Flood and coastal defence: develop a project business case

How to get technical and financial approval for flood and coastal erosion risk management (FCERM) projects.

HM Treasury has updated the Green Book – its guidance on how to appraise and evaluate government policies, projects and programmes.

You can continue to use this appraisal guidance on developing a project business case until we update it. You can also follow:

Before you can submit a business case for technical and financial approval, your project, strategy or study must be included in the programme of flood and coastal risk management schemes.

Find out how to submit your flood or coastal erosion risk management project proposal to be included in the programme.

You’ll need technical and financial approval before you can claim FCERM grant payments.

1. Contact the local Environment Agency Area Flood and Coastal Risk Manager (AFCRM) who is your local contact

Tell your local Environment Agency contact that you’re starting your appraisal - you can ask them for help and advice.

You should also agree a submission date together.

Tell your local Environment Agency contact when you start to write a business case or a strategy appraisal report (StAR), or if the whole life cost of your project is likely to exceed £50 million. The Environment Agency tells the Department for Environment, Food and Rural Affairs (Defra) about projects with an estimated whole life cost of more than £50 million.

2. Develop your business case

You must follow the appraisal guidance as you develop a business case for your project.

The appraisal process:

  • identifies the best approach to reduce the risk of flood or coastal erosion
  • applies to new and on-going flood and coastal erosion risk management (FCERM) strategies and projects funded by the government

3. How to apply for funding

You need to use the right template and form. Send 2 copies of your completed business case and the forms to the local Environment Agency contact by email or post. You can submit the copies on a CD or DVD.

3.1 Studies

Use the FCERM7 form to make an application to apply for funding to start a study or a strategy. You can present the study in a format of your choice.

A strategy should be presented on the strategy appraisal report (StAR) template which is available from your local Environment Agency contact.

A study could lead to a strategy, a management plan, investigate options for schemes of works, or investigate the environmental impacts of FCERM on an area of statutory environmental designation. The grant memorandum explains the full definition.

3.2 Schemes

Use the FCERM2 form to make an application for a grant to undertake an FCERM scheme. There are 2 templates you can use to present the business case, depending on the value of the scheme:

3.3 Coastal erosion schemes

Use both forms for coastal erosion schemes:

  • CPA1 – certificate of statutory consultations and response for coastal erosion schemes
  • CPA2 – application for formal approval of coast protection project

3.4 Other requirements

You must complete a contributions and efficiencies data sheet for all schemes. Contact your local Environment Agency contact for a copy. You must also demonstrate compliance with the Equalities Act 2010.

Check with the local Environment Agency contact that your project has allocated funding. This might be an indicative allocation of government capital grant, partnership funding or a mixture of both.

4. Getting technical approval

Your application will be reviewed by the Environment Agency. The review provides you and the approving officer with assurance that the project:

  • is good value for money
  • can be completed within the budget and time stated in the business case

There are 4 assurance review categories. The assurance review can be carried out by the:

  • Area Flood and Coastal Risk Manager (AFCRM) – value less than £500,000
  • National Project Assurance Service (NPAS) – value less than £2 million
  • National Project Assurance Board (NPAB) – value less than £10 million
  • Large Projects Review Group (LPRG) – value exceeding £10 million

The monetary value of your application will decide the review category.

4.1 Assurance by AFCRM / NPAS / NPAB

We aim to give you the results of the review within 10 working days of receipt of the application. The review may recommend a discussion between you, the assurance reviewers and the local Environment Agency contact. Following the review, you may be asked to submit a revised application.

4.2 Assurance by the LPRG

The LPRG meets monthly. The local Environment Agency contact will tell LPRG when your application is due and will send it to them before the monthly submission date. You and the local Environment Agency contact will be asked to present the application by teleconference.

The LPRG will then complete the assurance review and send you the results. You may be asked to attend a meeting with the local Environment Agency contact and the LPRG to resolve complex issues. Following the review, you may be asked to submit a revised application.

5. Get financial approval (excluding coastal erosion work)

When the project has been assured, the local Environment Agency contact will submit the application and the assurance review record for financial approval.

Once approved, the Environment Agency will write to you with a grant approval number. You need this to apply for interim and final capital grant payments.

5.1 Coastal erosion work (excluding studies): tendering stage

The process is different for coastal erosion work (excluding studies). To get technical approval you should send a CPA1 and your business case to the local Environment Agency contact. After you get technical approval, you can ask for tenders to do the work.

To apply for formal grant approval you need to send the CPA2, with supporting information (the business case updated with tender prices and the tender assessment report) to the local Environment Agency contact.

After the tendering stage, your local Environment Agency contact will write to you with a grant approval number. This is needed to apply for capital grant-in-aid payments.

6. Exceptions to the process: emergency works

You do not need to wait for formal approval from the Environment Agency to carry out emergency works (section 5 (6) of the Coast Protection Act). If you intend to claim capital grant for emergency works you will need to seek both technical and financial approval as soon as possible.

Note that approval is required from Natural England if you need to do emergency works on designated environmental sites - you will not be able to claim capital grant-in-aid without it.

Grant memorandum

The grant memorandum for local authorities and internal drainage boards provides a comprehensive explanation of the process you need to follow. You can get a copy of old versions by emailing

Contact the Environment Agency

Environment Agency

PO Box 544

S60 1BY

Published 27 March 2014
Last updated 24 April 2020 + show all updates
  1. Content that was on Section 2 of this page is now on the appraisal guidance landing page (

  2. Note added to say that although HM Treasury has updated the Green Book you should continue to use this current policy and guidance until we update them.

  3. Changes made to the assurance guidance and links to new forms.

  4. Updated link to appraisal policy guidance and adapting to climate change guidance in section 2.

  5. Forms and guidance updated.

  6. EA has changed the way it assures projects between £100,000 and £10 million and clarification of the appraisal process.

  7. Links to the appraisal documents on EA and Defra archived websites fixed

  8. First published.