorandum,

incorporating the regulatory

impact assessment and

explanatory notes,

October 2018


© Crown copyright 2018 WG36003 Digital ISBN 978 1 78964 146 2

Mae’r ddogfen yma hefyd ar gael yn Gymraeg / This document is also available in Welsh.


Explanatory Memorandum to:

1.         The Sustainable Drainage (Approval and Adoption) (Wales) Order 2018

2.         The Sustainable Drainage (Approval and Adoption Procedure) (Wales) Regulations 2018

3.         The Sustainable Drainage (Application for Approval Fees) (Wales) Regulations 2018

4.         The Sustainable Drainage (Enforcement) (Wales) Order 2018

5.         The Sustainable Drainage (Appeals) (Wales) Regulations 2018

This Explanatory Memorandum has been prepared by the Department for Environment and Rural Affairs and is laid before the National Assembly for Wales in conjunction with the above subordinate legislation and in accordance with Standing Order 27.1.

Minister’s Declaration

In my view, this Explanatory Memorandum gives a fair and reasonable view of the expected impact of the:

1.         The Sustainable Drainage (Approval and Adoption) (Wales) Order 2018

2.         The Sustainable Drainage (Approval and Adoption Procedure) (Wales) Regulations 2018

3.         The Sustainable Drainage (Application for Approval Fees) (Wales) Regulations 2018

4.         The Sustainable Drainage (Enforcement) (Wales) Order 2018

5.         The Sustainable Drainage (Appeals) (Wales) Regulations 2018

I am satisfied that the benefits justify the likely costs.

Hannah Blythyn AM

Minister for Environment                                                                               15 October 2018


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CONTENTS

PART 1 Explanatory Memorandum

1.     Description

2.     Matters of special interest

3.     Legislative background

4.     Purpose and intended effect of the provisions

5.     Consultation

PART 2 Regulatory Impact Assessment

6.     Policy options considered

7.     Cost-benefit analysis of options

8.     Summary of responses to consultations and the Government response

9.     Competition assessment

10.Specific impact assessments

11.Post implementation review

Annex 1 Housing development

Annex 2 Commercial and industrial development

Annex 3 Developers in Wales


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PART 1 Explanatory Memorandum

1.     Description

1.1    Schedule 3 of the Flood and Water Management Act 2010 (the 2010 Act) relates to provisions for sustainable drainage (SuDS). These include the establishment of a SuDS Approving Body (SAB) to be set up within the local authority alongside their lead local flood authority (LLFA) duty. SAB approval will be required before construction of drainage systems can commence on new and redeveloped sites. Provided appropriate statutory National SuDS Standards (SuDS standards) are met, the SAB will be required to adopt and maintain the approved SuDS that serve more than one property.

1.2 SuDS can provide a range of benefits, including reducing damage from flooding, improving water quality, protecting and improving the environment, improving health and well-being, and ensuring the stability and resilience of drainage systems. These are consistent with both the well-being goals and the sustainable development principles contained within the Well-being of Future Generations (Wales) Act 20151. They are also consistent with the Natural Resources Policy for Wales2.

1.3 SuDS, in contrast to conventional piped drainage, seek to manage rainfall in a way similar to natural processes, making use of the landscape and natural vegetation to control the flow and volume of surface water. To date, the use of SuDS on new developments has been non-mandatory. As a result, the use of SuDS is limited and systems are not always compliant with SuDS Standards3. This is due, in large part, to uncertainty around adoption and ongoing maintenance.

1.4 This is a single explanatory memorandum for the suite of Statutory Instruments needed to implement Schedule 3 of the 2010 Act. Once commenced these instruments, together [with the relevant provisions in Schedule 3] provide for the following:

·       Establish a SuDS Approving Body (SAB) in county and county borough councils.

·       Provides that drainage systems for managing rainwater (including rainwater, snow and other precipitations) for new developments must be approved by the SAB before construction begins.

·       Requires the Welsh Ministers to publish National SuDS Standards (SuDS Standards) for the design, construction, operation and maintenance of SuDS. In order to be approved by the SAB the proposed drainage system must meet the SuDS Standards.

·       Places a duty on the SAB to adopt and maintain approved SuDS that serve more than one property. In order to be adopted by the SAB the drainage system must be constructed and function as approved in accordance with the SuDS Standards.

·       Inserts a new section 106A into the Water Industry Act 1991 which supplements the existing provisions in section 106 of that Act making the right to connect

1Welsh Government (2015) Well-being of Future Generations (Wales) Act 2015

2Welsh Government (2017) Natural Resources Policy

3 Welsh Government (2016) Recommended non-statutory standards for sustainable drainage (SuDS) in Wales

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surface water to public sewers conditional on the drainage system being approved by the SAB as meeting the SuDS Standards.

·       Sets out Sewerage Undertakers, Natural Resources Wales, British Waterways and Highway Authorities as statutory consultees to the SAB.

·       Establishes a SAB enforcement and appeals regime.

·       Provides a mechanism for the recovery of reasonable costs incurred by the SAB in carrying out its function.

1.5 The Order commencing Schedule 3 of the Flood and Water Management Act 2010 for Wales was made on 1 May 2018. The legislation, along with the regulations necessary for its implementation, will come into effect on 7 January 2019. This is to give sufficient time to local authorities to establish the SAB approval mechanism. It is also to give developers time to become aware of the changes and prepare for mandatory SuDS Standards and the requirement for SAB approval before beginning construction.

1.6    It is proposed that the requirement for SAB approval will not apply to single dwellings and developments with a construction area of less than 100 square meters.

1.7 Transitional provisions have been inserted so that after the coming into force date SAB approval will not be required for the following:

·       New developments that were already granted planning permission before the coming into force date, or

·       New developments with one or more reserve matters where an application for approval of the reserve matter(s) is made within the period of 12 months after the coming into force date, or

·       New developments where a valid planning application has been submitted before the coming into force date.

1.8 Exemption provisions have been inserted so that SAB approval will not be required for the following:

·       Construction related to major roads (built by the Welsh Government), Network Rail railways and activities of internal drainage boards (delivered by Natural Resources Wales).

·       Permitted developments which involve the construction of a building or other structure covering an area of land of less than 100 square meters.

2.   Matters of special interest to the Constitutional and Legislative Affairs Committee

2.1    The 2010 Act is an existing UK Act of Parliament, these Statutory Instruments together are needed to implement Schedule 3 of the 2010 Act in Wales and apply only to Wales. The Flood and Water Management Act 2010 (Commencement no.2) (Wales) Order 2018 was made on 1 May 2018. The Order commenced Schedule 3 of the Act with effect from the day after the day on which it was made, for the purpose of making subordinate legislation, and for remaining purposes with effect from 7 January 2019.


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2.2    Schedule 3 of the 2010 Act could apply in England but has not been commenced. SuDS measures in England remain under review by the UK Government and have been the subject of scrutiny by the Environment, Food and Rural Affairs (EFRA) Parliamentary Committee. The Committee concluded the UK Government’s policy on SuDS is failing and made recommendations on the need to make standards for SuDS mandatory to improve the quality of SuDS schemes.

2.3 The UK Government has since published a review4 on the application and effectiveness of its approach, which seeks to implement SuDS on major new developments and to prioritise the use of SuDS in areas at risk of flooding through non statutory planning policy. A number of findings have emerged as summarised below:

:

·       80% of adopted Local Planning Authorities (LPAs) local plan policies reflected the policy that SuDS are to be provided in major new developments.

·       70-75% of LPAs have no monitoring or reporting of the take-up of SuDS.

·       A considerable number of LPAs reported their time, expertise and resources were under pressure with assessing planning applications.

·       The report noted that Lead Local Flood Authorities (LLFAs) were concerned that SuDS were not being incorporated at the master planning stage, with a lack of detail and consideration at early planning.

·       The report noted a shortfall where LPAs are not ensuring that maintenance arrangements for SuDS schemes are put in place for the life-time of the development.

3. Legislative background

3.1    Schedule 3 of the 2010 Act is given effect by Section 32 of that Act. Section 49(3)(i) of the 2010 Act provides that Section 32 and Schedule 3 come into force in relation to Wales in accordance with provisions made by order of the Welsh Ministers.

3.2    Schedule 3 of the 2010 Act confers powers on the Welsh Ministers to make subordinate legislation in relation to Wales on a number of matters:

·       Paragraph 7(4) contains provision amongst other things, for regulations to be made about exemptions to the requirement for approval. Paragraph 11(5) provides for regulations to be made about timing and procedure for determination of applications for approval, including the consequences of failure to comply with them.

·       Paragraph 13(1) requires regulations to be made for fees for applications for approval.

·       Paragraph 18(3) provides that regulations may be made for determining when a drainage system is to be treated as designed for a single property. Paragraph 20 provides that additional exceptions to the adoption duty may be made by Order.

