business case in the uk govt
TRANSCRIPT
Business Case in HM Government
21 May 2016
Riadenie◦ HM Treasury◦ Cabinet Office◦ Departments
Kontrola◦ Parliament -> Public Accounts Committee◦ National Audit Office
Annual Accounts Audit Ad-Hoc Value for Money Audits
Hlavné inštitúcie pri riadení verejných financií
“All expenditure requires approval by Treasury unless Treasury has delegated
this authority to the department. Typically delegated limits will be set in
line with an assessment of risk…”
The Green Book - the “bible” of appraisal and evaluation in the UK
No.1 myth about business case
Why do a business case? The 5 case model…
•That the intervention is supported by a compelling case for change that provides holistic fit with other parts of the organisation and public sector
Strategic Case
•That the intervention represent best public valueEconomic Case•That the proposed spend is affordableFinancial Case
•That the proposed Deal is attractive to the market place, can be procured and is commercially viable
Commercial Case
•That what is required from all parties is achievableManagement Case
Business case in everyday lifeStrategic Economic
Financial
Commercial
Management
Strategic Context◦ Organisational Overview◦ Current Business Strategies
The Case for Change◦ Objectives◦ Existing Arrangements◦ Business Needs – current and future◦ Potential Scope◦ Benefits and Risks◦ Constraints and Dependencies
Strategic Case
Critical Success Factors Long listed Options Short Listed Options
◦ including do minimum ◦ three or four is the recommended number
Status quo; do nothing option Economic Appraisals of Costs and Benefits Optimism Bias adjustment Risk Assessment The Preferred Option
Economic Case
Procurement Strategy Service Requirements Charging Mechanism Risk Transfer Key Contractual Arrangements Personnel (TUPE) Implications Accountancy Treatment
Commercial Case
Public Capital and Revenue Requirements Impact on Balance Sheet Impact on Income and Expenditure Account Overall Funding and Affordability
Financial Case
Programme and Project Management Methodology (PPM) and Structure
Programme and Project Management Plans Use of Specialist Advisers Change and Contract Management Arrangements Benefits Realisation Risk Management Monitoring during implementation (proportionate) Post Implementation Evaluation Arrangements Contingency Arrangements
Management Case
“It is important to note that “five case model” is a framework for “thinking” and that the supporting methodology is flexible and can be applied at both strategic (macro) and tactical (micro) levels.”
Hacky Sack again…
„Firm boundaries on the outside, flexible inside“
Business Case types and stages
Minor spending
Major spending
Major Policy
Strategic Outline Programme BC
Strategic Outline Case (SOC)
Outline Business Case (OBC)
Final Business Case (FBC)
Business Justification Case (BJC)
Completing the 5 Cases within the BC preparation process
SOC60%
40%
20%
30%
10%
OBC80%
70%
60%
60%
50%
FBC100%
100%
100%
100%
100%
StrategicEconomicCommercialFinancialManagement
• Case for change & Objectives
• Scope• Preferred way forward• Longlist Options &
SWOT• Short list (incl. “Do
Nothing”)• Risk identification• Indicative CBA
• Benefits appraisal (cash releasing, financial, quantifiable, qualitative)
• Economic appraisal of shortlisted options
• Risk assessment• Identifying the preferred
option• Demonstrate affordability• Procurement plan, draft OJEU
& criteria• Risk assignment• Plan delivery (strategies,
plans)
• Update OBC based on procurement
• Document contractual arrangements
• Finalise delivery • Plan evaluation
Chose a policy initiative and prepare the Strategic Outline Case
Time: 45’
Tip: don’t worry too much about the detail. The goal is to learn the BC structure, not to get it all right.
Assignment
Strategic Case◦ Strategic fit◦ Objectives◦ Existing arrangements◦ Business need◦ Business Scope for the required
business needs (min / medium / max)◦ Benefits (financial, non-financial
quantitative, qualitative, outcomes)◦ Risks
Economic Case◦ CSFs◦ Long list options (scoping, delivery,
finance)◦ Preferred way forward◦ Short list◦ Indicative economic costs
Commercial Case◦ Procurement Strategy◦ Risk transfer◦ Contract length
Financial Case◦ Affordability
Management Case◦ Programme fit◦ Methodologies
Recommendation
Template for SOC structure
