Why government needs Better Business Cases

12 Dec 14
Mark Williams

With increasing public interest in the way governments make decisions, it’s vital that business cases are robustly constructed. The Treasury is leading the way with a new training and accreditation programme.

There is growing interest in the way that governments around the world make decisions. This is partly due to austerity – the public are now more engaged in ensuring their services provide optimal value – but there’s also a broader trend. Tales of poor government procurement are becoming more widely known and we are now in a world where even the tabloid press references some reasonably ‘techie’ aspect of major project business cases.

So the time is right for sharpening up application of the principles underpinning the government’s business case model, as set out in the Green Book, and for more formal training and accreditation. It’s heartening that the Treasury has been developing and championing the Better Business Case (BBC) approach, and a BBC training and accreditation programme is now up and running and involves CIPFA as one of the training providers.

Business cases are all too often viewed as ‘tick box’ exercises carried out by a junior team member after the real decision has already been made. But they must be at the heart of decision making and senior stakeholders need to take time to work through the Five Cases supporting the Business Case Model in order to make the best value-for-money decision.

Let’s quickly recap what the Five Cases are:

  • Strategic = “Applicable” does it meet the policy, strategic and organisational needs?
  • Economic = “Appropriate” does it offer optimal public value, in the context of a long list and then short list of options?
  • Commercial = “Attractive” is it attractive to both the public and the private sector (on the assumption that a procurement competition will be required)?
  • Financial = “Affordable” can we afford it within the agreed funding envelope?
  • Management = “Achievable” can it be successfully delivered?

These Five Cases can be seen as five sides of a decision making pyramid and without senior stakeholders being able to answer all of these questions then that pyramid will collapse.

But once you have your business case, what do you do with it? In line with the transparency agenda, and mounting public interest mentioned above, high-profile business cases should be published. For me, if politicians are held accountable for the ‘policy’ context then it is reasonable for the interpretation of policy into programmes and projects to be subject to scrutiny too. I am hopeful that in a few years from now the Public Accounts Committee will ask whether senior responsible officers (SROs) and senior stakeholders hold the Better Business Case accreditation, just as they ask whether CFOs are professionally qualified accountants now.

We should also be mindful of the differences between straightforward business cases and complex ones and between business case work in the public sector versus the private sector. For me, there is a real opportunity to group straightforward decisions under a ‘programme’ context and then once the programme case is proven individual project level decisions can be made at pace. It is the complex business cases that need significant investment of time from the senior stakeholders.

Finally, it’s worth highlighting a few messages from the foreword to the Green Book Supplementary Guidance. Here the Treasury’s second permanent secretary says ‘that when this guidance is embedded in public sector organisations, more effective and efficient spending decisions and implementation plans are produced’. Further, ‘the approach when correctly understood and applied provides a more efficient planning and approvals process saving between 30% and 40% in time taken and costs of production of business cases’.

Spending a couple of days in training to then save 30% to 40% in the time taken and costs of production of a business cases must ‘tick the cost/benefit box’. Furthermore, there is an ‘intangible’ benefit associated with an SRO sitting the exam for the BBC accreditation alongside more junior staff. In my experience it is also possible to combine this training with a case study based on the specific programme or project work allowing for ‘workshops’ in constructing the decision-making ‘pyramid’ and building the evidence base.

The case for SROs and senior stakeholders to attend Better Business Case training at the start of their programme or project work is compelling.

Mark Williams is a member of CIPFA's Central Government panel


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