4https://www.gov.uk/government/publications/a-review-of-the-application-and-effectiveness-of-planning-policy-for-sustainable-drainage-systems

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Paragraph 23(7) and 24(5) provide that regulations may be made about the timing and manner of notice given by the SAB concerning adoption.

·       Paragraph 14(1) requires an order to be made for the enforcement of the requirement for approval.

·       Paragraph 25(1) requires regulations to be made providing a right of appeal against certain decisions made by the SAB.

3.3       The Assembly legislative procedure for making the instruments is as follows:

·       By virtue of section 48(5) of the 2010 Act, the Sustainable Drainage (Approval and Adoption) (Wales) Order 2018, The Sustainable Drainage (Approval and Adoption Procedure) (Wales) Regulations 2018, and The Sustainable Drainage (Application for Approval Fees) (Wales) Regulations 2018 follow the negative resolution procedures.

·       By virtue of section 48(6)(a) of, and paragraphs 14(5)(b) and 25(3)(b) of Schedule 3 to the 2010 Act, the Sustainable Drainage (Enforcement) (Wales) Order 2018 and the Sustainable Drainage (Appeals) (Wales) Regulations 2018 follow the affirmative resolution procedure.

3.4 These instruments deal with surface water drainage in Wales only. This differs from all other aspects of sewerage and drainage which are provided by sewerage undertakers under the Water Industry Act 1991 (WIA). Under the WIA, Welsh Ministers are responsible for the regulation of water and sewerage undertakers who operate wholly or mainly in Wales and the Secretary of State has responsibility for water and sewerage companies operating wholly or mainly in England. As a result, for drainage services provided by the water and sewerage undertakers, those parts of England served by Dŵr Cymru Welsh Water are the responsibility of Welsh Ministers. Related provisions in the Wales Act 2017 once commenced will align regulation of sewerage undertakers with the geographical national border, instead of wholly or mainly.

3.5    Schedule 3 of the Act uses the term “Minister” to denote both the Welsh Ministers and the Secretary of State. The term “Minister” is used in this document to denote the Welsh Ministers.

4. Purpose and intended effect

The problem the legislation seeks to address

4.1    Around 163,000 properties in Wales are at risk of surface water flooding (120,000 residential & 43,000 non-residential)5. The cost of damages associated with local

5Natural Resources Wales Reports, Evidence and Data on Flooding:

https://naturalresources.wales/evidence-and-data/research-and-reports/reports-evidence-and-data-on-flooding/december-floods-fact-sheet/?lang=en

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flooding events in Wales was found to be as much as £71 million for the period 2011-20146.

4.2    The risk of flooding is increasing, largely due to climate change and urbanisation. Surface runoff can be a major source of pollution; both directly and from overwhelmed sewers discharging into rivers. Pressure to take action on water quality, for example by increasing the capacity of the sewerage system, also stems from the present need to comply with EU legislation, in particular the Water Framework Directive.

4.3    According to Natural Resources Wales7there is distinct lack of ‘public clarity’ over responsibilities (‘who does what’), particularly in relation to the management of (coastal and) surface water flooding” “the creation of sustainable drainage approval bodies” is identified as a key measure which could help improve flood risk management. The approval and adoption of SuDS schemes by an approving body established in local authorities is an objective of the national strategy for flood risk management in Wales8. Of particular concern is the current lack of clear responsibilities for maintaining and operating surface water drainage systems that are not defined as traditional piped or sewered drains that connect to the public sewer system or otherwise.

4.4    SuDS reduce the rate and volume of surface runoff from developments to more closely match ‘greenfield’ sites. This generally means lower or slower discharges compared with conventional piped drainage. They are a more sustainable and resilient form of drainage and typical components include ponds, permeable paving and swales9.

4.5    Schedule 3 of the 2010 Act includes a provision that requires developers to seek drainage approval from a SAB before starting any construction work that has drainage implications. The SAB must determine if the application meets mandatory SuDS Standards. Under the legislation all approved SuDS which serve more than one property must be adopted and maintained by the SAB.

4.6 Exemptions to the regime may be allowed by regulation and the 2010 Act specifically allows for phased commencement to manage impacts on Local Authorities and businesses.

4.7 The Pitt review10, which followed the 2007 floods, made specific recommendations with regards to surface runoff, including the need to:

·       Clarify the responsibility for the adoption and maintenance of sustainable drainage systems; and

·       Remove the automatic right to connect to surface public water sewers (Section 106 and Section 115 of the Water Industry Act 1991).

Which will be implemented by commencing Schedule 3 to the 2010 Act. Why Government needs to intervene

6Natural Resources Wales Reports, Evidence and Data on Flooding:

https://naturalresources.wales/evidence-and-data/research-and-reports/reports-evidence-and-data-on-flooding/december-floods-fact-sheet/?lang=en

7https://naturalresources.wales/media/680131/flood-coastal-erosion-risk-management-in-wales-2014-2016.pdf

8https://gov.wales/docs/desh/publications/111114floodingstrategyen.pdf

9 CIRIA (2015) The SuDS Manual (C753)

10Cabinet Office (2008) The Pitt Review: Learning the Lessons from the 2007 Floods

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4.8    The justification for, and use of, SuDS is well established in the planning system, which includes TAN 15 and Approved Document H of the Building Regulations, as well as voluntary standards such as the Home Quality Mark. However, the current uptake of SuDS is low, limiting the potential contribution of SuDS to mitigating flood risk from surface run-off and the risk of sewer overload, or to protecting water quality.

4.9    In the past, most developments have been built with separate drains for foul water and surface runoff, although some 70% of the UK’s sewer network is combined, so many surface water drains connect into existing combined sewers. A relatively low proportion (around 20-40% based on anecdotal evidence) can be described as SuDS that comply with national standards11. The market has been slow in voluntarily integrating SuDS into development plans. The market has been constrained by:

·       Information failure – currently, there is a lack of consistent use of recommended standards. Despite the existence of good practice, bad practice is also evident and contributes to a perception that SuDS are expensive and entail non-essential costs.

·       Externalities – there is a disconnect between those who manage and/or pay for surface water drainage and those who benefit from sustainable management. The benefits are often public and generally accrue further downstream, i.e. some way away from the point at which the rain falls and is dealt with.

·       Lack of a statutory requirement and coherent arrangements for the adoption and ongoing maintenance of drainage - currently, developers or local authorities have to make arrangements to finance the ongoing maintenance of SuDS, where they are built. However, the arrangements for this are highly variable and ad-hoc.

4.10 In addition to the constraints mentioned above, there are also weak market drivers for the management of surface water runoff:

·       The legacy of draining surface water runoff into our sewers means that foul water and surface runoff are often seen as a single problem. However, over recent years there has been little change in the amount of water each person uses at home12 i.e. little improvement in water efficiency per person. In contrast, Ofwat predict a significant increase in sewer flooding from climate change going forward13. Thus the influence of surface runoff (influenced by the pattern of climate change, as well as urban creep) on our sewers will increase relative to the amounts of foul water to be handled.

·       Current arrangements for flood insurance cover are highly cross-subsidised by those not at risk and this dis-incentivises the uptake of management measures, including SuDS.

11 Welsh Government (2016) Recommended non-statutory standards for sustainable drainage (SuDS) in Wales

12Environment Agency (2008) Water resources in England and Wales research on current state and future pressures

http://webarchive.nationalarchives.gov.uk/20140329213237/http://cdn.environment-agency.gov.uk/geho1208bpas-e-e.pdf

13 Ofwat has published research illustrating the predicted scale of increased sewer flooding risks due to climate change https://www.ofwat.gov.uk/wp-content/uploads/2015/11/rpt_com201106mottmacsewer.pdf

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Policy Objective

4.11 Commencement of Schedule 3 is intended to:

·       Move provision of SuDS from a non-statutory to a statutory requirement;

·       Ensure compliance with and consistency of standards for long term surface water management;

·       Provide certainty for developers that SuDS will be adopted without the need for lengthy negotiation or significant expense;

·       Reduce the risk of localised, surface water flooding;

·       Mitigate pollution that may arise from surface water runoff;

·       Reduce extra load on public sewers and the need for additional capacity; and

·       Help safeguard water supplies.

4.12 Other, indirect benefits include:

·       Help achieve the goals of the Well-being of Future Generations (Wales) Act 2015, and in particular the Welsh Government Well-being Objective to connect communities through sustainable and resilient infrastructure.

·       Contribute to the commitment to take action to improve management of our water environment, made in the Welsh Government Programme for Government 2016-2021. This also identifies green infrastructure (such as SuDS) as an opportunity to address poverty, housing and infrastructure drivers, whilst meeting broader longer term objectives.

