The Government is committed to improving the quality and consistency of business cases prepared by capital-intensive Crown agencies when these institutions seek funding or a decision from the Crown. As a result, the Tertiary Education Commission (TEC) and the National Infrastructure Unit at The Treasury have published the following guidance and templates for tertiary education institutions (TEIs).
Further detailed information is available on the The Treasury website.
Any investment or borrowing proposal that requires approval from TEC, Secretary for Education and/or Ministers (including Cabinet) must be accompanied by a business case developed using the process and templates outlined in the following sub-pages:
This approach provides business case writers with clear processes and criteria to follow when engaging with the Crown on investment or borrowing proposals.
We strongly encourage all tertiary education institutions to adopt and integrate the following guidelines and templates into their internal management and council processes. However their use is not mandatory for most internally funded projects.
The five case model
The Government has adopted a standardised business case model known as Better Business Cases for Capital Proposals. The five case model is designed to provide explicit assurance to ministers, stakeholders and business case assessors that the proposed investment:
- is supported by a robust case for change, the ‘strategic case’
- maximises value for money, the ‘economic case’
- is commercially viable, the ‘commercial case’
- is financially affordable, the ‘financial case’
- is achievable, the ‘management case’.
The approach helps ensure each of the key aspects of a robust investment proposal is explicitly and systematically addressed as part of the business case development process.
Single-stage and two-stage business cases
All business cases follow the five case model but are broadly distinguished as follows:
The number of stages primarily relates to the number of points during the development of a business case at which decision-makers are given the opportunity to decide whether business case writers should undertake work to develop the proposal further. Whether a business case is a single-stage or two-stage also depends on whether the proposal is likely to involve a programme of work or is high/low value or high/low risk as summarised in the table below.
|Project and Programme Business Case Stages|
|Small scale |
and low risk projects
and High risk projects
|Single-stage ||Two-stage ||Varies|
Deciding whether a proposal requires a programme, single-stage or two-stage business case is normally determined following submission of a scoping document. The Tertiary Education Commission and the business case owner then use this scoping document to reach agreement on key decisions such as:
- the scale and risk of the proposal, using the Risk Profile Assessment tool and the scalability matrix
- whether the solution to the problem being addressed by the business case is likely to be a discrete project, or would be better addressed through a larger programme of work
- whether further work is required to clarify the problem/opportunity and the possible options, benefits, strategic responses and solutions. Most programme business cases require a Strategic Assessment and some project business cases, particularly projects that require a two-stage business case, require an Investment Logic Mapping (PDF, 37 Kb) exercise
- the level and depth of analysis required in various stages of the development of the business case
- the level and depth of independent quality assurance required in various stages of the development of the business case
- level of effort and cost for development and assurance
- the timing and nature of engagement and decisions required including how these fit with other processes required by the TEI (that is, council approval) or by TEC (that is, budget processes).
During the scoping phase we and the tertiary education institute will agree on whether any and what type of concurrent third-party (independent) quality assurance is required to support the development of a business case.
The purpose of quality assurance is twofold:
- business case assessors obtain assurance that an appropriate level of rigour has been applied to the analysis of key aspects of the business case. It also provides assessors with a degree of assurance the business case is of an acceptable quality prior to review
- business case owners and writers obtain independent evidence to support the level and depth of analysis they have applied to the development of a business case.
The main purpose of independent quality assurance is to save business case assessors, business case owners and business case writers time and effort in their respective roles.
We require independent quality assurance for all programme and two-stage business cases (and some large single-stage business cases). This can range from a Gateway Review for all high-risk projects to an independent review by a private third party for programmes or lower-risk and lower-value proposals.
We and the tertiary education institute will agree the level and scope of any independent quality assurance during the early scoping phases of the development of an investment proposal.
Business case review and assessment
When considering a preferred solution or investment proposal, we need to be satisfied the evidence provided demonstrates to a greater or lesser degree that the investment proposal demonstrates, contributes, supports or identifies these factors:
- Strategic alignment - identifies and contributes to the Government’s stated outcomes for tertiary education as set out in the Tertiary Education Strategy, and other strategies relevant to the TEI(s) and/or the business case.
- Value for money - demonstrates value-for-money for the Crown, measured against a range of possible options, and aligns to the investment objectives agreed between TEC and the TEI(s).
- Tertiary network - contributes to a balanced network of provision (i.e. geographically and/or academically), with more focus on national and regional solutions and less on individual local institution specific approaches.
- Stakeholders - supported by key stakeholders (including, for example/as appropriate, staff, students, other providers, industry and advisory organisations, business groups, and central and local government).
- Affordability - contributes to the current and future financial viability and sustainability of the TEI(s) (and other TEI's, if applicable) and is it affordable and justified as part of long-term capital asset management plan(s).
- Risk - identifies and appropriately manages or mitigates key areas of risk and uncertainty that could threaten the success of the proposal, its implementation including any regional/national risks and/or risks to the Crown.
The specific assessment criteria that we will use in each of the five cases of a business case alongside the assessment criteria listed above is available in Step 3: Business case assessment.
Overview of business case review and assessment - projects
The flowchart below illustrates indicative, high-level business case development, review and decision-making processes for two-stage and single-stage business cases. This flowchart does not illustrate concurrent third party quality assurance activities which are likely to be required alongside most business cases (particularly projects that require a two-stage business case). Actual processes and timelines are normally agreed on a case-by-case basis.
Single-stage and two-stage business cases: Assessment process and timelines
Click image for larger view
Overview of business case review and assessment - programmes
The flowchart below illustrates indicative, high-level business case development, review and decision-making processes for programme business cases. This flowchart does not illustrate concurrent third party quality assurance activities which are required alongside all programme business cases. Actual processes and timelines are normally agreed on a case-by-case basis.
Programme business cases: Assessment process and timelines
Click image for larger view
6 July 2015
6 July 2015