Lessons on Business Case Development

How do we ensure the project receives public funding? How can we make a success of its delivery? Anyone seeking public funding must be mulling over similar questions.

While no panacea, developing a robust business case in line with HM Treasury’s requirements is key. The rigorous process of Strategic Outline Case, Outline Business Case and Full Business Case sets the way for delivering value for public money. A similar framework has the advantage of making the project owner think about a range of issues (strategic, economic, financial, commercial, and managerial). In turn, it makes a project more likely to deliver and increase the wellbeing of the communities it benefits.

Over the past few years, BiGGAR Economics has helped local governments across the UK progress projects for funding sources such as the Town Deals, the Levelling Up Fund and the City Region Deals. During this period, we have acquired expertise both in developing business cases and in providing quality assurance. It is now time to take stock and reflect on this experience. Here are five lessons on how to develop a successful business case.

Ensure the project is well developed: lack of project development can be a considerable challenge in drafting a Treasury-compliant business case. To avoid this: ensure key stakeholders are involved from the outset; consider the project’s costs and how it will be funded; decide on the project’s siting and the services it will deliver. A well-thought-out project is more likely to meet any submission deadlines and fully benefit from the experience of any external consultants appointed to help with the project.

Understand the why: show how the project addresses an existing or future need. This is important when developing the strategic case for a public sector intervention and when thinking about the benefits the project could deliver. It requires considering the wider context within which the project sits. A focus on the ‘why’ will help you show how the current situation will change following the intervention.

The project is yours. The consultant is your ‘critical friend’: if asking for external professional advice and insights, still retain ownership of the project. It may be tempting, faced by competing pressures, to leave the process fully in the hands of external consultants. However, our experience suggests a collegiate approach is key to delivering high-quality projects. Local government has a better understanding of local needs and contexts, while consultants have the specialist skills required to deliver a compliant business case. Better outputs are delivered when these two skillsets meet.

Focus on materiality: put the stress on what matters. This is particularly important when setting out the economic case for a project. So, focus on the wider benefits an intervention is going to deliver and give less weight to any impacts associated with its construction and its day-to-day running. For instance, if delivering a skills programme, put emphasis on the benefits to participants (higher salaries, lower unemployment), rather than those associated with running the programme.

Quality assurance is key: be pro-active, rather than reactive. The process has already built in a stage for Government review, which will generate comments and lead to a series of iterations of your business case. There are merits in starting this iterative process earlier by involving an external consultant to provide quality assurance over the draft business case. This will ensure the coverage of the business case is appropriate and reduce the amount of work down the line.

These five lessons will help local governments seek the right professional expertise and ensure the most is made from the collaboration with consultants. Developing a strong business case is the best way to ensure an intervention is ready to benefit from funding and deliver meaningful impact.