·       Contribute to the commitment to implement nature based solutions, a national priority in the Welsh Government Natural Resources Policy (2017) for Wales, and related wider long-term Prosperity for All objectives including supporting sustainable communities, promoting green growth, supporting a more resource efficient economy and maintaining healthy, active and connected communities14.

·       Contribute to the goals of the Water Strategy for Wales, which sets out strategic direction for water policy over the next 20 years and beyond.

·       Contribute to delivering objectives of the National Strategy of Flood and Coastal Erosion Risk Management in Wales.

·       Achieve compliance with the Planning (Wales) Act 2015, which imposes duties requiring “sustainable development” consistent with SuDS features on new developments.

·       Achieve compliance with the duty to maintain and enhance bio-diversity and promote the resilience of eco-systems, established under the Environment (Wales) Act 2016.

·       Help meet the goals of the EU Water Framework Directive.

·       Reduce air pollution through the increased use of green infrastructure, contributing to achieving the Air Quality Standards (Wales) Regulations 2010.

·       Help meet Welsh Housing Quality Standards, which state that new homes constructed for Registered Social Landlords (housing associations) for both social housing and sale on the open market must be “located in attractive and safe

14In particular, the Policy states that “increasing access to green spaces and providing community facilities to bring people together is highlighted as a ‘best buy’ to prevent mental ill health and improving mental well-being by Public Health Wales. The World Health Organisation suggests that public health approaches with health, social, economic and environmental benefits, such as safe green spaces and active transport, have been shown to be cost-effective with potential returns on investment. Studies also suggest that people living closer to good-quality green space are more likely to have higher levels of physical activity, and are more likely to use it and more frequently”.

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environments”, use “soft and hard landscaping with planting in protected areas” and provide “adequate, practical and maintainable communal areas”;

·         Help Wales to achieve carbon reduction objectives15 and adapt to climate change.

·         Increase wetland habitats and urban green space contributing to the aims of the National Biodiversity Strategy and Action Plan for Wales (the Nature Recovery Plan for Wales) and the commitments to the Habitats and Birds Directives.

Why SuDS?

4.13 Flood damage from surface runoff is predicted to increase due to climate change and continued urbanisation16.

4.14 SuDS can reduce this increase by storing runoff, slowing the rate at which runoff enters water bodies and helping runoff infiltrate into the ground. In case studies SuDS has been shown in particular circumstances to reduce runoff by as much as 50%17.

4.15 The majority of towns and cities in Wales were constructed with combined sewers where surface runoff mixes with foul water and is then transported to a treatment plant that extracts clean water. In around half of the network, current sewerage systems are at or beyond capacity.

4.16 In these situations, during periods of intense rain, the combined sewers quickly become full. When this happens, untreated sewage and foul water discharges to streams and rivers through engineered overflows (intended to prevent similar flooding in properties). During floods, this will combine with flood waters and in a small number of cases it can also flood homes directly.

4.17 The extent of legal discharges is limited by Natural Resources Wales permits and is constrained by the following directives:

·         Bathing Water Directive;

·         Shellfish Directive;

·         Water Framework Directive; and

·         Urban Waste Waters Treatment Directive.

4.18 The sewage network in England and Wales is valued at around £174 billion, substantial additional sewerage capacity is needed to address the predicted increase in flooding due to climate change, urban creep and new connections. However if new connections were not made (through introducing SuDS) this will reduce the pressures on the sewers which could save billions in investment from water and sewerage companies.

15Consistent with the advice set out Committee on Climate Change (2017) Advice on the Design of Welsh Carbon Targets

16 The Welsh Government National Strategy for Flood and Coastal Erosion Risk Management 2011 https://gov.wales/docs/desh/publications/111114floodingstrategyen.pdf

17See for example EPC (2017) Sustainable Drainage Systems on new developments, analysis of evidence https://gov.wales/docs/desh/publications/170209-suds-evidence-epc-final-report-en.pdf

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4.19 SuDS provide an opportunity to avoid many of the new connections and to develop an alternative infrastructure to public sewers offering significant savings in investment.

5. Consultation

5.1 In developing the evidence to support the Regulatory Impact Assessment (RIA)18, consultation has taken place with a wide range of organisations and sectors, including:

·         Local authorities

·         Developers and home builders

·         Water and sewerage companies

·         Natural Resources Wales

·         Non-government organisations and the third sector

·         Consumer bodies

·         Academia

·         Sector professionals

5.2 The RIA has been completed alongside this Explanatory Memorandum. Further details of the consultations undertaken are included in the RIA below (Part 2).


18See for example EPC (2017) Sustainable Drainage Systems on new developments, analysis of evidence https://gov.wales/docs/desh/publications/170209-suds-evidence-epc-final-report-en.pdf.

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PART 2 Regulatory Impact Assessment

Section

Page

Policy options considered

13

The preferred option

14

Cost-benefit analysis of options

14

Option 1 Do Nothing

19

Option 2 Commence Schedule 3 of the 2010 Act

20

Option 3 Planning Approach

34

Summary of costs and benefits

43

Summary of responses to consultations and the Government response

45

Competition assessment

50

Specific impact assessments

51

Post implementation review

55

 

Annexes

Annex 1 Housing development

Annex 2 Commercial and industrial development

Annex 3 Developers in Wales


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6. Policy options considered

6.1    The Welsh Government has considered three main policy options (Table 1). Table 1: Summary of policy options considered

Policy option

Name

Description

1

Do nothing

The baseline option, involving continuation of current non-regulatory policy.

2

Commence Schedule 3

Mandatory use of SuDS compliant with national standards on all minor and major development (more than 1 dwelling or sites larger than 0.1 hectares).

3

Planning approach

Expectation that SuDS will be provided on all minor and major development wherever this is appropriate and unless demonstrated to be inappropriate. Use of planning conditions or planning obligations to ensure that there are clear arrangements in place for ongoing maintenance over the lifetime of the development.

 

6.2       In addition to the three options outlined above, a number of other options were discussed but excluded from full consideration in the RIA. However, some of these may not be inconsistent with the policy options set out above, and these are discussed in the broader consultation paper. These options, and the reason for their exclusion, are shown in Table 2.

Table 2: Options discussed but excluded from full consideration in RIA

Option

Description

Reason for exclusion

Water

Water        and        sewerage

Options  for    voluntary    adoption    of

company

company (WaSC) required

SuDS and maintenance by water

adoption

to adopt, and responsible for

company   are     considered    in    the

 

maintaining,   certain   SuDS

broader    consultation   paper.     Non-

 

(e.g.         below         ground,

proprietary)    compliant with

voluntary    adoption  would    need    a

change in primary legislation (S104 of

 

standards.

the Water Industry Act 1991), and legislation to remove automatic right to connect.

 

 

Creates incentive to install systems where adoption more certain (likely to be below ground, as in Scotland).

Amended

SAB established for SuDS

Options for amending Schedule 3,

Schedule 3

approval, but SuDS adopted by different groups, such as

e.g. through regulations and orders, are discussed in broader consultation

 

local  authority,    WaSC    or

housing               association,

paper.

 


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depending on functionality, benefits, etc.

High risk of differing approaches in

different  areas   and    duplication    of
standards.

Also proliferation of bodies with SuDS

responsibilities   likely      to       create
confusion.

Sewers    for

Update Sewers for Adoption

No     mandatory      requirement,      so

adoption

(guidance for design and

unlikely to significantly change current

 

construction of sewers that will be adopted by

situation.

 

Sewerage Undertakers in accordance with Section

 

 

104 of the Water Industry

 

 

Act 1991) to include SuDS.

 

 

What is the preferred option?

6.3       Option 2 is the preferred option. The NPV (net present value) for Option 2 is estimated to be £164.9m (range £82.6m to £961.4m). It is positive suggesting that the net benefits to society outweigh the net costs to society. The NPV for Option 1 is zero. The NPV for Option 3 is estimated to be £54.3m, i.e. around one-third of the benefits of the preferred option (although the range at £20.4m to £460.4m overlaps with Option 2.

7. Cost benefit analysis of options

7.1       We have used guidance provided by HM Treasury19 to carry out a Cost Benefit Analysis (CBA) for the three policy options.

7.2       The appraisal period is assumed to run from 2018 to 2026. The final year (2026) was chosen as this correlates with the end-point of many of the local development plans in Wales, i.e. there is greater certainty regarding the scale and extent of housing and other development over this period. Of course, a longer appraisal period could be justifiable and may be appropriate, although the scale and extent of new development and exogenous changes would be more uncertain. Nevertheless, adopting a longer period would give greater importance to those impacts recurring over time. This is examined through sensitivity analysis.

7.3       The impacts of the options have been classed as either:

·           One-off impacts are assumed at the start of the appraisal period (2018); or

·           Recurring impacts are assumed to occur each year (from 2018 to 2026 inclusive).

