Making the Business Case

The research into the Housing Forum demonstration projects revealed that the clients involved linked their procurement objectives to the following policies and strategies:

• 90% to Best Value policies
• 86% to Business Planning
• 86% set out businesses cases for individual projects
• 72% to their Asset Management Strategies.

Making the Business Case for the project or programme will include:

• identification of the business needs linked to corporate values and value for money objectives set out in the Asset Management Plan
• objective and verifiable information on property conditions and customer needs
• demonstration of contribution towards the achievement of the Decent Homes Standard
• evaluation of the long term costs and benefits
• other objectives of, and success criteria for, the project or programme
• consultation with stakeholders and tenants/ residents
• establishment of a clear structure for the client team to carry the project forward
• setting up of a Gateway Approval System to review the project at key stages.

In practice the completion of a successful Business Case will depend on visible client leadership and strong management. The business case should determine from the earliest possible stage that the client can be reasonably certain the project is worth carrying out.

If a clear Business Case is not made and agreed at senior management level it is possible that scarce resources may not be used effectively or that customers' needs will not be fully met.

If a project does not meet defined business criteria then its purpose must be reconsidered. In simple terms there will not be any benefits to clients or customers if a project is unlikely to lead to long term value. There would not be much point, for example, in carrying out large scale refurbishment works in a block of flats that was scheduled for demolition in the foreseeable future. Another example might emerge from a Stock Options Appraisal process where there was no case for a Local Authority to retain long term ownership of a section of it stock. The council would not be able to make a Business Case for anything other than 'short to medium term' repairs and maintenance programmes.

The key benefit of carrying out a business case for each scheme or programme is to ensure that investment resources are not wasted on developing a scheme which does not meet defined needs or add any value to either residents, the wider community or to social housing landlords.

Barriers to Change can be overcome by

• Investing in the time needed to establish a new culture and develop new tools and systems for managing business appraisal and business case planning.
• If the necessary skills are not available in-house, seeking external and independent advice initially and building up the internal expertise over time.

Examples:

• Barnsley Metropolitan Borough Council (Link to Housing Stock Maintenance Strategic Partnering Arrangement- Project 1146) developed the business case for partnering by carrying out a Best Value review of its complete Housing Stock Maintenance Repair and Minor works programme and has developed an improvement plan designed to drive dramatic improvements in service provision.
• CityWest Homes, Westminster (Link to Implementation of Strategic Partnering, Major Works, Repairs and Planned Preventative Maintenance - Project 1188) needed to convert the procurement and delivery of all major works, responsive repair and planned preventative maintenance to Westminster City Council's housing stock from traditional local authority methods to long term arrangements based on Best Value and delivered through co operative working.