The first financing model explored by the team was based on the savings made through a surface water charge discount by installing Sustainable Drainage Systems (SuDS) and had looked a straightforward enough approach. Although the team found that the discount is able to deliver a return on investment, risk levels around securing this for a sufficient payback period has proved a major blocker for investors and necessitated a revised approach to be developed and adopted. Back in 2019, when I talked with the project lead about challenges in innovative projects, we had a rather theoretical but common understanding that there will be some stumbling blocks. Two years on: How did the task of developing innovative funding streams work out?
The innovative business models and financing mechanisms developed should go beyond business-as-usual funding options such as municipal budget and grants. A case for the first funding stream has been developed and successfully implemented in the schoolyard of Moorlands Junior School in Manchester. Greenspace including SuDS to mitigate flooding have been established and as a result students enjoy a much more pleasant area to play and learn in. The financing model is based on the calculation that the property owner will have savings in water charges (by removing or slowing the flow of water into the wastewater network), which can be used to offset the upfront investment in SuDS, over a number of years. However, while the model has run successfully for Moorlands Junior School, other public and private actors hesitate to take it up. What is the problem?