News & Updates
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Updates for 2026-27
Reform of FCERM Funding
The announcement of Defra’s reform of FCERM funding has led to some changes to policy and subsequently to some elements of appraisal in April 2026. Other changes to appraisal may be forthcoming and it may be necessary to update the Multi-Coloured Handbook as these are introduced. Users are recommended to refer to the most up-to-date guidance appropriate to the appraisal context.
High level appraisal
From April 2026 the Environment Agency have introduced a pre-Gateway 0 appraisal for initial high-level prioritisation. To support this process a Rapid Appraisal Tool for Economics (RATE) has been created which utilises MCM data and many approaches captured across the MCH chapters. Methods for calculating economic benefits – GOV.UK
Capping and write off
The capping of damages and the ‘writing off’ of a property have been removed from policies for English appraisal. This is replaced by the guidance frequently flooded properties and write‑off introduces a revised approach to estimating damages and benefits for properties at very high flood risk which assumes continued occupation of properties and behavioural adaptation. This change affects principally Chapter 4 and Chapter 5, but also situations whereby uplift factors based on property damages are utilised to estimate additional losses (e.g. Local Authority costs in Chapter 6). This change in policy is for England. Appraisers in other countries are recommended to refer to local guidance as the policy for capping and write off may remain. Frequently flooded properties and write-off in FCERM appraisal – GOV.UK
Update of the Green Book
2026 has also seen the publication of a new HM Treasury Green Book. Changes where necessary have been made to the chapters to reflect this.
Chapter 6
As usual many values have been updated to reflect current estimates, however, users’ attention is particularly drawn to the separation in values between England and Wales for the compensation for water supply to be disconnected. Further changes related to willingness-to-pay to avoid disruption to electricity are anticipated.
Chapter 9
In England the approach to valuing agricultural land and output has very recently changed. It has not been possible to fully integrate all of these changes into the text of the handbook prior to this publication (MCH 2026 version 1). However, the three scenarios presented in the guidance are comparable to those presented in Chapter 9. It is anticipated that a further update to this chapter may be necessary. FCERM guidance for RMAs: valuation of agricultural land and output for appraisal purposes – GOV.UK
Chapter 10
This chapter concerning the environmental benefits and costs has been removed from this version of the MCH. Please refer to the section “Environment and ecosystems benefit” at Environment Agency 2026 Flood and coastal erosion risk management appraisal guidance manual – 10. Identify, quantify and value impacts – Guidance – GOV.UK