McGarry Consulting are experts at drafting and presenting economic appraisals. We are praised for the quality of our business cases and our ability to provide them quickly. Consequently, we are often called upon to provide appraisal training, quality assurance and resolve issues that could otherwise delay projects.
Economic Appraisals – often referred to as ‘business cases’ – are used to ensure value for money and accountability for public expenditure. Appraisals must be applied proportionately to any project, policy or programme requiring public funds; irrespective of the level of match funding provided. Effectively, if you require large amount of government funds (capital and/or revenue), you’ll likely need an economic appraisal. The more funds, the more detailed the appraisal required.
HM Treasury set out guidelines for economic appraisals including the ‘Green Book’ and 10 step process for those projects with a total project cost over £250,000. This is supplemented by additional direction on specific issues (e.g. Optimism Bias). Within NI, further guidance is provided through the Northern Ireland Guide to Expenditure Appraisal and Evaluation (NIGEAE). Some public bodies use scaled pro-formas (basic templates) for expenditure under £1m. Most public bodies will require some form of economic appraisal to enable funding. Having this in advance, can quicken the funding/approval process.
BUSINESS CASE V BUSINESS PLAN
Most public projects or programmes will not generate a profit (e.g. streetscape improvements, grants). Therefore, a business plan is not the most appropriate form of assessment. A business case appraises the proposed project’s needs, aims, costs, risks, benefits, and management arrangements. This process examines the wider impact to society and results in a preferred option being chosen. One that represents the best value for money from a public perspective. A business plan is geared towards commercial projects that can provide a financial return to its private investors. A business case is for projects and/or programmes that provide a wider public benefit and a cost effective use of public funds.
ECONOMIC APPRAISAL PRESENTATIONS, PRO-FORMAS & QUERIES
Given the extent of UK & EU public expenditure economic appraisals are frequently required. Some public bodies perform in-house business cases and/or encourage the use of pro-formas by project promoters. If you have a large project it is critical that the rationale for funding is clear, robust and presented well. Crucially you also need to be able to address potential queries (e.g. regarding need/demand, costs/assumptions, optimism bias/risks, targets/outcomes and extent/impact of recommendations). Such queries can often delay a project for several months.
McGarry Consulting have presented economic appraisals to departmental economists, funding committees; and provided training to the public, private and community sectors on economic appraisals and appraisal techniques. We’ve also provided quality assurance services and expert legal witness testimony on Economic Appraisals (relating to EU Funds). We have completed projects across Northern Ireland and are known for being independent, thorough and being able to deliver a high-quality report in tight time-frames
Related Concepts: Feasibility Study, Options Appraisal, Green Book, Pro-Forma, Needs Assessment, Quality Assurance, Training & Expert Testimony