Social and economic statement of impacts: guidance for applicants

Annex D: Template for applicants

This annex sets out a proposed template that applicants can follow when producing a SESI, including suggested headings, structure and information to include. Examples using hypothetical project scenarios have been provided where appropriate to demonstrate the suggested layout of information.

1. Project Overview

Describe the proposed project, including location(s), scale, key components and anticipated project phases (construction, operation and maintenance and decommissioning where applicable). This section should provide sufficient context to understand how economic and social impacts may arise.

2. Study Area(s)

Describe the geographic study area(s) used for the SESI. Explain how they were defined and why they are appropriate for assessing impacts. Ports should be identified, where relevant, or an explanation of the method chosen if ports are unknown (shortlisting or scenarios). All effects should be assessed at the smallest study area possible.

3. Stakeholder Mapping and Consultation

At the pre-application phase, and throughout, identify communities, sectors and stakeholder groups that may be affected by the project. Include justification for inclusion or exclusion of certain groups, detail the planned and/or completed consultation and explain how it has or will inform the assessment. This demonstrates due consideration for all relevant stakeholders for the duration of the project.

4. Impact pathways/ theory of change models

Explain how the project is expected to generate economic and social impacts. This may be presented as a theory of change model or structured narrative. It should justify the impacts included in the SESI and any that have been scoped out. Figure 2 shows and example of how this can presented as a flowchart.

5. Approach and method

Describe the methods used to assess impacts, including data sources, analytical approaches and assumptions. Explain where expert judgement has been applied and uncertainty and appraisal concepts (e.g. displacement, leakage) have been considered.

6. Baseline and counterfactual

Describe current economic and social conditions for relevant themes and how these would be expected to evolve in the absence of the project. The assumptions underpinning the counterfactual should be clearly explained.

7. Economic and social appraisal

An assessment of the anticipated impacts relative to the counterfactual for each theme across each phase of the project. For each theme, applicants should use the baseline, counterfactual and method set out earlier to explain the direction, scale, duration and distribution of impacts. An example of how this can be structured has been listed below.

Example 1 - Floating Offshore Wind Farm Project in HighLand Town, Scotland 2040 (Planned lifespan of project from construction to decommissioning is 55 years).

1. Baseline condition of study area and wider Scotland compiled using marine economic statistics, Seafish data, public health data, labour market data at a regional level, Scottish index of multiple deprivation and 2021 census data for population projections.

2. Counterfactual generated using forecasts from Bank of England Inflation report and economic forecasting methods based on past trends. This shows how demographics, economy, labour market and other social factors of HighLand Scotland is expected to develop over time period (55 years).

3. Assessment carried out looking at the impacts over each project stage, and, using the Green Book, discounting rates based on social time preference to present benefit and costs in present value terms - 3.5% up to year 30, and 3.0% for the remaining 25 years. This was applied to GVA and uplifts for optimism bias included for job numbers.

4. Net Social benefits and costs as a result of the project are presented. This included a qualitative assessment where impacts could not be monetised but were considered. In this case, this included the fact that deprivation in HighLand was very high and engagement showed local dislike for migratory workers as opposed to recruitment from the local labour marker. Mitigation was proposed.

7.1 Economic themes

7.1.1 Wider economic impacts

Assess changes in economic activity arising from the project beyond its immediate operations. Applicants should apply the baseline counterfactual and method previously described to explain how wider economic outcomes change as a result of the project ensuring to explain and assumptions, limitations and uncertainty. This should also include the anticipated wider impacts on commercial fishing as they pertain to the metric assessed.

Metrics that should be included include:

• GVA
• Income

7.1.2 Labour market impacts

Assess how employment outcomes are expected to change as a result of the project. This should focus on changes relative to the counterfactual, considering the scale, duration and characteristics of employment, implications for local labour supply and any displacement or leakage.

Metrics that should be considered include:

• number of jobs created and supported (by phase)
• job duration
• occupational profiles
• skills requirements
• local employment rates
• commuting patterns
• earnings profiles

7.2 Social themes

7.2.1 Demographics

Assess how the project may influence population size, structure or composition in affected areas. Applicants should apply the established baseline and counterfactual to explain demographic change attributable to the project ensuring to explain any assumptions and uncertainty. This should also include the anticipated wider, downstream impacts on commercial fishing as they pertain to the metric assessed.

Metrics that should be considered include:

• age
• demographic structure
• gender distribution
• current migration patterns
• household composition
• income profiles
• other demographic metrics of interest

7.2.2 Access to public services

Assess how the project may lead to changes in access to, or demand for public services. Applicants should apply the baseline and counterfactual to explain how project related change affects services, considering both potential pressures and potential benefits. This should also include the anticipated wider, downstream impacts on commercial fishing as they pertain to the theme.

7.2.3 Community resilience and deprivation (including housing)

Assess how project impacts interact with existing patterns of deprivation and community resilience. Housing impacts should be considered, reflecting their relationship with demographic change, labour markets and vulnerability. Applicants should explain how impacts affect diverse groups or areas relative to the counterfactual. This should also include the anticipated wider impacts on commercial fishing as they pertain to the metric assessed.