19HM Treasury (2011) Green Book

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7.4 In accordance with HM Treasury guidance, a discount rate of 3.5% has been applied to future costs and benefits, in order to calculate the present value (PV) of the impacts. Changing this rate is examined through sensitivity analysis.

7.5 Total estimated figures given throughout the RIA are rounded so may not sum precisely with values in supporting tables.

7.6       The focus in the RIA is on additional/marginal costs and benefits associated with options 2 and 3. Therefore, any costs/benefits under Option 1 (the ‘Do Nothing’ option) are not additional to current situation and are assumed to be zero.

7.7       The costs and benefits accruing to a number of key groups and organisations have been considered. These are

·             Welsh Government

·             Local authorities/SABs

·             Developers

·             Water and sewerage companies

·             Property owners/occupiers

·             Natural Resources Wales

·             General population

7.8 The specific impacts considered in the RIA draws on engagement with stakeholders, a range of previous work, including Defra (2010)20, the SuDS Manual21 and the CIRIA Benefits of SuDS Tool (BeST), and expert knowledge. The full list of impacts considered is shown in Table 3.

Table 3: Impacts considered (full list)

Potential impacts

Description

Construction

Construction of compliant SuDS

Fees (developers)

Application/approval/certification/inspection/adoption fee

Land take

Additional land take from SuDS

Start-up

(developers)

Capacity building, upskilling and training

Connection charges (developers)

Avoided surface water connection applications/charges

Adoption, O&M (developers)

Reduced operation and monitoring (O&M), and certainty of adoption, leading to efficiencies in planning process and development, as well as reduced or simplified interaction with a complex array of interests, including the WaSC, Planning

 

20Commencement of the Flood and Water Management Act 2010, Schedule 3 for Sustainable Drainage: Impact Assessment

21CIRIA (2015) The SuDS Manual (C753)

15


 

Authority, Highways Authority and NRW.

Start-up (local authorities/SABs)

Establish SAB, including administration, accounting, legal fees, registration charges, advertising, promotional activity, engagement, employee training, etc

O&M (local

authorities/SABs)

Operation and maintenance of SuDS

Adoption (local authorities/SABs)

Additional duty/responsibility to maintain, potentially offset by reduced risk from orphaned or abandoned schemes

Revenue (local authorities/SABs)

Revenue from application/approval fees

Monitoring & enforcement (local authorities/SABs)

All aspects of monitoring and enforcement of SuDS, including appeals and ensuring proper functioning (e.g. porous pavements and soakaways)

Consultation (local authorities/SABs)

Additional costs of consultation as LLFAs become statutory consultee on all planning applications in relation to surface water drainage. Also, costs of additional planning conditions/funding agreements for construction and maintenance of the drainage system on all developments.

Consultation
(others)

Additional costs of consultation on planning applications for statutory and other consultees. It is likely that most consultation requirements will be dealt with through standing advice, as with existing planning processes. Therefore, no significant additional costs are expected as a result of the proposed changes.

Asset base (WaSC)

Opportunity cost of foregone increase in asset base, on which companies can earn a return

Connection charges (WaSC)

Reduced revenue from surface water connection
applications/charges

Infrastructure

Reduced/deferred future investment need in sewerage infrastructure, reduced O&M costs for conventional sewers (e.g. pumping, treatment) and improved ability to take an integrated approach to urban water systems.

Monitoring &
enforcement
(WaSC)

Reduced need for monitoring and enforcement of sewer connections

Surface water charges

Reduction in charges paid by property owners/occupiers for surface water drainage

Flood risk

Avoided damage and associated impacts (e.g. on psychological health) from reduced flood risk

Amenity

Enhanced attractiveness and liveability of developments

 


16


O&M (property owners/occupiers)

Added responsibilities for surface water in curtilage

Building temperature

Impact of SuDS on cooling (summer) or insulation (winter)

Crime

Reduced crimes against property or people

Traffic calming

Risk of road accidents or street-based recreation opportunities

Infraction

Avoided risk of infraction of water quality related EU directives

Growth

Economic growth

Enabling

development

Contribution to affordable housing targets

Appeals

Costs of establishing and running Planning Inspectorate (PINS) to deal with appeals

Wider benefits

Related to goals in the Well-being of Future Generations Act 2015, including prosperous, resilient, healthier Wales, etc

Rainwater
harvesting

Reduced flows, pollution or mains consumption

Tourism

Attractiveness of tourist sites

Regulation

Improved ability of NRW to tackle diffuse pollution, surface water flood risk and deliver ecosystem benefits

Flood risk

Increased risk of flooding in public areas (e.g. roads) due to exceedance

Biodiversity

New or enhanced habitats and opportunities for wildlife

Carbon

Reduction or sequestration of greenhouse gas emissions resulting from reduced pumping/treatment or new/additional planting

Education

Increased opportunities for learning and development

Climate change

Enhanced ability to mitigate or adapt to the expected impacts of climate change

Water quantity

Additional surface or groundwater available for abstraction, or to help alleviate drought/water scarcity

Health

Improved health and well-being due to increased/enhanced access and use of green space or, depending on type of SuDS used, improved air quality and temperature regulation (e.g. using green roofs)

Recreation

Improved or enhanced recreational opportunities (e.g. walking, fishing, watersports)

Water quality

Reduced sewer/surface water overflows and natural infiltration of surface water before it enters watercourses, leading to improved

 

17


or enhanced water quality of surface, ground, transitional or coastal waters, consistent with objectives of Water Framework Directive

7.9 A proportionate approach has been taken, with the impacts above ‘screened’ for significance. Where costs and benefits are likely to be small, or impacts considered likely to affect only a few organisations/firms, or many organisations/firms to a very small degree, these have not been valued. Significant environmental and social impacts have been valued using BeST.

7.10 In many cases, there is no overall net change anticipated, although some degree of redistribution (a 'transfer' of costs and benefits from one group to another) is expected. In these cases, the effects have been assessed in the RIA.

7.11 For the purposes of the RIA, which is concerned with net impacts across the economy, aggregated estimates of costs and benefits across the country are appropriate. However, we recognise that individual groups and organisations associated with the list in paragraph 7.7 will be impacted differently by the proposals.

7.12 Each valued impact in the RIA comprises two components:

·         A quantified estimate of the annual impact; and

·         A monetary unit value.

These are multiplied together to calculate a monetised annual value for each significant impact. Where possible, low and high estimates for each component are considered (as well as the central or best estimate). As a result, the RIA includes a range for each monetised annual value. Further sensitivity analysis, considering changes to the key parameters of the discount rate and the assessment period, has also been undertaken.

7.13 In the analysis and presentation that follows, positively valued impacts indicate a benefit, whilst impacts with a negative value indicate a cost.

Assumptions

7.14 The key assumptions applied in undertaking the RIA are set out in Table 4.

Table 4: Key assumptions in RIA

General assumptions

1

Administrative changes expected to be cost neutral

2

All valued impacts are presented as benefits. Therefore, costs appear as negative values.

3

Significant wider benefits assessed using BeST. These include amenity, education and carbon.

4

Commercial and industrial developments include those over 0.1ha (1,000m2).

 


18


5

Benefits are assumed to start accruing from 2018, the first year of the appraisal period.

6

The timescale for the assessment is 2026, to maintain consistency with the end date for the majority of local development plans in Wales.

7

Historic values have been updated to 2016 prices using Bank of England online inflation calculator.

8

Weighted average salary and salary-related costs for employers (e.g. NI contributions), of SAB officer ranges from £30,369 (av salary of civil engineer) to £61,467 (Defra, 2010) (£72,326 in 2016 prices), mean (central) £51,348. Salaries likely to vary across Wales.

9

SAB running costs - Based on Defra (2010), we assume 1 Full Time Employee (FTE) per 100 major or 150 major and minor drainage applications/ year.

10

The average number of applications requiring SAB approval will be between 100 and 150 (central estimate 125) per year (though recognising that individual local authorities may see significantly fewer or more applications than this average).

11

Current situation (baseline) includes compliant SuDS on 20% to 40% of new development. Anecdotal evidence suggests that this may be optimistic (so the benefits of the two policy options may be larger than those estimated here).

12

Planning option will lead to compliant SuDS on 30% (low), 40% (central) or 50% (high) of new development

13

Estimates for projections for housing development are set out in Annex 1, and for commercial and industrial development in Annex 2. These projections are generally higher than actual construction over recent years and, as such, may be challenging to achieve.

14

Evidence relating to costs of construction and operation are largely based on EPC (2017) report. This report is based on a comparison of the costs of SuDS and non-SuDS approaches at an overall scheme/development level, rather than the costs of specific or individual measures or technologies.

