Sustainable urban drainage systems: costing and valuing
14 July 2016
New research will provide guidance for surveyors involved in the costing and valuing of sustainable urban drainage systems, says John Williams
Recent flooding has sparked debate about the best ways to manage risks to developments, and there have been many calls for the wider use of sustainable urban drainage systems (SuDS).
However, only 40% or so of new developments in England include SuDS at present, and 1 of the reasons for this is uncertainty over costing, adoption and valuation compared with conventional piped drainage.
Previous studies of SuDS valuation have highlighted uncertainties and inconsistencies between projects in the boundaries, maintenance costings and lifespan estimates used. In practice, different projects employ different techniques, making comparisons difficult.
As multifunctional green infrastructure, SuDS provides effective drainage by maintaining pre-development hydrology, but offers a range of benefits beyond water quantity management. SuDS can significantly improve water quality and provide a range of other ecosystem services in terms of amenity, habitat, human health and reduced energy use.
Yet uncertainty over how these benefits are evaluated and who eventually pays for them complicates financial analysis of SuDS.
RICS has therefore produced an information paper for members to make them aware of the issues around green infrastructure and the externalities of traditional valuation practices.
However, the paper does not give stakeholders specific guidance on how to integrate these values effectively into their decision-making. The issue of valuation and ecosystem services was identified as the main limitation in “Taking SuDS Forward”, the theme of the SUDSnet 2015 conference.
The School of Civil Engineering at the University of Portsmouth has recently been awarded a Natural Environment Research Council green infrastructure innovation grant to work with RICS and other partners over 2 years to develop professional guidance for surveyors in costing and valuing SuDS.
The project partners represent a cross-section of SuDS stakeholders including professional bodies, developers, water companies, designers and local authorities. These include First Wessex, Atkins Global, Hampshire County Council, Southern Water, the Environment Agency (EA) and the Department for Environment, Food and Rural Affairs. These partners will form a steering group and provide case studies and expertise to inform and direct the project.
Although useful guides have been produced by the Construction Industry Research and Information Association (CIRIA) and the EA, there is no standardised professional guidance available for surveyors to help them value the following aspects of SuDS.
Figure 1: Residents value the high-quality green space that SuDS can provide
Construction, adoption and maintenance
Several studies have suggested that SuDS has lower construction costs than conventional drainage. However, consultation with specialist design practices suggests that site-specific factors lead to uncertainties in cost estimates, especially in relation to the boundary between SuDS and public open space.
There are also several maintenance guides, but there is not a standardised process for costing the long-term maintenance of SuDS.
This means that “adoption” of SuDS is often a key issue, as developers are wary of long-term commitments that are often poorly defined. Legislation has been effective in identifying adoption bodies in Scotland, but changes to the implementation of the Flood and Water Management Act 2010 mean there is less clarity in England and Wales.
The University of Portsmouth project will review and assess current methods of costing SuDS construction and whole-life cost, building on the recent work by the EA and the engineering consultancy HR Wallingford, in liaison with quantity surveyors and others involved in the financial planning of SuDS.
Complete SuDS projects will be reviewed to compare the predicted costs to actual ones, and also assess impacts associated with uncertain future conditions. Standardised professional guidance on the costing and valuation of SuDS will be issued to lift a major barrier to its inclusion in developments.
Benefit to development
Assessment of the amenity value of SuDS for residents in project costings is probably less well defined than maintenance. RICS has just published a draft information paper for surveyors on Placemaking and Value that contains case studies, but it concludes that the current evidence base is “unclear”.
There is some evidence that residents value the high-quality green space that SuDS can provide, and that this translates into quicker house sales or higher house prices. However, there is also evidence of concern from potential residents about the perceived safety and nuisance risks of SuDS.
Such concerns could be aggravated in schemes that pay less attention to landscaping and maintenance. Designers and consultants have suggested that designs can often be compromised by pressure to minimise the area used for SuDS, due to the uncertainty of valuing amenity and property against maximising return for the development.
This means that either SuDS is not used or is “hard” SuDS such as underground storage rather than green infrastructure. A valuation toolkit to identify the commercial benefits of SuDS would allow its land take to be properly compared with benefit, encouraging the best possible designs.
The University of Portsmouth project will review valuation approaches and collate evidence for on-site SuDS’ financial benefits, that is hedonic pricing, contingency valuations and preventative expenditure. Case studies with different characteristics and SuDS components will be selected and secondary data on the property market collated.
Residents and local property professionals will be consulted about their perceptions of different SuDS components. This will enable quantification of the value contribution of SuDS in development projects, and better understanding on the part of end users and decision-makers. The data will be analysed to assess SuDS’ impact on property values and produce a recommended valuation approach.
Figure 2: Examining sustainable drainage near homes
Consideration of externalities
Various projects have aimed to assign a value to the ecosystem services provided by SuDS and have developed facilities such as the CIRIA Benefits of SUDS Tool (BeST) and the green infrastructure valuation toolkit.
These give valuation estimates as a generic assessment, but who pays for the benefits is often unclear. A recent UK Water Industry Research report has explored how to engage with wider ‘beneficiaries’, including bodies concerned with flood protection, water quality, habitat and health – to increase the likelihood of contributory funding – but this is not yet common practice.
The University of Portsmouth project will devise a framework for how these benefits should be identified by surveyors and developers and then develop communication strategies and interpretative guidance to ensure that this is properly conveyed and residents are aware of the benefits. Case studies will also be prepared on how to secure funding and identify the benefits from including high-quality SuDS in projects so they can be justified by other means.
Common to all the above issues is the uncertainty associated with costing and valuation of SuDS. Given the potential benefits of SuDS, an industry-relevant economic evaluation is vital to justify their inclusion in schemes on a commercial basis.
The toolkit to be produced by the University of Portsmouth project will be disseminated by RICS through conferences, publications and CPD events, and should form the basis of future professional guidance notes.
The valuation of green infrastructure and ecosystem services is an area that is likely to become increasingly important, and the development of legally robust and standardised valuation techniques offer an opportunity for the surveying profession to make a significant contribution to sustainable development.
Dr John Williams is Reader in Environmental Technology in the School of Civil Engineering and Surveying at the University of Portsmouth