Metrics that should be considered include:

• SIMD
• GP lists
• school rolls
• waiting times
• locally specific indicators of service pressure
• other indicators of community resilience that are of relevance
• housing tenure mix
• affordability ratios
• house prices and rent costs
• housing supply
• temporary accommodation supply
• other indicators of housing demand/housing impacts

7.2.4 Tourism and recreation

Assess how the project may affect recreational or community use of marine and coastal spaces. Applicants should describe changes relative to the counterfactual, drawing on local evidence or engagement where appropriate. This should also include the anticipated wider, downstream impacts on commercial fishing as they pertain to the metric assessed.

Metrics that should be considered include:

• participation rates
• visitor numbers
• locally determined variables of interest

7.3 Additional themes

Assess any additional economic or social impacts that are material to the project, where sector-specific activities are likely to experience change with a high-level of economic and social consequence or where stakeholder engagement identifies significant additional economic or social concerns, but not covered by the core themes. This should include the anticipated wider, downstream impacts on commercial fishing. Applicants should describe the inclusion of any additional themes and apply the same structure as the other themes.

8. Additional analytical considerations

Additional considerations relevant to the assessment that affect the interpretation of impacts across themes.

8.1 Uncertainty and bias

Summarise the main sources of uncertainty across the assessment and explain how these may affect the findings.

Identify the relevant biases considered, outline the steps taken (if any) to mitigate this risk in the application (optimism and confirmation bias at a minimum) and outline the appropriate uplift/reduction that has been applied at each stage of the project. Where there is compelling evidence to suggest that risks have been mitigated, this should be included.

8.2 Cumulative impacts

Consider whether impacts may interact with other projects or activities and explain the implications for the different themes where cumulative effects are anticipated. An example of how this information can be presented is set out below.

Example 2 - Alongside a Harbour and Marina upgrade project, government-funded S.T.E.M training in the region is assessed as a cumulative effect. The project increases demand for technical skills, while the training programmes increase local supply, potentially improving local labour uptake and reducing leakage. The assessment also considers wider qualitative impacts, such as increased confidence and optimism among young people. The application assess how these combined effects influence the findings across the relevant economic and social themes.

1. Harbour and Marina upgrade in SeaBed Town, Scotland, increasing space for sport and recreational activity. Project also includes construction, operation and maintenance of a new SeaBed Learning Centre, which will be onshore.

2. Baseline condition and counterfactual were generated for the entire proposed study area in SeaBed, Scotland. The impacts resulting from the onshore element of the project are not included in this assessment and impacts are only based on the marine aspect of the project i.e. the harbour and mariner upgrade and not the coastal learning centre.

3. In addition, there is government funding to support S.T.E.M training for school leavers in the region and as a result, there are significant unquantifiable benefits due to the alignment with national policy. These are articulated and described (confidence of young people, optimism about future of the area, skills developed locally).

8.3 Interactions and distributional effects

Explain interactions between impacts across themes and highlight how benefits and costs are distributed across different groups, communities or geographic areas. An example of this information can be presented as set out below.

Example 3 - The decommissioning of an offshore wind farm is expected to result in uneven impacts across different groups and locations. While workers employed in the offshore wind sector are often highly skilled and may secure employment elsewhere, these opportunities may not be within the local area, resulting in out-migration or reduced local spending. At the national level, employment impacts are expected to be limited. However, at the local level, the loss of a stable employer may affect community resilience, particularly in areas with a concentrated labour market and limited alternative employment opportunities. The assessment reflects these distributional differences, identifying that overall impacts may be positive or neutral for Scotland but local communities may experience negative economic and social effects.

1. Decommissioning of an Offshore Wind Farm off the coast of NorthSea Town, Scotland. Remote small island community of less than 6,000 people. Decommissioning work is specialised and requires skills available in the local area, albeit perhaps slightly lapsed due to limited recent use. Collapse of a key employer in the region led to the eventual decommissioning project and concerns were raised during engagement with the community.

2. Offshore wind was anticipated as a significant boost to the region in terms of employment and economic prosperity for the town, however due to collapses in a key employer and other investment decisions, the eventual wind farm company submitted an application for decommissioning. The educational attainment of the area is presented using census data and the skill/working level of the area is presented using education data and labour market data for occupation levels (manager, employee, etc.) Data for proportion of inhabitants of NorthSea, Scotland with an engineering degree is also collated. This also includes age profile of the region and Town compared to national average. High proportion of engineers in the region and specialist tradespeople compared to national average. Highly concentrated labour market in very few specialised sectors.

3. The assessment highlights that the project will increase jobs, however the net impact on FTEs following the decommissioning is negative. The assessment highlights migration of workforce and potential unemployment increases in the region through past trends leading to the decommissioning. Mitigation was suggested for select groups likely to be more impacted in the region as a result. Research into similar projects shows impact on mental health, wellbeing, crime and access to public services following significant upheaval to a well-established employer in remote rural areas such as NorthSea, Scotland.

4. Mitigation is provided alongside the impacts of the project for Scotland as a whole, which is a net social benefit. Local social cost implications are highlighted and presented alongside the national case.

9. Summary and conclusion

Provide a concise, focused summary of the SESI. Applicants should highlight the main economic and social impacts, net effects relative to the counterfactual, distribution of impacts and overall conclusions relevant to Scottish Ministers’ decision making.

10. Appendices

Any supporting material such as detailed data tables, methodological notes and engagement outputs.