 

Option 1: Do nothing

7.15 This is the baseline option and involves a continuation of current non-regulatory policy.

7.16 Although there will be costs and benefits associated with this option (for example due to urban growth or climate change), they are assumed to impact on all options equally. Therefore, they are not considered to be additional and are not analysed in the RIA.


19


Option 2: Commence Schedule 3


7.17 This is the preferred option and involves the mandatory use of SuDS compliant with national standards on all minor and major development (more than 1 dwelling or sites larger than 0.1 hectares).

7.18 A summary of the impacts considered likely under Option 2 is shown in Table 5 below. This also includes the group impacted, a description of the impact, whether the impact is likely to be a cost or a benefit to the impacted group, whether the impact is one-off or recurrent, whether it has been valued and comments setting out the reasons for this.


20


Table 5: Impacts of Option 2

Group

Impact

Description

Cost or Benefit?

One-off or recurrent?

Value in RIA?

Comments

Developers

Construction

Construction of compliant SuDS

Benefit

Recurrent

Yes

Evidence from EPC (2017) report22 suggests capital costs are lower for compliant SuDS than for conventional systems. Some of this benefit may accrue to water and sewerage companies, so could also be some redistributional impact.

Fees

Application/approval/certification/inspection/adoption fee

Cost

Recurrent

Yes

Administrative changes expected to be cost neutral, so costs will be offset by SAB revenue and no overall net change. However, will be redistributional impact so effects need to be assessed.

Land take

Additional land take from SuDS

Cost

Recurrent

Yes

(sensitivity only)

CIWEM (2017) concludes that "We consider that arguments for not delivering SuDS on the basis of site constraints may be overstated... with good planning there may be no additional requirement for land or that the additional land needed for SuDS can be small and affordable". If SuDS are planned into developments from the outset, and there is clarity of requirements for SuDS in the planning process, there appears to be no impact on the number of units, and this appears to be a perceived cost which is therefore not valued.

However, evidence subsequently provided by the House Builders Federation (HBF), based on information previously provided to Defra, suggests there are examples where SuDS have reduced number of units on developments. This evidence is therefore used for sensitivity analysis.

Start-up

Capacity building, upskilling and training

Cost

One-off

Yes

Include in RIA

 

22https://gov.wales/docs/desh/publications/170209-suds-evidence-epc-final-report-en.pdf

21


 

Connection charges

Avoided surface water connection
applications/charges

Benefit

Recurrent

Yes

May be offset by any potential reduction in water and sewerage company revenue.

Adoption,
O&M

Reduced O&M, and certainty of adoption, leading to efficiencies in planning process and development, as well as reduced/simplified interaction with a complex array of interests, including the WaSC, Planning Authority, Highways Authority and NRW

Benefit

Recurrent

No

Not enough evidence to identify or quantify impact robustly.

Local

authorities/SABs

Start-up

Establish SAB, including administration, accounting, legal fees, registration charges, advertising, promotional activity, engagement, employee training, etc

Cost

One-off

Yes

Include in RIA

O&M

Operation and maintenance of SuDS

Benefit

Recurrent

Yes

Evidence from EPC report suggests O&M costs are lower for compliant SuDS than conventional systems (so no increase in commuted sums paid to local authorities is expected). Some of this benefit may accrue to water and sewerage companies, so could be some distributional impact.

Adoption

Additional duty/responsibility to maintain, potentially offset by reduced risk from orphaned or abandoned schemes

Cost or benefit

Recurrent

No

Not enough evidence to identify or quantify impact robustly.

Revenue

Revenue from application/approval fees

Benefit

Recurrent

Yes

Administrative changes expected to be cost neutral, so benefits will be offset by developer costs and no overall net change. However, will be redistributional impact so effects need to be assessed.

Monitoring & enforcement

All aspects of monitoring and enforcement of SuDS, including appeals and ensuring proper functioning (e.g. porous pavements and soakaways)

Cost

Recurrent

Yes

May be offset by any potential increase in water and sewerage company revenue.

Water and
sewerage
companies

Asset base

Opportunity cost of foregone increase in asset base, on which companies can earn a return

Cost

Recurrent

No

Any savings to companies would be returned to customers through regulatory process, resulting in no net gain.

Connection charges

Reduced revenue from surface water connection applications/charges

Cost

Recurrent

No

Under this option, most developments would still connect to the foul/combined public sewer, so it is likely that water and sewerage companies would still need to consent and charge for connections and inspection (although companies could see

 

22


 

 

 

 

 

 

reduction in adoption fees). Any potential impacts therefore not valued.

Infrastructure

Reduced/deferred future investment need in sewerage infrastructure, reduced O&M costs for conventional sewers (e.g. pumping, treatment) and improved ability to take an integrated approach to urban water systems.

Benefit

Recurrent

No

Already largely captured in construction benefit to developers and O&M benefit to local authorities/SABs

Monitoring & enforcement

Reduced need for monitoring and enforcement of sewer connections

Benefit

Recurrent

No

Under this option, most developments would still connect to the foul/combined public sewer, so it is likely that water and sewerage companies would still have the same asset base and still need to undertake the same level of inspection, monitoring and enforcement. Any potential impacts therefore not valued.

Property

owners/occupiers

Surface water charges

Reduction in charges paid for surface water drainage

Benefit

Recurrent

No

Any reduction in charges paid to water and sewerage company likely to be offset by development management charge, so no overall impact.

Flood risk

Avoided damage and associated impacts (e.g. on psychological health) from reduced flood risk

Benefit

Recurrent

No

Any benefit should be equal for both SuDS and piped systems (unless standards are higher for properties than for sewers, which is unlikely). Therefore, no net benefit anticipated.

Amenity

Enhanced attractiveness and liveability of
developments

Benefit

Recurrent

Yes

Valued in BeST using estimates of willingness of pay of residents for 'street improvements through greening'. These may capture elements of other benefits to the wider population (particularly biodiversity, health, recreation and water quality), so these are not valued separately due to risk of double counting.

O&M

Added responsibilities for surface water in curtilage

Cost

Recurrent

No

Unlike pipes, SuDS cannot be ignored and, although this may be perceived as an additional cost/nuisance (at least initially), it could equally be a benefit as there is less likelihood/consequence of problems from SuDS. So overall, no net impact assumed.

 

23


 

Building
temp

Impact of SuDS on cooling (summer) or insulation (winter)

Benefit

Recurrent

No

Not enough evidence to identify or quantify impact robustly.

Crime

Reduced crimes against property or people

Benefit

Recurrent

No

Not enough evidence to identify or quantify impact robustly.

Traffic
calming

Risk of road accidents or street-based recreation opportunities

Benefit

Recurrent

No

Not enough evidence to identify or quantify impact robustly.

Welsh

Government

Infraction

Avoided risk of infraction of water quality related EU directives

Benefit

Recurrent

No

Not enough evidence to identify or quantify impact robustly.

Growth

Economic growth

Benefit

Recurrent

No

Not enough evidence to identify or quantify impact robustly.

Enabling development

Contribution to affordable housing targets

Benefit

Recurrent

No

Any reduced housing construction costs already counted (under 'developers') and could be offset by possible reduced housing densities (also counted under 'developers')

Appeals

Costs of establishing and running Planning
Inspectorate (PINS) to deal with appeals

Cost

Recurrent

No

PINS work funded by cost recovery on case-by-case basis. No 'set-up' costs or impacts on Welsh Government.

Wider
benefits

Related to WBFG Act goals, including prosperous, resilient, healthier Wales, etc

Benefit

Recurrent

No

Overlaps with impacts on 'general population', so high risk of double counting if included here.

Rainwater harvesting

Reduced flows, pollution or mains consumption

Benefit

Recurrent

No

Not enough evidence to identify or quantify impact robustly.

Tourism

Attractiveness of tourist sites

Benefit

Recurrent

No

Not enough evidence to identify or quantify impact robustly.

NRW

Regulation

Improved ability to tackle diffuse pollution, surface water flood risk and deliver ecosystem benefits

Benefit

Recurrent

No

Not enough evidence to identify or quantify impact robustly.

General
population

Flood risk

Increased risk of flooding in public areas (e.g. roads) due to exceedance

Cost

Recurrent

No

Likely to be offset by any reduced risk of hydraulic overload flooding resulting from lower volumes in sewerage system

Biodiversity

New or enhanced habitats and opportunities for wildlife

Benefit

Recurrent

No

Not valued due to potential for double counting with amenity benefit to property owners/occupiers.

Carbon

Reduction or sequestration of greenhouse gas emissions resulting from reduced pumping/treatment or new/additional planting

Benefit

Recurrent

Yes

Include in RIA

Education

Increased oportunities for learning and development

Benefit

Recurrent

Yes

Include in RIA

Climate
change

Enhanced ability to mitigate or adapt to the expected impacts of climate change

Benefit

Recurrent

No

Not enough evidence to identify or quantify impact robustly.

