Projectbusiness CASE Template

ProjectBUSINESS CASE Template

Version 2.0

09December2016

Introduction

The purpose of this template is to ensure that all business cases submitted for consideration by CSG have been appropriately prepared and are consistent with the University’s priorities and plans. The information contained within the business case will be used to assist CSG in determining an appropriate recommendation to PRAC.

Major building projects

The business casetemplate is intended for major building projects, defined as projects over £1m (gross outturn cost). It should be completed following the conclusion of the feasibility study and the appointment of the Project Sponsor Group.

Pre-feasibility and minor building projects

Minor/intermediate projects or those with a value of up to £1m as well as requests for pre-feasibility funding are required to provide a reduced range of information and are therefore permitted to treatsections: H(i) Capital Masterplan Options Appraisal, (iii) Impact on existing space allocations andG (v) Benchmarks as not applicable.

Using this template

You are encouraged to contact colleagues in PRAS at the earliest opportunity for assistance with completing this template.Please be aware that if any of the information requirements are not met, CSG may send the business case back for further work thereby delaying the commencement of the project.

CSG_XX_XX

CONFIDENTIAL[1]

Planning and Resource Allocation Committee

CAPITAL STEERING GROUP

[Project Name: Approval sought]

A.Summary

A short paragraph (no more than 10 lines) summarising the entire business case.

B.Recommendation

Set out precisely what action is required of CSG, including the cost and proposed source of funds where appropriate (suggested wording is provided below).

CSG is asked to recommend that PRAC [and if applicable] Council approve the release of [£XX] in total funding with up to [£XX] from the University reserve to [enable the project to proceed to RIBA Stage 2].

C.Timing

Where approval is required by a certain date, this should be explained here, along with the impact of exceeding this date (suggested wording is provided below).

Approval is required by [enter date] to allow the project to [enter detail]. If approval is not granted by this date [enter detail].

D.Academic Case

This section should set out the underlying detail of the academic case in support of the recommendation.It should not exceed one side of A4. Where necessary, additional information and rationale should be included in one or more annexes. It should also explain:

The academic vision (How does the project relate to the Department’s core teaching and research activities? For projects seeking to deliver new research facilities, what is the importance of the research questions to be addressed, and their timeliness?)
The type(s) of space required i.e. highly serviced lab; office; teaching; air-conditioned; naturally ventilated etc. and how it will meet the specific needs or problems of the Department/Division.
The overall fit with the Division’s broader strategy; describe how the project will enable the Department and Division to achieve its strategic goals.
The Department’s performance in the REF and its success over the past 5 years in securing research grant awards
Whether the investment will facilitate the pursuit of any new initiatives e.g. delivery of new patient services, teaching initiatives etc. the anticipated income from which, should be specifically quantified in the financial sustainability table in part J
Opportunities for the recruitment and retention of key academic and research staff
Opportunities for attracting the brightest students

E.Public Sector Equality Duty

As a public body, the universityhas an active duty to consider the impact on equality in all decision making[2]. Please choose the most relevant of the following statements set out below:

(i).Negative Equality Impact

Either

It is considered unlikely that this item will have a negative equality impact by creating or contributing to a risk of discrimination, harassment, victimisation or other prohibited conduct.

This item could have [a] negative equality impact[s] by creating or contributing to a risk of [discrimination/harassment/victimisation/other prohibited conduct (select all that apply) because (describe the impact and identify the protected groups[s] affected)

This negative impact[s] [cannot be remedied or mitigated/can be remedied/mitigated by…]

(ii).Positive Equality Impact

Either

It is considered that this item will have no impact on equality.

[This item could have [a] positive impact[s] on equality by [eliminating unlawful discrimination, harassment or victimisation/advancing quality of opportunity between people who share protected characteristics and those who do not/fostering good relations between people who share a protected characteristic and those who do not (select all that apply)]

The positive impact[s] will be achieved by… (describe the steps to be taken and identify the protected group[s] affected).]

(iii).Evidence

The following evidence was considered:…/Groups consulted were…/No groups were consulted because…

F.Options Analysis

This section should set out the options you have considered to address the business problem oropportunitythis should include the ‘do nothing’ option as well as the option of refurbishing/re-using existing space. Alongside each option please identify:

The relative advantages and disadvantages
An estimate of the likely cost

Depending on the situation, the option analysis may simply be qualitative or more detailed. This section should also include a statement confirming what level of input has been obtained from the Asset & Space Management teaminto the options analysis.

G.Capital Costs

(i).Project Costs

Provide a breakdown of the estimated gross project costs (suggested wording is provided below). The Annex should be a draft PEA prepared by the Estates Services project manager.

The cost forecast for the [enter project name] is attached (Annex [X]). It indicates an overall project budget of [£XX].

(ii).Source of funds

The proposed sources of funding (including funds previously approved) for the project should be summarised e.g. University reserve, external grant, philanthropy etc. Includeadditional columns as necessary using the template provided below.
Funding allocations / Total (£’000k) / Sources of funding
University reserve (funding rate[3] 0%, 1.25%, 6%*) / [enter name of Department] Department reserves / [enter name of awarding body] External capital grant / Philanthropy / Pre-feasibility fund / Is it expected that there will be some non-exchequer funding[4]?
All previously approved funding (including pre-feasibility and Departmental funding) / Y/N*
Current funding request
TOTAL

*Delete as appropriate

(iii).Outturn movement

Please use the table below to set out the revised projected outturn costs for this project, or otherwise confirm that the projected outturn costs remain unchanged.
Capital Masterplan envelope / Projected outturn cost / Outturn movement (increase/decrease*)
[£XX] / [£XX] / [£XX]

*Delete as appropriate

(iv)External funding

Any relevant issues and/or conditions concerning the provision of external funding (if applicable) should be summarised. The summary should provide details of any conditions and implications for the target programme of any external funding e.g. under HEFCE RPIF; Research Council grant; philanthropy. Please also attach a copy of any relevant grant awards in a separate annex (suggested wording is provided below).

