Develop an FCERM project business case

As a risk management authority (RMA) you can appraise your FCERM project, prepare your business case and submit it for technical and financial approval.

This information is for project teams from both the Environment Agency and other RMAs. You should have read Flood and coastal erosion risk management projects and funding guidance so that you understand the steps you need to take when you develop an FCERM project.

Before you apply for technical and financial approval you must include your project in the programme of FCERM schemes by submitting an FCERM project proposal.

You’ll need to appraise your FCERM project so you can prepare your business case. Your FCERM project will need technical and financial approval before you can submit FCERM grant claims and financial reports.

The grant memorandum for local authorities and internal drainage boards provides a comprehensive explanation of the process you need to follow.

Tell the Environment Agency you’re preparing an FCERM business case

Your local Environment Agency partnership and strategic overview (PSO) officer will tell the Environment Agency area flood and coastal risk manager (AFCRM):

  • when you start your appraisal
  • when you start to write a business case or a strategy appraisal report (StAR)
  • if the whole life cost of your project is likely to exceed £50 million - this is because there may be a different approach to developing a business case

You should also plan a business case submission date with your local PSO officer.

Appraise your project and develop a business case

You should follow the FCERM appraisal guidance. This will help you to easily prepare your business case.

The appraisal guidance explains how to:

  • choose and maintain the right type of appraisal
  • use the right methods and calculations
  • set objectives, identify, assess and select the best option
  • engage with stakeholders and partners to achieve the best outcomes

The Environment Agency follows the HM Treasury five case model. You must use this model when writing your business case.

You must develop a single stage business case if your project is under £3 million. This asks for authorisation for the full project value based on the detailed design and tendered prices.

If your project costs more than £3 million, you must develop the case in 3 stages:

  1. the strategic outline case stage - this authorises an investigation to work out the best option and commercial strategy
  2. the outline business case stage - this shows results of the investigation and seeks authorisation to complete the detailed design and tender prices
  3. the full business case stage - this asks for authorisation for the full scheme value based on the detailed design and tendered prices

All RMAs should use the Environment Agency business case template to write the business case for a project. The business case guidance explains what you need at each stage of the business case. It also describes what you need to do differently if your project is either RMA-led or Environment Agency led.

You must use the appraisal type selector to choose the right template for your project. This will help you identify your project type and the appraisal route you should follow.

Remember to update your partnership funding calculator as you develop your business case and decide on your preferred option.

Submit your business case for technical and financial approval

When you have completed your FCERM project business case you should email it to your local PSO officer.

You should include the correct application form with your submission. Which form you should use depends on the type of project you’re submitting.

Flood risk management projects

You should submit your flood risk management project business case with the FCERM2 application for grant form.

Coastal erosion risk management projects

There are extra requirements for coastal erosion risk management projects (excluding studies) promoted under the Coast Protection Act.

You should submit your business case with the CPA1 Certificate of statutory consultations and responses form. You can ask for tenders to do the work after the Environment Agency has given you technical approval.

To apply for formal grant approval you need to send the CPA2 application for formal approval of a coast protection project form. You must include an updated business case with tender prices and a tender assessment report.

After the tendering stage, your local Environment Agency contact will write to you with a grant approval number. You need this to apply for capital grant-in-aid (GIA) funding payments.

Studies or strategies

If you need to develop a study or strategy you should submit the FCERM7 application for approval of studies and strategies form first.

You should present a strategy using the strategy appraisal report (StAR) template. This is available from your local PSO officer. You can present a study in your choice of format.

A study could:

  • investigate options for a scheme leading to a strategy or management plan
  • investigate the environmental impacts of works

The grant memorandum explains the full definition of a study or strategy.

Get project assurance and technical approval

The Environment Agency will review your business case.

This will give you and the approving officer assurance that:

  • your project is good value for money
  • you can complete your project within the budget and time stated in your business case

The total cost of your project will decide who carries out the review:

  • FCERM capital projects with a total cost of less than £3 million will be reviewed by the local Environment Agency team
  • other FCERM projects will be reviewed by an independent assurance board

After the review, we may contact you with questions or ask you to submit a revised business case or application.

Get financial approval (excluding coastal erosion work)

When the Environment Agency has approved the project the local PSO officer will submit the application and the assurance review record for financial approval.

The Environment Agency will write to you with a grant approval number. You need this to apply for interim and final GIA funding payments.

Exceptions to the process - emergency works

You do not need to wait for formal approval from the Environment Agency to carry out emergency works under section 5 (6) of the Coast Protection Act.

If you plan to claim capital grant for emergency works you will need to get both technical and financial approval as soon as possible.

You will need approval from Natural England if you need to do emergency works on designated environmental sites. You will not be able to claim capital GIA funding without this approval.

Other requirements

You must:

  • complete a contributions and efficiencies data sheet for all schemes - your local PSO officer can provide you with a copy
  • show compliance with the Equality Act 2010
  • check with the local PSO officer that you have been allocated your project funding - this might be an indicative allocation of government capital grant, partnership funding or a mixture of both

If you need help or advice

Find out about our community of practice or ask for advice from your local PSO officer.

Published 1 September 2021
Last updated 18 August 2023 + show all updates
  1. Updated to reflect the new approach for assurance of projects costing less than £3m, and the use of the appraisal type selector.

  2. First published.