 

24


 

Water
quantity

Additional surface or groundwater available for abstraction, or to help alleviate drought/water scarcity

Benefit

Recurrent

No

Not enough evidence to identify or quantify impact robustly.

Health

Improved health and well-being due to

increased/enhanced access and use of green space or, depending on type of SuDS used, improved air quality and temperature regulation (e.g. using green roofs)

Benefit

Recurrent

No

Not valued due to potential for double counting with amenity benefit to property owners/occupiers.

Recreation

Improved or enhanced recreational opportunities (e.g. walking, fishing, watersports)

Benefit

Recurrent

No

Not valued due to potential for double counting with amenity benefit to property owners/occupiers.

Water quality

Reduced sewer overflows and natural infiltration of surface water before it enters watercourses, leading to improved or enhanced water quality of surface, ground, transitional or coastal waters, consistent with objectives of Water Framework Directive

Benefit

Recurrent

No

Not valued due to potential for double counting with amenity benefit to property owners/occupiers.

 


25


7.19 Table 6 summarises the PV impacts for Option 2. Each valued impact is considered, in turn, below Table 6. The NPV for Option 2 is estimated to be £164.9 million (range £82.6m to £961.4m). It is positive suggesting that the net benefits to society outweigh the net costs to society.

Table 6: Summary table of PV impacts for Option 2 (2018-2026)

Group

Impact

Total PV impact (£ million)

 

 

Low

Central

High

Developers

Construction

80.3

160.5

955.9

Fees

- 9.9

- 14.1

- 19.0

Start-up

- 0.1

- 0.3

- 0.5

Connection charges

5.6

15.0

27.5

Local

authorities/SABs

Start-up

- 0.4

- 0.5

- 0.6

O&M

- 0.1

0.2

0.3

Revenue

9.9

14.1

19.0

Monitoring & enforcement

- 5.0

- 15.3

- 29.9

Property

owners/occupiers

Amenity

2.1

4.7

7.5

General
population

Carbon

0.1

0.3

0.6

Education

0.1

0.2

0.6

 

TOTAL

82.6

164.9

961.4

 

7.20 Developers: Construction of SuDS

The annual impact on developers associated with the construction of SuDS is as

follows.

Residential

 

Low:

£9,594,000

Central:

£19,597,000

High:

£117,083,000

 

Commercial and industrial

Low:

£606,000

Central:

£785,000

High:

£4,315,000

 

These estimates are based on the information provided in Table 7.


26


Table 7: Impact on developers: Construction of SuDS

 

 

Value

Units

Source

Assumptions

Quantified estimate of impact (residential)

Low

5,220

New homes per year

Public Policy Institute for Wales (2015)23

Assume compliant SuDS currently on 20-40% of new developments, so option applies to additional 60% (low), 70% (central) and 80% (high) of new development24.

Central

10,010

Housing White Paper (2012)25

High

12,946

Information from local development plans provided by WG (March, 2017)

Monetary value

(residential)

Low

1,838

Capex saving per unit £

EPC (2017)26

Outliers removed

Central

1,958

Median value

High

9,044

Mean value

Quantified estimate of impact (commercial & industrial)

Low

330

New

developments per year

New industrial and commercial orders for construction 2018-2026 (min)27

Assume compliant SuDS currently on 20-40% of new developments, so option applies to additional 60% (low), 70% (central) and 80% (high) of new development.

Central

401

As above
(mean)

High

477

As above (max)

Monetary value (commercial & industrial)

Low

1,838

Capex saving per unit £

EPC (2017)

Outliers removed

Central

1,958

Median value

High

9,044

Mean value

 

7.21 Developers: SAB fees

The annual impact on developers associated with SAB fees is as follows.

Low:

- £1,254,000

Central:

- £1,787,000

High:

- £2,409,000

 

These estimates are based on the information provided in Table 8.

23Public Policy Institute for Wales (2015) Future Need and Demand for Housing in Wales

24 The figures in the ‘value’ column have been adjusted to reflect the assumption (low value multiplied by 0.6, central by 0.7 and high by 0.8.

25 Based on Holmans, A. and Monk, S. (2010) Housing need and demand in Wales 20062026. Social Research Number 03/2010. Cardiff: Welsh Government

26Sustainable Drainage Systems on new developments, Analysis of evidence including costs and benefits of SuDS construction and adoption. Final Report for the Welsh Government, January 2017. This report is based on a comparison of the costs of SuDS and non-SuDS approaches at an overall scheme/development level, rather than the costs of specific or individual measures or technologies. It also encompasses all expected capital costs (e.g. off-site disposal of excavation arisings).

27 ONS, NEWOGOR New Orders for Construction: by Government Office Region (Wales), accessed April 2017

27


Table 8: Impact on developers: SAB fees

 

 

Value

Units

Source

Assumptions

Quantified

Low

2,100

Applications

Consultation with

Average number

estimate

Central

2,625

per year

local authorities

of applications

of impact

High

3,150

 

 

requiring SAB approval (though recognising that individual local authorities may see significantly fewer or more applications than this average).

 

 

 

 

 

Low 100, central

 

 

 

 

 

125, high 150, across 21 local authorities

Monetary value

Low

- 597

Fee per application

Defra (2010)

Original value (£507) updated to 2016 prices

 

Central

- 681

 

 

Average of low and high

 

High

- 765

 

 

Original value

 

 

 

 

 

(£650) updated to 2016 prices

 

7.22 Developers: start-up

The one-off impact on developers associated with start-up costs is as follows.

Low:

- £76,766

Central:

- £259,593

High:

- £548,472

 

These estimates are based on the information provided in Table 9. Table 9: Impact on developers: start-up

 

 

Value

Units

Source

Assumptions

Quantified

Low

4,550

Total days

WG

Number of developers (910)

estimate of

Central

9,100

 

analysis

assumed to be those involved

impact

High

13,650

 

of IDBR (see Annex

in 'Development of building projects'. We assume each developer invests 5 (low), 10

 

 

 

 

2)

(central) or 15 (high) person-days of transitional, one-off time (for training, skills, etc)

Monetary

Low

- 16.9

Cost per

Defra

Annual salary/related costs of

value

Central

- 28.5

day

(2010)

staff: Min £30,369 (av salary of

 

High

- 40.2

 

 

civil engineer), max £61,467

 

 

 

 

 

(£72,326 in 2016 prices), mean

 

 

 

 

 

(central) £51,348. Assume

 

28


 

 

 

 

 

1,800 days per FTE p.a. (8

 

 

 

 

 

hours/day x 5 days/week x 45

 

 

 

 

 

weeks/year)

 

7.23 Developers: connection charges avoided

The annual impact on developers associated with connection charges is as follows.

Low:

£716,000

Central:

£1,905,000

High:

£3,499,000

 

These estimates are based on the information provided in Table 10. Table 10: Impact on developers: Connection charges

 

 

Value

Units

Source

Assumptions

Quantified estimate of impact

Low

2,100

Applications per year

Consultation with local authorities

Average number of

applications requiring SAB approval (though recognising that individual local authorities may see significantly fewer or more applications than this average). Low 100, central 125, high 150, across 2128 local authorities

Central

2,625

High

3,150

Monetary value

Low

341

Charge per development

Defra (2010), using data from

Assume each development with compliant SuDS would

Central

726

 

High

1,111

 

DCWW29 and SVT30

save one application charge, one sewer connection charge and inspection charge. For

 

 

 

 

 

DCWW and SVT, these are, respectively: £155

 

 

 

 

 

(DCWW) and £114.90

 

 

 

 

 

(SVT); £183 (DCWW) and

 

 

 

 

 

£455.67 (SVT); £43

 

 

 

 

 

(DCWW) and £500 (SVT).

 

 

 

 

 

We take the average of each to generate a central value (£135 + £319 + £272

 

 

 

 

 

= £726), and low and high estimates for each to generate low (£341) and high (£1,111).

 

28 Based on the local authorities listed in Annex 1

29 Developer services schedule of charges 2016-17

30Developer charges 2015/16

29


7.24 Local authorities/SABs: start-up

The one-off impact on local authorities/SABs associated with start-up costs is as

follows.

Low:

- £420,000

Central:

- £525,000

High:

- £630,000

 

These estimates are based on the information provided in Table 11. Table 11: Impact on local authorities/SABs: start-up

 

 

Value

Units

Source

Assumptions

Quantified

Low

21

Number

-

-

estimate of

Central

21

of local

 

 

impact

High

21

authorities

 

 

Monetary

Low

- 20,000

Cost per

Consultation

Cost of 1 FTE for approx 3

value

Central

- 25,000

local

with local

months, plus additional set-

 

High

- 30,000

authority

authorities

up costs (e.g. IT, training)

 

7.25 Local authorities/SABs: Operation and maintenance of SuDS

The annual impact on local authorities/SABs associated with the operation and

maintenance of SuDS is as follows.

