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Introduction

This section introduces the business case approach which forms the basis for activity and programme development for investment from the National land Transport Fund (NLTF).

The business case approach supports planning and investing for outcomes, ensuring early collaboration between stakeholders and progressive development of a robust, evidence based investment case.

The business case approach

The business case approach is a structured process that integrates best practice decision-making, programme management and investment assurance tools.

The approach is progressive, scaleable, transferable and principles based.

 

  • Progressive

    Progressive

    It progressively builds an investment case by:

    • identifying the core problem
    • identifying the consequences of not addressing it
    • identifying the benefits to be gained by investing in its solution
    • identifying the range of feasible options to address the problem
    • identifying the most appropriate option. 

    The approach breaks the activity development process into phases that have decision gateways. This ensures NLTF funding is not wasted by developing low priority activities that poorly achieve, or have diverged from targeted outcomes.

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  • Scaleable

     Scalable

    The business case process is scalable so that the level of effort and deliverables required to develop the investment case is appropriate to the size and risk of the problem and the proposed investment.

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  • Transferable

    Transferable

    The business case approach allows a flexible approach to activity development and consideration of a wide range of alternatives, including the potential transfer of solutions to a non-transport stakeholder.

    For example, a business case developed to address a transport problem may identify improvements to bylaws, land use policy or contributing factors, such as radio reception, provides the most effective solution. The business case may then be used to support these changes, even though they are not eligible for funding from the NLTF.

    Equally, a non-transport business case may identify that the best solution involves transport improvements. In this instance, the transport investment may be justified through transfer of the existing business case.

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  • Principle based

    Principle based

    The business case approach of problem and benefit identification, stakeholder engagement and option consideration is mandatory, however business problem owners seeking funding from the NLTF do not have to follow the exact process set out in the "How to use the Business Case Approach" section.

    An alternative process may be employed provided the requirements of the business case approach are met at each investment gate as set out in the assessment of the business case. 

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Why implement a business case approach

The Transport Agency has implemented a business case approach as  it supports good decision making.

 

  • How the business case approach supports good decisions

    How the business case approach supports good decisions

    The business case approach supports good investment decision making as it:

    • generates clear understanding of problems, consequences and benefits at the outset
    • improves the strategic and outcomes alignment
    • increases responsiveness to changes in expected outcomes.
    • builds the case for investment progressively
    • involves all stakeholders along the way
    • enables consideration of a wide range of alternatives and options to address a problem.
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  • Results of using a business case approach

    Results of using a business case approach

    Using a business case approach should lead to:

    • better and earlier decisions for funding from the NLTF
    • investments targeted to priorities
    • improved confidence of investment, with more efficient use of resources
    • better value for money
    • achievement of desired outcomes.
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Business case approach guidance

Detailed BCA guidance has been published which is designed to be used alongside online training modules developed by the Transport Agency, which are available to our partner organisations.

This guidance includes supporting information, such as tools and templates and a glossary of terms commonly used in the BCA.

Assessment of the business case

At each investment decision point an assessment of the business case is undertaken by the Transport Agency before the activity progresses to assessment under the Investment Assessment Framework. The assessment of the business case consists of a set of questions specific to the type of activity, i.e. whether it is an improvement activity, maintenance programme, public transport services programme or road safety promotion programme or  activity. 

Investment performance measurement in the business case approach

Throughout all stages of developing a business case, the Transport Agency and Approved Organisations need to consider how the performance of investments will be measured. Early in the business case approach, the performance measures will need to be developed.

When the activity or programme has been implemented, its performance will be tracked against those measures. This will ensure an ongoing evaluation of the success of investments. From the lessons learned through performance monitoring, a better understanding can be gained of how improve future investment proposals and decisions.

Information on how the Transport Agency monitors investment performance should assist Approved Organisations and the Transport Agency to identify and develop appropriate monitoring measures in the development phase.

Further information

The background to the Better Business Case framework being implemented by the Transport Agency can be found on the Treasury website(external link).

Business Case Approach training modules have been developed by the Transport Agency and are available to our partner organisations.

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