The National Audit Office published its lessons learned report earlier this month on governance and decision making on mega projects. It was thought provoking in terms of strategic misalignment of projects and the need to strengthen business case approval processes in a way that improves decision making rather than slows projects down, but also avoids incurring significant abortive costs when projects are cancelled.

Misalignment of strategic and economic goals was a key theme in the Major Projects Association Perspectives Report of September 2024 on lessons drawn from the cancellation of HS2 Phase 2 in 2023. There was a disconnect between the strategic case (goals to enhance rail network capacity, stimulate economic growth through connectivity and meet government priorities for reduced carbon emissions) and the economic case where the key benefits identified were savings in journey times, particularly for business travellers, and frequency of service.

Wider benefits such as impacts on society, the economy and environment tend to be over longer periods, hence the need to recognise benefits over a longer timeframe and to better align each of the five cases, and to balance the economic appraisal horizon with the timings for the strategic long-term vision.

The October 2024 National Infrastructure Commission’s report “Cost drivers in major infrastructure projects in the UK” highlighted lack of a clear strategic direction as a problem, with layers of assurance that do not ensure alignment to strategic objectives. Differing opinions as to why HS2 was important strategically was a key factor in the cancellation of Phase 2. Assurance should add value by asking informed questions to help guide a project towards its objectives.

Whilst recognising the variety of reasons for cancellation of projects in recent years, not least inflation leading to significant pressure on budgets or project descoping and the impact of COVID-19, there is clear evidence that following central guidance such as the HMT Green Book and guides to developing Project and Programme Business Cases helps to identify problems systematically and gives more opportunities to take mitigating actions.

Better Business Cases™ training can offer the techniques to support project deliverability, realisation of outcomes, planned benefits and control of costs and is applicable for both small value and mega-projects. It provides a clear process for assessing and developing business cases.

Key questions to ask:

• Is there a clear, strategic rationale supported by stakeholders for the initiative i.e. a shared understanding of purpose?
• Do the spending objectives for the project focus on the rationale and drivers for intervention (such as economy, efficiency, effectiveness) and the key outcomes and benefits we are seeking to achieve in support of the organisation’s business strategy?
• Has the Better Business Cases™ guidance approach to long-listing and shortlisting of options been followed? The key here is to avoid retrofitting. Benefits analysis is not about justifying a pre-selected solution.
• Have benefits been consistently categorised and classified to demonstrate and evaluate the contribution made by the project?
• Does the business case value and appraise the significant benefits and do those benefits align with the strategy? So, it’s about looking for that clear line of sight from the wider strategic objectives to the spending or investment objectives for the proposal and case for change (Strategic Case) to benefits forecast (Economic Case) and ensuring that benefits in the economic model are clearly linked with the investment objective to which they relate.
• Does the business case assurance process followed ensure that resources are allocated to projects which are genuinely affordable, value for money and feasible? Is the project proposed aligned to the strategic objectives?

How we can help

Adopting a robust approach to investment appraisal and business case development and assurance can be challenging. Our Business Case Training team provides APMG Better Business Cases™ training to the public and private sector and supporting Bite Size training including economic modelling and benefits management and realisation.

Whether you need Better Business Cases™ training covering the Five Case Model (a systematic framework for developing and presenting the business case over time) or Bite Size training on related elements of the business case, we’re here to support you every step of the way.

Reach out to us today and we will get in touch to see how we can help.

For more information, you can contact us on:
E: mlcsu.nhsenglandbbc@nhs.net
W: Better Business Cases training – NHS Midlands and Lancashire

A blog by Sue Stockley, Head of Business Case Training at NHS Midlands and Lancashire.