Residential

 

Low:

- £13,000

Central:

£29,000

High:

£38,000

 

Commercial and industrial

Low:

- £813

Central:

£1,000

High:

£1,000

 

These estimates are based on the information provided in Table 12.


30


Table 12: Impact on local authorities/SABs: Operation and maintenance of SuDS

 

 

Value

Units

Source

Assumptions

Quantified estimate of impact (residential)

Low

5,220

New homes per year

Public Policy Institute for Wales (2015)

Assume compliant SuDS currently on 20-40% of new developments, so option applies to additional 60% (low), 70% (central) and 80% (high) of new development.

Central

10,010

Housing White Paper (2012)

High

12,946

Information from local development plans provided by WG (March, 2017)

Monetary value

(residential)

Low

- 2.5

Opex saving per unit £

EPC (2017)

Median value

Central

2.9

Outliers removed

High

2.9

Mean value

Quantified estimate of impact (commercial & industrial)

Low

330

New

developments per year

New industrial and commercial orders for construction 2018-2026 (min)

Assume compliant SuDS currently on 20-40% of new developments, so option applies to additional 60% (low), 70% (central) and 80% (high) of new development.

Central

401

As above
(mean)

High

477

As above (max)

Monetary value (commercial & industrial)

Low

- 2.5

Opex saving per unit £

EPC (2017)

Median value

Central

2.9

Outliers removed

High

2.9

Mean value

 

7.26 Local authorities/SABs: Revenue from application/approval fees

The annual impact on local authorities/SABs associated with revenue from

application/approval fees is as follows.

Low:

£1,254,000

Central:

£1,787,000

High:

£2,409,000

 

These estimates are based on the information provided in Table 13.


31


Table 13: Impact on local authorities/SABs: Revenue from application/approval fees

 

 

Value

Units

Source

Assumptions

Quantified

Low

2,100

Applications

Consultation

Average number of

estimate of

Central

2,625

per year

with local

applications requiring

impact

High

3,150

 

authorities

SAB approval (though recognising that individual local authorities may see significantly fewer or more applications than this average). Low 100, central 125, high 150, across 21 local authorities

Monetary value

Low

597

Per

application

Defra (2010)

Original value (£507) updated to 2016 prices

 

Central

681

 

 

Average of low and high

 

High

765

 

 

Original value (£650) updated to 2016 prices

 

7.27 Local authorities/SABs: Monitoring and enforcement

The annual impact on local authorities/SABs associated with monitoring and

enforcement is as follows.

Low:

- £638,000

Central:

- £1,941,000

High:

- £3,797,000

 

These estimates are based on the information provided in Table 14. Table 14: Impact on local authorities/SABs: Monitoring and enforcement

 

 

Value

Units

Source

Assumptions

Quantified

Low

21

Total FTEs

Info provided

Each of 21 local

estimate of

Central

38

(full-time

by LAs (4

authorities/SABs in

impact

High

53

equivalents)

Apr 2017)

Wales requires 1.8 FTEs

 

 

 

 

 

(min 1, max 2.5)

Monetary

Low

- 30,369

Per FTE

Defra (2010)

Annual salary/related

value

Central

- 51,348

 

 

costs of staff: Min

 

High

- 72,326

 

 

£30,369 (av salary of civil engineer), max

 

 

 

 

 

£61,467 (£72,326 in

 

 

 

 

 

2016 prices), mean

 

 

 

 

 

(central) £51,348.

 

7.28 Property owners/occupiers: Amenity

The annual impact on property owners/occupiers associated with amenity is as

follows.

Low:

£269,000

Central:

£595,000

High:

£955,000

 

32


These estimates are based on the information provided in Table 15. Table 15: Impact on property owners/occupiers: Amenity

 

 

Value

Units

Source

Assumptions

Quantified estimate of impact

Low

13,050

Residents

Public Policy Institute for Wales (2015)

Assume compliant SuDS currently on 20-40% of new

 

Central

25,025

 

Housing White Paper (2012)

developments, so option applies to

 

High

32,365

 

Information from local development plans provided by WG (March, 2017)

additional 60% (low), 70% (central) and 80% (high) of new development.

Assume 2.5 residents per property

Monetary

Low

20.64

Per resident

BeST

Use values in BeST

value

Central

23.76

per year

 

associated with

 

High

29.52

 

 

'street improvements through greening'

 

7.29 General population: Carbon

The PV impact on the general population associated with carbon is as follows.

Low:                £96,000 (1,918 tonnes carbon sequestered)

Central:          £336,000 (6,711 tonnes carbon sequestered)

High:              £642,000 (12,845 tonnes carbon sequestered)

These estimates are based on the information provided in Table 16. Table 16: Impact on general population: Carbon

 

 

Value

Units

Source

Assumptions

Quantified

Low

6,868

Additional

As per previous

Assume additional 1

estimate of

Central

24,030

trees

impacts for

(low), 2 (central) and

impact

High

45,995

 

residential and commercial & industrial development

3 (high) medium-sized trees per new home, and 5 (low), 10 (central) and 15

 

 

 

 

 

(high) trees per new commercial and industrial development.

Monetary

Low

34

£ per tonne

Based on

PV calculated

value

Central

67

CO2e

values in BeST

automatically in

 

High

101

 

for non-traded price of carbon

BeST

 

 

 

 

(2020) (values vary slightly from 2018 to

 

 

 

 

 

2026)

 

 

33


7.30 General population: Education

The annual impact on the general population associated with education is as

follows.

Low:

£10,000

Central:

£30,000

High:

£73,000

 

These estimates are based on the information provided in Table 17. Table 17: Impact on general population: Education

 

 

Value

Units

Source

Assumptions

Quantified

Low

600

Student visits

-

Assume 2 (low), 5

estimate of

Central

1,500

per year

 

(central) and 10

impact

High

3,000

 

 

(high) schools built with compliant SuDS per year, each leading to additional

 

 

 

 

 

300 student visits (10 visits for 30 children each) to see and study SuDS

Monetary

Low

15.94

Value of visit

BeST

Use values in BeST

value

Central

20.16

 

 

associated with 'value

 

High

24.38

 

 

of visit'

 

Option 3: Planning approach

7.31 This option provides an expectation that SuDS will be provided on all minor and major development (more than 1 dwelling or sites larger than 0.1 hectares) wherever this is appropriate and unless demonstrated to be inappropriate. It entails the use of planning conditions or planning obligations to ensure that there are clear arrangements in place for ongoing maintenance over the lifetime of the development where SuDS are used. Where SuDS are not used, current arrangements (e.g. related to O&M) are expected to continue (i.e. no change from the baseline).

7.32 The impacts considered likely under Option 3 are largely the same as those considered likely under Option 2 and included in Table 5. The differences under Option 3 compared with Option 2 are that, under Option 3, we assume:

·           There are no start-up costs for SABs or developers;

·           There are no SAB-related fees for developers or concurrent revenue for SABs;

·           Construction and O&M costs are applicable to 30% (low), 40% (central) and 50% (high) of the developments that would achieve compliant SuDS under Option 2 (i.e. 50-70% of new developments do not include compliant SuDS);

34


·         Additional/reduced connection charges are applicable to 30% (low), 40% (central) and 50% (high) of the developments that would achieve compliant SuDS under Option 2;

·         Amenity, carbon and education impacts are applicable to 30% (low), 40% (central) and 50% (high) of the developments that would achieve compliant SuDS under Option 2; and

·         There are additional, recurring costs to local authorities/SABs of consultation, planning conditions and funding agreements in relation to surface water drainage on all planning applications. General consultation requirements, and consultation requirements for statutory and other consultees, are expected to be dealt with through standing advice, as with existing planning processes.

7.33 Table 18 summarises the PV impacts for Option 3. Each valued impact is considered, in turn, below Table 18. The NPV for Option 3 is estimated to be £54.3m (range £20.4m to £460.4m). It is positive suggesting that the net benefits to society outweigh the net costs to society.

Table 18: Summary table of PV impacts for Option 3 (2018-26)

Group

Impact

Total PV impact (£ million)

 

 

Low

Central

High

Developers

Construction

24.1

64.2

477.9

Connection charges

1.7

6.0

13.8

Local

authorities/SABs

Consultation

- 1.0

- 2.8

- 6.0

O&M

- 0.0

0.1

0.2

Monitoring & enforcement

- 5.0

- 15.3

- 29.9

Property

owners/occupiers

Amenity

0.6

1.9

3.8

General
population

Carbon

0.0

0.1

0.3

Education

0.0

0.1

0.3

 

TOTAL

20.4

54.3

460.4

 

7.34 Developers: Construction of SuDS

The annual impact on developers associated with the construction of SuDS is as

follows.

