The new Scottish Capital Investment Manual

Presented by:

Paul Mortimer: Asset Management Policy Advisor for HFS

Yvonne Summers: Performance Manager - Health Performance and Delivery

Directorate

Today’s Overview:

• Principles of good investment planning

• A journey through the business case process

• Plus, context from CIG members who receive your business cases

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SCIM Refresh – current status

• Draft guidance is now available for use

– Strategic Assessment

– Initial Agreement

– Outline Business Case

– Risk Management & Benefits Realisation

• Recommended for all live & future projects

• Seek guidance for existing business cases

• Real testing & feedback on guidance

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4

Service

Planning

(P)AMS

Business

Case

process

Capital

Planning

System

EAMS

SAFR

Local

Delivery

Plan Where are

we now?

Where do we

want to be?

How do we

get there?

National

perspective

Strategic & Investment

Planning Process

Strategic

Investment

Prioritisation

IJB’

Strategic

Commiss-

ioning Plan

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Impact on

Patient

Care?

Stakeholder

Option Appraisal

Impact

Assessment &

Engagement Plan

Yes

No

Service

Change

process:

Major

Service

Change?

Other Engagement

Opportunities

Consultation &

Ministerial

approval

Proceed to

Business Case

process

Yes No

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Service

Planning

Strategic

Assessment

New SCIM framework

Initial

Agreement

• Develops the service change proposal

• Engages with stakeholders

• Identifies ‘major service change’

• Brief outline of proposal

• Indicates intentions to Scottish Government

• Used to assess strategic priority

• Evidence base of need for change

• Confirms benefits of investment

• Identifies preferred strategic / service solution(s)

Service Planning

• Service Change process comes before Business Case process

• Well-established service change process already in place

• Requirement for capital investment should grow out of good service redesign

• SG is buying outcomes, not buildings

• Stronger collaboration and input from strategic planners / service planners required

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Focus on Outcomes

• Greater emphasis needed on demonstrable

benefits, right from the start

• Risk register must encompass organisational &

service risks that may impact on outcomes –

not just construction risks

• Project evaluation must consider more than

lessons learnt from the building project

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Top tips:

• Project needs to be set in your broader strategic context – what else is happening and how will this fit/contribute?

• Don’t tell us what we all already know (presume I have read the 2020 vision!)

• Outcomes and benefits have to be credible – so be realistic

• Be proportionate about level of detail & type/extent of engagement – depends on size & complexity of project

• We’re here to help – as early as possible

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How the new SCIM will help you to achieve this...

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Strategic

Assessment

• Brief outline of proposal

• Indicates intentions to Scottish Government

• Used to assess strategic priority

Strategic Assessment

• It describes your initial proposal

• It needs to be a shared view of proposal

• It provides the rationale for investment:

– That there is a need or opportunity for change

– That the benefits are significant

– It will be important for NHSScotland

• It should be included in Boards’ PAMS

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PROJECT: A Care Village

What is the need for change?

What benefits will be gained from addressing

these needs?

How do these benefits link to NHSScotland’s Strategic Investment Priorities?

What solution is being considered

Patients are staying in hospital for longer

than necessary

More patients than necessary being

discharged to care homes rather than

home

Unable to afford projected increasing demand for service

Existing facilities are functionally

ineffective & unable to support proposed

service model

Improves quality of life through care provided

Ensures timely discharge from hospital

Improves financial performance

Improves functional suitability of the

healthcare estate

Reduces people waiting more than 14 days to be discharged from hospital

into more appropriate care setting

Improves support to allow people to live

independently

Increases proportion of people with intensive

needs being cared for at home

Person Centred

Safe

Effective Quality of

Care

Health of Population

Value & Sustainability

Prioritisation Score Full range of Older

People’s health & care services within

‘a location’

Integration of health & social care

services & co-location of

supporting services

Existing NHS, Council and GP

health, community & social care

service providers

Expansion of community hospital

facility

Hub – value circa £40m

Service Scope/Size

Service Arrangement

Service Providers

Impact on Assets

Value & Procurement

Identify Links

Identify Links

What are the Current Arrangements: Older People’s Health & Care services in ‘a location’ currently support 100 community beds, 75 care home beds in 4 locations, and 5 separate GP practices. They are all run at capacity.

