Valuing green space

With funding for parks facing huge pressures, managers can help their case by showing a return on investment, says Gavin McEwan.

Parks: managers need hard data to back up their claims for scarce resources. Image: HW
Parks: managers need hard data to back up their claims for scarce resources. Image: HW

Parks and green spaces don't seem, on the face of it, like easy things on which to put an economic value. But the past year has seen a flurry of studies aiming to do just that. Is this an approach that parks managers ought now to adopt more widely?

Many in the field think that, with the strain on public finances only likely to grow, such an approach will become essential in making the case for investment in parks.

"Facts and figures will be vital in defending budgets. It's no good going into battle armed with anecdotes," says Oldham parks manager Steve Smith. "We can expect council spending cuts of 10 to 15 per cent. Elected members remain supportive of green space but the financial people are more likely to view parks as non-statutory expenditure that can be cut back to core services."

Parks consultant Sid Sullivan agrees that managers need hard data to back up their claims for scarce resources. "Politicians and their support staff are more numerate these days and more likely to understand research methodology," he says.

"Even local councillors are used to seeing well-researched information and we have to match that. If you're proposing to put £10,000 into parks, how do you show value? What is the optimum investment? If you can show that, it's then up the sceptics to say where you are wrong."

But he says of the studies produced to date: "The methodology is not always as rigorous as it needs to be and the findings from one area are not necessarily transferable to another — each local economy is slightly different."

Sullivan's own practice draws on a wide range of data sources, from estate agents to social services departments, which provides both quantitative and qualitative justifications for green space.

"Groups like local environmental health bodies have fascinating data that they don't share with anyone," he says. "We have found arguments about value that we hadn't considered before. Not just in Britain — the psychology department at Harvard University has some fascinating results."

One estimate has put the UK's mental health care bill at £77bn a year. Mental health charity Mind has promoted "ecotherapy" — treating mental and emotional disorders with leisure and exercise in public green spaces — as an effective way to cut this bill. But Mind's report on the subject points out: "There is a particular gap in the evidence for the economic benefits of green exercise."

However, studies of the economic impact of individual green spaces are becoming more common. One published by the Mersey Forest at the end of last year found annual gross benefits of £5.5m, but as much of this value was displaced from elsewhere, the net figure for benefits from the forest project was closer to £2m a year.

The regeneration body's director Paul Nolan is confident the figures stand up. "We can reassure funders about the outputs that we are delivering," he says. "The economists we used were very hard-nosed. Everything had to be rigorous, with no double-counting. Even then, were surprised to see a gearing of 10 to one."

He agrees that much of the necessary data is already out there. "None of the report was primary research - instead we trawled the literature for documented benefits."

The key indicator is people — how many use as well as work in the forest, he says. "We used 'willingness to pay' to put a value on this. Here the surveying has already been done and peer-reviewed, though we will continue to refine and update the values, using the best methods available."

He adds that findings from other countries bear out his team's results, saying: "We have been pleasantly reassured by work on parks in New York and elsewhere, which has shown similar results."

The north west of England has been particularly active in addressing questions on green infrastructure, he says. "There's a cohort of people here who all think very similarly on this."

Among these is Natural Economy Northwest (NENW), a partnership led by Natural England, the Northwest Regional Development Agency and the landfill tax-funded SITA Trust. This produced a report, The Economic Value of Green Infrastructure in October 2008, which estimated the north west's green infrastructure generated £2.6bn in "gross value added".

According to NENW programme director Dr Will Williams: "Green spaces also provide what are called 'ecosystem services' — they support the quality of air, soil and wildlife, so should be treated like any other infrastructure rather than tacked on afterwards. As the Stern report [on climate change] pointed out, there are economic costs down the road if you don't get it right now."

For example, the floods of summer 2007 are estimated by the Environment Agency to have cost the country £3.2bn. "We should be able to think ahead and manage water catchments, so avoiding such problems," says Williams.

He points to the developer partnership for the Thames Gateway, launched by Natural England in November, as a good example of how green infrastructure can be built in at the outset of developments.

Housing developer Countryside Properties is a member of the partnership. According to director for sustainability Andrew Day: "We add value through the incorporation of green infrastructure into our schemes. We do this because high-quality public spaces and parks create economic, social and environmental value."

But Williams is keen not to oversell the economically reductive approach. "Green spaces can give you economic benefits but a lot of other things that are also meaning-ful as well, like quality of place, in which we all have an interest. This can be hard to quantify, though you can look at things like property values, commercial rents and occupancy rates.

"You have to put it in language that funders will understand. But if we can show 60 per cent of benefits in terms of their contribution to the economy, that lets you capture other benefits too."

Greenspace Scotland is another organisation that has recently undertaken work to evaluate benefits of green space in economic terms (HW, 30 October 2009). In its report on Greenlink, a cycleway south west of Glasgow, Greenspace Scotland used the social return on investment (SROI) framework, which seeks to measure the benefit to all stakeholders in a green space.

According to projects manager Ea O'Neill: "You put a value for all stakeholders on the changes that you bring about. When you're drawing up plans for, say, an urban nature site, where you are duty-bound to involve stakeholders anyway, then SROI fits in well. It's a conservative approach — you don't claim too much and the reports are very transparent."

But she too sounds a note of caution. "It can be hard to look at everything that goes on in a major space. It may be better in terms of time and resources to focus on one aspect and do your analysis on that. These things can grow arms and legs."

 

WHAT CAN BE MEASURED AND HOW?

Effect on homes and business

The Commission for Architecture & the Built Environment's 2005 report Does Money Grow on Trees? found that properties beside parks command a 5-7 per cent price premium over similar ones elsewhere - in some situations the green space premium was as high as 34 per cent.

Businesses also stand to benefit from more congenial workplaces and associated places to live, reflected in higher rents, occupancy rates and, arguably, increased productivity.

Health and well-being

Many common ailments are brought on by lifestyle and green spaces can do much to reduce their impact. According to Natural England, people who live within 500m of a quality green space are 24 per cent more active. It also says increasing exercise in just one per cent of the population would save nearly £1.5bn in health care.

Recreation and tourism

Some studies have used the "preparedness to pay" test to gauge how much users would spend to use green spaces were they not available free. But there are measurable spin-off benefits to local businesses too, even in city centres.

Climate change adaptation and mitigation

Planners are having to factor in ways of coping with an increasingly variable climate, the costs of which are becoming ever more apparent.

Meanwhile, trees are significant sinks of atmospheric carbon, which is increasingly monetised.

Energy savings

The role of green spaces in alleviating the "urban heat island effect" is becoming more widely appreciated.

One measure which this impacts on is the use of air conditioning in homes and offices.

Products from the land

Schemes such as biomass microgeneration will increasingly provide markets for green space by-products, alongside the more traditional agricultural and forestry products.

Biodiversity

So far this remains a difficult good to put a price on, but international efforts are under way to do so, led by such bodies as German-based think tank the Economics of Ecosystems and Biodiversity.


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