Residential

 

Low:

£2,878,000

Central:

£7,839,000

High:

£58,541,000

 

35


Commercial and industrial

Low:

£182,000

Central:

£314,000

High:

£2,158,000

 

These estimates are based on the information provided in Table 19. Table 19: Impact on developers: Construction of SuDS

 

 

Value

Units

Source

Assumptions

Quantified estimate of impact (residential)

Low

1,566

New homes per year

Public Policy Institute for Wales (2015)

Under this option, assume 30% (low), 40% (central) and 50% (high) take-up of compliant SuDS compared to Option 1.

Central

4,004

Housing White Paper (2012)

High

6,473

Information from local development plans provided by WG (March, 2017)

Monetary value

(residential)

Low

1,838

Capex saving per unit £

EPC (2017)

Outliers removed

Central

1,958

Median value

High

9,044

Mean value

Quantified estimate of impact (commercial & industrial)

Low

99

New

developments per year

New industrial and commercial orders for construction 2018-2026 (min)

Under this option, assume 30% (low), 40% (central) and 50% (high) take-up of compliant SuDS compared to Option 1.

Central

160

As above
(mean)

High

239

As above (max)

Monetary value (commercial & industrial)

Low

1,838

Capex saving per unit £

EPC (2017)

Outliers removed

Central

1,958

Median value

High

9,044

Mean value

 

7.35 Developers: connection charges avoided

The annual impact on developers associated with connection charges is as follows.

Low:

£215,000

Central:

£762,000

High:

£1,749,000

 

These estimates are based on the information provided in Table 20.


36


Table 20: Impact on developers: Connection charges

 

 

Value

Units

Source

Assumptions

Quantified

Low

630

Applications

Consultation

Average number of

estimate

Central

1,050

per year

with local

applications requiring SAB

of impact

High

1,575

 

authorities

approval (though

recognising that individual local authorities may see significantly fewer or more applications than this average). Low 100, central

 

 

 

 

 

125, high 150, across 21 local authorities. Assume

 

 

 

 

 

30% (low), 40% (central) and 50% (high) take-up of compliant SuDS

Monetary value

Low

341

Charge per development

Defra (2010), using data from

Assume each development with compliant SuDS would

Central

726

 

High

1,111

 

DCWW31 and SVT32

save one application charge, one sewer connection charge and inspection charge. For

 

 

 

 

 

DCWW and SVT, these are, respectively: £155

 

 

 

 

 

(DCWW) and £114.90

 

 

 

 

 

(SVT); £183 (DCWW) and

 

 

 

 

 

£455.67 (SVT); £43

 

 

 

 

 

(DCWW) and £500 (SVT).

 

 

 

 

 

We take the average of each to generate a central value (£135 + £319 + £272

 

 

 

 

 

= £726), and low and high estimates for each to generate low (£341) and high (£1,111).

 

7.36 Local authorities/SABs: consultation

The annual impact on local authorities/SABs associated with consultation is as

follows.

Low:

- £128,000

Central:

- £359,000

High:

- £759,000

 

These estimates are based on the information provided in Table 21.

31 Developer services schedule of charges 2016-17

32 Developer charges 2015/16

37


Table 21: Impact on local authorities/SABs: Consultation

 

 

Value

Units

Source

Assumptions

Quantified

Low

4.2

Number of

Consultation

Assume 30% take-up of

estimate

 

 

FTEs

with local

compliant SuDS. 1 FTE per

of impact

 

 

required

authorities and Defra

150 major and minor drainage applications/year

 

Central

7.0

 

(2010)

Assume 40% take-up of compliant SuDS. 1 FTE per

 

 

 

 

 

150 major and minor drainage applications/year

 

High

10.5

 

 

Assume 50% take-up of compliant SuDS. 1 FTE per

 

 

 

 

 

150 major and minor drainage applications/year

Monetary

Low

- 30,369

Per FTE

Defra

Annual salary/related costs

value

Central

- 51,348

 

(2010)

of staff: Min £30,369 (av

 

High

- 72,326

 

 

salary of civil engineer), max

 

 

 

 

 

£61,467 (£72,326 in 2016 prices), mean (central)

 

 

 

 

 

£51,348.

 

7.37 Local authorities/SABs: Operation and maintenance of SuDS

The annual impact on local authorities/SABs associated with the operation and

maintenance of SuDS is as follows.

Residential

 

Low:

- £4,000

Central:

£12,000

High:

£19,000

 

Commercial and industrial

Low:

- £244

Central:

£467

High:

£694

 

These estimates are based on the information provided in Table 22.


38


Table 22: Impact on local authorities/SABs: Operation and maintenance of SuDS

 

 

Value

Units

Source

Assumptions

Quantified estimate of impact (residential)

Low

1,566

New homes per year

Public Policy Institute for Wales (2015)

Under this option, assume 30% (low), 40% (central) and 50% (high) take-up of compliant SuDS compared to Option 1.

Central

4,004

Housing White Paper (2012)

High

6,473

Information from local development plans provided by WG (March, 2017)

Monetary value

(residential)

Low

- 2.5

Opex saving per unit £

EPC (2017)

Median value

Central

2.9

Outliers removed

High

2.9

Mean value

Quantified estimate of impact (commercial & industrial)

Low

99

New

developments per year

New industrial and commercial orders for construction 2018-2026 (min)

Under this option, assume 30% (low), 40% (central) and 50% (high) take-up of compliant SuDS compared to Option 1.

Central

160

As above
(mean)

High

239

As above (max)

Monetary value (commercial & industrial)

Low

- 2.5

Opex saving per unit £

EPC (2017)

Median value

Central

2.9

Outliers removed

High

2.9

Mean value

 

7.38 Local authorities/SABs: Monitoring and enforcement

The annual impact on local authorities/SABs associated with monitoring and

enforcement is as follows.

Low:

- £638,000

Central:

- £1,941,000

High:

- £3,797,000

 

These estimates are based on the information provided in Table 23.


39


Table 23: Impact on local authorities/SABs: Monitoring and enforcement

 

 

Value

Units

Source

Assumptions

Quantified

Low

21

Total FTEs

Info provided

Each of 21 local

estimate of

Central

38

(full-time

by LAs (4 Apr

authorities/SABs in

impact

High

53

equivalents)

2017)

Wales requires 1.8

 

 

 

 

 

FTEs (min 1, max 2.5)

Monetary

Low

- 30,369

Per FTE

Defra (2010)

Annual salary/related

value

Central

- 51,348

 

 

costs of staff: Min

 

High

- 72,326

 

 

£30,369 (av salary of civil engineer), max

 

 

 

 

 

£61,467 (£72,326 in

 

 

 

 

 

2016 prices), mean

 

 

 

 

 

(central) £51,348.

 

7.39 Property owners/occupiers: Amenity

The annual impact on property owners/occupiers associated with amenity is as

follows.

Low:

£81,000

Central:

£238,000

High:

£478,000

 

These estimates are based on the information provided in Table 24. Table 24: Impact on property owners/occupiers: Amenity

 

 

Value

Units

Source

Assumptions

Quantified estimate of impact

Low

3,915

Residents

Public Policy Institute for Wales (2015)

Assume 2.5 residents per property. Under this option, assume

 

Central

10,010

 

Housing White

30% (low), 40%

 

 

 

 

Paper (2012)

(central) and 50%

 

High

16,182

 

Information from local development plans provided

(high) take-up of compliant SuDS compared to Option 1.

 

 

 

 

by WG (March, 2017)

 

Monetary

Low

20.64

Per resident

BeST

Use values in BeST

value

Central

23.76

per year

 

associated with

 

High

29.52

 

 

'street improvements through greening'

 

7.40 General population: Carbon

The PV impact on the general population associated with carbon is as follows.

Low:                £29,000 (575 tonnes carbon sequestered)

Central:          £134,000 (2,684 tonnes carbon sequestered)

High:              £321,000 (6,422 tonnes carbon sequestered)


40


These estimates are based on the information provided in Table 25. Table 25: Impact on general population: Carbon

 

 

Value

Units

Source

Assumptions

Quantified

Low

2,060

Additional

As per previous

Assume additional 1

estimate of

Central

9,612

trees

impacts for

(low), 2 (central) and

impact

High

22,997

 

residential and commercial & industrial development

3 (high) medium-sized trees per new home, and 5 (low), 10 (central) and 15 (high) trees per new commercial and industrial

development. Under this option, assume

 

 

 

 

 

30% (low), 40%

 

 

 

 

 

(central) and 50%

 

 

 

 

 

(high) take-up of compliant SuDS compared to Option 1.

Monetary

Low

34

£ per tonne

Based on

PV calculated

value

Central

67

CO2e

values in BeST

automatically in BeST

 

High