Cost Benefit Analysis to Reduce the Risk of Fire ... - …

1 A Cost Benefit Analysis of Options to Reduce the Risk ofFire and Rescue in Areas of New build HomesFire Research Series 1 , opportunity, prosperityA Cost Benefit Analysis of Options to Reduce the Risk ofFire and Rescue in Areas of New build HomesFire Research Series 1/2010 February 2010 Department for Communities and Local GovernmentProject TeamSt phane Gros (former NERA employee), Michael Spackman, Stewart CarterThe findings and recommendations in this report are those of the authors and do notnecessarily represent the view of the Department for Communities and for Communities and Local GovernmentEland HouseBressenden PlaceLondonSW1E 5 DUTelephone: 0303 444 0000 Website.

2 Queen s Printer and Controller of Her Majesty s Stationery office, 2010 Copyright in the typographical arrangement rests with the publication, excluding logos, may be reproduced free of charge in any format or medium for research, private study or for internal circulation within an organisation. This is subject to it being reproduced accurately and not used in a misleading context. The material must be acknowledged as Crown copyright and the title of the publication other use of the contents of this publication would require a copyright licence. Please apply for a Click-Use Licencefor core material at , or by writing to the Office of Public SectorInformation, Information Policy Team, Kew, Richmond, Surrey TW9 : you require this publication in an alternative format please email and Local Government PublicationsTel: 0300 123 1124 Fax: 0300 123 1125 Email: via the Communities and Local Government website: 2010 Product code: 09 FRDO 6251 ISBN: 978 1 4098 2260 8 This is printed on75% recycled paper75%ContentsExecutive 7 Chapter 1: Introduction.

3 Context .. Purpose of the Study .. Structure of the Report ..11 Chapter 2: Development in the Thames Gateway and its Implications for the fire and Rescue Services .. Background to the Thames Gateway .. Targets for the Thames Gateway Redevelopment .. Development of Projections for CBA Implications for the fire and Rescue Services ..18 Chapter 3: Methodological Framework .. The Baseline and Investment Alternatives .. The Study Time Horizon and Social Discount Use of the FSEC Toolkit and National Model .. Estimation of Averted Damages .. Estimation of FRS Resource Estimation of Other Impacts.

4 35 Chapter 4: Cost and Effectiveness Assumptions .. Overview of Data Sprinklers Cost Estimates .. Estimates of Sprinkler Cost and Effectiveness of Traditional FRS Other Assumptions Used in the Valuation of Benefits .. Comparisons with BRE (2004)..516 | A Cost Benefit Analysis of Options to Reduce the Risk of fire and Rescue in Areas of New build HomesChapter 5: Cost Benefit Analysis Results .. Comparative Life Cycle Cost Estimates .. Economic, Social and Environmental Impacts .. Present Value of Costs and Benefits .. Non-Monetised Costs and Assessment of Value for Money.

5 Effects on Housing Supply and Demand ..63 Chapter 6: Sensitivity and Scenario Analysis .. Identification of Critical Variables .. Scenario Analysis .. Determination of Switching Values .. Identifying Other Key Risks ..72 Chapter 7: Summary of Findings and Conclusions .. Summary of Findings .. Generalisation to Other Areas of New build .. Suggestions for Further A. Literature Review ..78 Appendix B. fire and Rescue Services in England .. Domestic Demands on the UK fire and Rescue fire and Rescue in the Thames Gateway .. The Use of Domestic Sprinkler Systems.

6 99 Appendix C. Major Thames Gateway Housing D. Summer 2008 Workshop E. References and Data F. Tables ..107 Executive summary |7 Executive summaryPurpose of this studyThe Department for Communities and Local Government (CLG) commissioned NERAE conomic Consulting (NERA) to carry out a cost Benefit Analysis of options for addressingthe fire and community safety needs of areas of new build housing, with special referenceto the Thames Gateway. Of particular interest is the issue of installing sprinklers in domesticproperties, and whether or not the present costs of installing and maintaining sprinklersystems might be justified by the risk reduction that they would research does not imply any reconsideration of general Government policy on theinstallation of sprinklers in domestic properties.

7 It does however provide evidence to helpdecision making about whether any special characteristics of the Thames Gatewaydevelopments might justify serious consideration by the planning authorities ofrequirements for sprinklers beyond those of current Thames GatewayThe Thames Gateway is a 100,000 hectare region that falls within 18 different LocalAuthorities in Greater London, south Essex and north 2007 and 2008, CLG published housing and infrastructure plans for the region,including a target of 160,000 new homes between 2001 and 2016. The housing targetsinclude a range of different housing types, and the plans also include targets for theproportions of new housing that should be in the social housing increase in demand for fire and rescue services (FRS)

8 In the Thames Gateway fromthese developments will depend on a number of factors, including the socioeconomiccharacteristics of the population and the fire risks associated with the new Benefit modelling approachNERA was asked by CLG to perform a cost Benefit Analysis of four options currently beingconsidered to address the fire and community safety needs in areas of new build . One ofthese is do nothing , defined as maintaining the existing FRS provision in the region. Thiswould imply some (modest) increase over time in travel times to emergencies. This optionwe use as the baseline for assessing the other three options: Option I: installation of British Standard sprinklers in all new dwellings, withoutadditional FRS resources; Option II: installation of British Standard sprinklers in all new dwellings which are partof the social housing sector, without additional FRS resources.

9 And Option III: additional FRS resources in the areas of new dwellings, without sprinklersbeing | A Cost Benefit Analysis of Options to Reduce the Risk of fire and Rescue in Areas of New build HomesWe have developed an original spreadsheet-based model to estimate the benefits andcosts over the life cycle of these three Options, relative to the do nothing baseline. Wehave based many of the relationships, data (such as the response times to FRS incidents)and parameter values on CLG s fire Service Emergency Cover (FSEC) toolkit and anabridged version (the National Model ).

10 To assess the benefits, we look at the impacts of each Option on fatalities, injuries,property loss and CO2emissions from dwelling fires, Other Building fires and road trafficcollisions. The costs of sprinklers are taken from previous studies and quotes fromvendors. We have estimated the cost of providing additional FRS resources fromoperational cost data for fire and Rescue Authorities in the results and conclusionsWe discuss the net social benefits of each policy option relative to the do nothing baseline. We also compare the sprinkler Options I and II with Option III (additional FRSresources).