TOTAL SCORE

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Initial

Agreement

• Evidence base of need for change

• Confirms benefits of investment

• Identifies preferred strategic / service solution(s)

Initial Agreement – key steps

• Service planning & stakeholder engagement: – Must engage with stakeholders for any service

change

– You may have already agreed the outcome of an option appraisal exercise

– If so, then describe process and compare with Do Nothing

– If not, then test strategic plans here

– Adopt agreed stakeholder engagement recommendations

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Initial Agreement – key steps

• Describe current arrangements / do nothing

– This is an important step

– It becomes the benchmark for all investment decisions

– It covers services and buildings

– How might things get worse?

– Any interventions would become ‘Do Minimum’

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Initial Agreement – key steps

• The need for change

– The need for a new building isn’t enough

– Problems with existing arrangements

– Any drivers for change

– Opportunities for improvement

– Any external drivers?

– Keep it concise and to the point

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Initial Agreement – key steps

• Demonstrable benefits

– IA likely to be returned if not done

– They are the rationale for any investment

– Ask yourself, “how will I be able to demonstrate that they have been delivered?”

– A benefits register is required

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Initial Agreement – key steps

• Strategic risks:

– Ask yourself, “What risks might impact on the success of the project?”

– What actions are you taking?

– Emphasis on client and service risks at this stage

– A risk register is required

– Examples are provided

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Initial Agreement – key steps

• Exploration of strategic / service solutions

– Again, not building solutions

– Only need to describe process and compare against

Do Nothing if optional appraisal already done

– Otherwise, fully explore alternative service / strategic

solutions

– Need to be real, step-change differences

– SWOT analysis of short list & test against investment

objectives, vfm & affordability

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Initial Agreement – key steps

• Outcome:

– Single service / strategic solution identified

– Or more if appropriate

– Plus, Do Nothing / Do Minimum

Strategic solution + implementation option = OBC Option

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Initial Agreement – key steps

• Readiness to proceed to OBC?

– What are programme & procurement plans

– Is this likely to be affordable?

– What resources are needed?

– Are appropriate governance arrangements in place?

– Should this proposal still be a priority for SG?

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Outline

Business

Case

• Tests vfm of implementation options

• Identifies affordable preferred option

• Sets out arrangements for delivery

Strategic Case

Economic Case

Commercial Case

Financial Case

Management Case

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Outline Business Case:

5 Case Model

• Has anything changed since IA

• May need more details of existing arrangements & need for change

• Update on design assessment process

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Strategic Case

• Options are combination of service & building solutions

• Consider best use of assets across public & possibly third sector

• Economic Appraisal: NPV or NPC?

• Discounted for presumed life of asset

• Use GEM, & CPS for life cycle costs

• Preferred option: best judgement of economic, benefit & risk appraisals

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Economic Case

• All procurements need to be set out (construction, advisors, equipment, pre-works, etc)

• Set out scope of works:

– Design information

– Included services

• Highlight ‘interesting’ contractual arrangements

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Commercial Case

• Mainly as before

• Standard templates for capital & revenue financial projects

• Is the project affordable?

• Need confirmation of stakeholder and funding support

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Financial Case

• Are you ready & capable of taking this project forward?

• Are project resources available & capable?

• Is a full benefits realisation plan available?

• What community benefits will be delivered?

• Have all strategic & project risks been considered together?

• Are you already thinking about the commissioning stage?

• How will the project be monitored and evaluated?

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Management Case

Strategic Case

Economic Case

Commercial Case

Financial Case

Management Case

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Full Business Case:

5 Case Model

Full Business Case

• Has the strategic case for investment altered?

• Does the OBC’s preferred option remain valid?

• What is the recommended v.f.m. commercial offer / service?

• Is the project financially viable?

• Is the organisation ready to proceed to contract award and implementation?

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New SCIM: Looking ahead

• Continue with soft-launch of IA & OBC

• Evaluate feedback prior to formal launch

• Adopt Strategic Assessment & project prioritisation as part of PAMS process

• Complete FBC guidance

• Review training & support needs

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Final words....

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