The continued rise of the Business Case

The other sort of Business Case (see what I did there)

Anyone who has tried to do anything different in Local Government over the past few years has probably been asked the same question:

‘Have you completed a Business Case?’

Most councils will have their own template for the initiating staff member to complete. The enthusiastic employee will, in all likelihood, be asked to detail the cashable and non-cashable savings and analyse tangible and non-tangible benefits. They will be asked to look at the cost of implementing the project, identify how the funding will be accessed and possibly asked to complete some form of complex return on investment calculation.

I am a big supporter of the business case model. It forces managers to think seriously about the costs of what they propose to do and tries to force people to identify the benefits as well. It reminds managers and project proposers that the money they are spending is ‘real’ contributed by tax payers or borrowed prudentially with the requirement to repay interest against that.

It also provides a useful tool to compare different projects.

However, as we get more sophisticated with our business cases we also get more reliant on them to tell us everything we need to know about the decisions we choose to make.

A few years ago I was talking about a project I was running to a more senior colleague of mine from another local authority. I was bemoaning the fact that I was finding it difficult to identify the savings and benefits from my project in numerical terms although anecdotally I was certain there were real benefits from the project.

My colleague pointed out that the major problem with my obsession with business cases is that sometimes the things we want to do are not about RoI but about the choices we have to make about the services we provide.

He also played the old timer trick of ‘when I first started in local government’ decisions were made by the politicians and then it was just up to us to deliver them for the best value we could but that’s a different post altogether!

I disagreed with him at the time (I used to LOVE Business Cases) but I’m starting to come round to his way of thinking.

There is a big difference between procuring a payroll system or developing a new accommodation strategy and working out a new approach to children’s social care or putting together a new community engagement strategy.

With this in mind there needs to be a different approach to the two. The tendency to try and compare these differing types of projects with something like an RoI model is a mistake.

A lot of what local authorities do is not driven by profit or how much money we can make or save by doing something but by decisions (political or otherwise) about the right thing to do.

I am still a big supporter of using business cases appropriately but my fear is that the attempt to get local authority managers thinking seriously about value for money, return on investment, the cost of capital and the difference between cashable and non-cashable savings and between tangible and intangible benefits.

However, in this time of financial crisis and with local authorities struggling to make ends meet I worry that they are falling back on the Business Case, with its templates and certainties, as a crutch in uncertain times.

To do so would be a mistake.

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3 Comments on “The continued rise of the Business Case”

  1. Mark Stanley Says:

    I too am a fan of the business case. I think it is an excellent tool for making sure that organisations consider the net benefits before launching a big project. It doesn’t always produce the answers you want, and sometimes you have to fess up that your project requires a level of faith that it is “the right thing to do” rather than point to hard cash savings.

    This isn’t a bad thing. If it helps highlight that project A is a “right thing to do” project rather than a cost reduction project then it is clear to the board/committee what you are asking them to approve.

    It becomes a bad thing if the £££ side of the business case always trumps the “right thing to do”. That is down to the decision makers playing their role fully.

  2. […] We Love Local Government A blog looking sideways at life in local government « The continued rise of the Business Case […]

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