[XX] has provided the project with [£XXm] of funding. The award is subject to the following conditions:

[enter detail of conditions attached to the grant award]

See grant award letter at Annex [X].

(v).VAT

Please confirm if you (or the project manager) have engaged with the Tax Team within the Finance Division to ensure the optimisation of the VAT position. Attach a Project VAT Review form (if available). For further guidance please contact the Tax Team via email at the following address:

(vi).Benchmarks

The project-specific core benchmark targets as agreed by the Project Sponsor Group should be summarised. The summary should include the baseline[5] and project targets (a basic example is provided below).
Benchmark / Baseline / Project target
Capital cost per m2 / [XX] / [XX]
Net project cost per m2 / [XX] / [XX]
[Space efficiency] / [XX] / [XX]

(vii).Carbon reduction

Summarise the impact the project will have on the University’s carbon reduction scheme. The summary should include an analysis of how the project will either make a net positive/negative impact on the University’s carbon reduction target[6].

H.Estates Impact

Please contact the Asset & Space Management Team before attempting to complete this section of the template.

(i).Capital Masterplan Options Appraisal

Confirm whether the project is already on the Capital Masterplanand if so where it fits within the scope of the options appraisal.

(ii).Shared Teaching Space

Confirm if teaching space within the new/refurbished building will be made available for use by other Departments: if so please provide details of the type and amount of space and the terms on which it will be shared. If the space will not be made available for use by other Departments, please provide a short explanation as to the reasons why.

Enter text here.>

(iii).Impact on existing space allocations

Please state if the project will result in an expansion of the University estate and if so the projected Gross and Net Internal Area.
If the new facility/building will enable the Department to give up any space currently allocated to the Department, please provide brief details – e.g. when the space will be released, the location, size and type of spaceas well as the status of the space (e.g. owned or leased by the University).

(iv).Ownership and Leases

Summarise the key provisions and terms of any existing or proposed leases. This section should also include confirmation on the following points:

Is the proposed development site already owned by the University or will it require the agreement of a new lease or the acquisition of new land?

If a new lease is required, will it be a ground lease or a lease of a constructed building? Outline the legal structure and key terms including length of lease, basis of rent/review, break options etc.

If there is an existing lease in place, is the landlord’s consent required and if so, is the landlord able to withhold consent under the lease or otherwise seek financial benefit? Will any additional rents or premiums become payable?

If new land is to be acquired freehold, outline the anticipated costs involved and any provisions which may impact the development.

(v).Restrictions on land use

Summarise any restrictions in respect of the landholdings e.g. planning permissions, overage provisions, freehold, or building specific funding conditions that will determine the legal framework within which the project is delivered[7].

I.Programme Issues

(i).Governance

The target programme should be summarised; the table below, provides a very basic and high-level example whichmapsthe RIBA work stages against key dates. The summary should also highlight:

Requirements for planning permission and/or listed building consent
The relevant work stage as well as timings associated with the need to conclude any third party negotiations (if applicable)
Requirements for BESC approval
Any related initiatives i.e. is the project part of a larger programme?
Whether there are any dependencies on the delivery of other projects to realise benefits?

The summary should also provide confirmation that the programme has been signed off by the PSG (if applicable) and details of any anticipated/approved space allocations (suggested wording is provided below).

(ii).Target programme

RIBA work stage / Date
0 Strategic Definition
1 Preparation and brief
2 Concept Design
3 Developed Design
4 Technical Design
5 Specialist Design
6 Construction
7 Use and aftercare

The project programme has been reviewed and [agreed] by the [Project Sponsor Group]. The [PSG] is working to a target programme that would deliver the operational facility in [enter date].

The following space allocations have [been submitted for approval/have been approved] by BESC:

[enter detail]

J.Risk

Summarise in brief the key risks to the successful delivery of the project alongside appropriate mitigating action.

K.Financial Sustainability

This should include a summary of the net marginal impact of both the income and costs of proceeding with the project. Please also confirm if the financial information has been reviewed and approved by the relevant Divisional Financial Controller. A template example is provided at Annex A.

[This table has been reviewed and approved for release by the Divisional Financial Controller.]

L.Sign-off

To ensure the correct level of oversight has been achieved, appropriate approval from the Divisional Secretary, Estates Services and the Development Office (where applicable) should be obtained prior to the submission of the business case to CSG (suggested wording is provided below).

This business case has been reviewed and approved for release by the Division, Estates Services and the [Development Office].

Further details are available from [give name(s) and contact details].

[1] CONFIDENTIAL: This paper may be discussed only with other members of the committee, student observers on the committee, and relevant officers; it will not be put on the intranet. Contains sensitive commentary.

[2]For some decisions more detailed equality analysis will be necessary, but for others it may be appropriate simply to make an informal note of the relevant considerations and/or to complete the checklist provided at For further information, please contact the EDU,.

[3] Where funding is sought from the University reserve, please select the appropriate funding rate. For further guidance contact Shaka Obhiozele,

[4]‘Non-exchequer funds’ are usually taken to mean money from a charitable trust or private sources and excludes research Council grants, Government funding, University loans and Departmental funding. This applies to new build capital projects only.

[5] For further guidance please contact the Capital Projects team within Estates Services,

[6] For further guidance please contact Tom Heel, in the Environmental Sustainability team.

[7] For further guidance please refer to the Asset & Space Management team.