Natural flood management benefit method
Published 3 March 2026
Applies to England
© Crown copyright 2026
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1. Why we developed the natural flood management benefits method
We recognise that calculating the flood and wider benefits of standalone natural flood management (NFM) projects can be challenging and disproportionately costly.
To help reduce costs and delays and to enable NFM projects to move more quickly into delivery, we have developed a national NFM benefits method and calculator. These are designed specifically for standalone NFM projects aiming to reduce the risk of surface water and river flooding.
They provide a consistent and objective way for projects to assess the flood and wider benefits of NFM interventions.
2. How the natural flood management benefits method calculates benefits
The Environment Agency’s national natural flood management benefits method is set out in the estimating the benefits of natural flood management research report.
The method calculates the total potential flood damages avoided from an NFM project.
This is based on:
- the water storage potential of the NFM measures
- their proximity to areas at flood risk from rivers and surface water using National Flood Risk Assessment (NaFRA) data
- relevant local catchment characteristics
The method also estimates wider benefits of NFM projects based on anticipated land use change. It includes changes in:
- agriculture
- forestry
- carbon sequestration
- biodiversity
- air quality
These wider benefits are assessed using approaches consistent with the Environment and Historic Environment Outcomes Valuation (EHOV) guidance. They are integrated directly into the calculator so there is no need to complete a separate EHOV assessment.
3. When and how to use the natural flood management benefits method
The method can be used to estimate the benefits of an NFM project designed to reduce river or surface water flooding. A project may include one or more NFM interventions that aim to benefit a specific place.
The method should not be used to calculate the benefits of:
- coastal NFM projects
- projects where NFM is combined with hard engineering or other resilience measures
- NFM projects over £3 million in total value
Multiple NFM interventions may benefit the same place or benefit multiple places located within 5 km downstream of the lowest (most downstream) intervention. If this is the case, you should group those interventions and treat them as a single project. This avoids double counting. The benefits method should then be run once for the whole project.
Where NFM interventions benefit separate locations, the benefits method should be run for each location as separate projects.
To achieve overall value for money, our experience from the NFM programme shows that NFM projects typically need to demonstrate a benefit-cost ratio of at least 0.8. This applies when considering flood reduction benefits only.
Standalone NFM projects that plan to implement measures across a landscape or catchment, with a value greater than £3 million, will need to email the Environment Agency. Our specialists will be able to discuss your project with you in more detail.
4. How to access and use the NFM benefits calculator
The NFM benefits calculator is a simple spreadsheet that enables projects to carry out the national NFM benefits method consistently and easily.
The NFM benefits calculator uses datasets from the MultiColoured Manual (MCM), so users must hold a valid MCM licence. Organisations without a current licence can obtain one through the MCMOnline membership service.
Once you have a valid MCM licence, you can request a copy of the NFM benefits calculator and user guide by emailing FCRM_Investment@environment-agency.gov.uk.