A CHECKLIST FOR PREPARING INITIAL AGREEMENT DOCUMENTS

Transcription

1 Finance, ehealth & Pharmaceuticals Directorate Capital and Facilities Division Enquiries to: Steven Hanlon T: E: Chief Executives, NHS Boards and Special Boards Directors of Finance, NHS Boards and Special Boards NHS Scotland Strategic Facilities Group Director, Health Facilities Scotland In 2014 Scotland Welcomes the World 28 May 2014 (Supersedes previously issued letter dated 31 March 2014) Dear Colleague A CHECKLIST FOR PREPARING INITIAL AGREEMENT DOCUMENTS 1. This letter is aimed at those involved in the preparation, review and approval of business cases for capital projects. It provides guidance on the expected contents of Initial Agreement documents submitted to the Capital Investment Group for approval. 2. A checklist setting out the expected contents of an Initial Agreement document is attached at Annex A. This approach will be developed for the Outline and Full Business Case process through a full review of the SCIM which is due to complete by December The use of the checklist is required for Initial Agreement documents submitted to the Capital Investment Group with immediate effect. It is recommended that Boards also make use of it for projects within their delegated limits. 4. Many capital projects may result from a service change proposal. Much of the work required to prepare the Initial Agreement document also forms part of the service change process. The preparation of the document and the service change process may therefore proceed in parallel. However, Initial Agreement documents may not be submitted to the Capital Investment Group for approval until all required Board and Ministerial approvals for the service change have been granted. 5. A flowchart setting out the interaction between the service change and SCIM processes is attached at Annex B. Any queries regarding the service change process should be directed towards your Board s Performance Manager within SGHSCD. Action 6. Addressees should ensure that a copy of this letter is cascaded to all appropriate staff within their area of responsibility. 7. The attached documents clarify existing guidance and do not change the current Scottish Capital Investment Manual or service change process.

2 Further Information 8. The Scottish Capital Investment Manual can be found at the link below: Yours sincerely MIKE BAXTER Deputy Director, Capital and Facilities

3 Preparing the Initial Agreement (IA) document 1. Executive Summary and Purpose Provide a summary of the content of the document and why it has been prepared. Consider that the purpose of the IA document is: To establish the case for change and strategic fit with the organisation s corporate/service strategies and with national policies and priorities To clearly identify the desired outcomes from the proposed project To a present a preferred way forward 2. Organisational Overview Provide a snapshot of the organisation: Its mission Strategic vision, goals, business aims and service objectives Current activities and services, and key stakeholders and customers Organisational structure 3. Business Strategy & Aims Describe existing and future corporate and service plans, including any relevant national initiatives, and how the proposed investment will fit within them and support them. How does the programme/project reflect the current policy and organisational environment, and does the scope of the programme/project fit with the strategy? How does the programme/project relate to Local Delivery Plan objectives and what impact will it have on relevant HEAT targets? How does the programme/project relate to key corporate strategies e.g. IT, workforce, asset management? Is the corporate or clinical strategy to which this programme/project contributes agreed with the Board or appropriate sub-committee? Has the Board or appropriate sub-committee agreed the scope of the programme and its alignment with policy objectives, organisational strategy and/or change priorities? Have options for collaboration and shared service provision have been considered and maximised? 4. Investment Objectives Define the desired outcomes that the investment is intended to achieve in a set of objectives for the project/programme. Identify the relevant stakeholders for the project/programme and describe their needs Objectives should be customer-focussed and describe what is to be achieved rather than the potential solution

4 Objectives should be SMART and the baseline data against which benefits are to be achieved should be defined It should be clearly set out how the objectives relate to the organisation s policies, strategies and plans, as set out above Where applicable, describe the link between the objectives and government performance and delivery targets Objectives should include any applicable sustainability and design quality requirements 5. Existing Arrangements Describe how services within the scope of the proposed project/programme are currently organised, provided and supplied. For each investment objective, discuss whether and how well current arrangements meet the objective. 6. Service Change Before an Initial Agreement is submitted for approval by Scottish Government Capital Investment Group, all Ministerial and Board approvals for service change should be in place, as set out in Chief Executive Letter (2010) 04. Set out: The process of engagement and consultation with stakeholders in developing the proposals The recommendations considered by the NHS Board and the date the NHS Board gave approval If a major service change, the date Ministerial approval was given and, if any requirements were made by Ministers, that these have been / are being implemented That engagement and communication with stakeholders is on-going as implementation commences 7. Business Needs Describe the problems, difficulties and inadequacies of the existing arrangements in meeting each of the investment objectives, taking into account current and future demand, changes to policy and national priorities. It will usually be necessary to include: Projections of the nature and level of demand for relevant services Descriptions of stakeholder requirements, distinguished between current and future Assessments of the change needed to current arrangements to meet the objectives 8. Potential Scope & Service Requirements Prepare an outline of the scope of the project or programme and describe the high-level service requirements. This should include:

5 Description of the business areas, functions and the parts of the organisation that will be affected by the project or programme (For more complex programmes) What are the component projects and subprogrammes of the programme, and why is it structured in this way? Description of programme strands and/or sub-programmes and main projects, with explanation of how each will contribute to the required outcomes; key deliverables and identification of key interdependencies An indication of which requirements are core, desirable and optional 9. Benefits Provide a description of the main benefits that the project/programme is expected to deliver. The benefits identified should relate to service provision as well as the physical infrastructure. Include in the description: Which stakeholders each benefit applies to and whether the organisation benefits directly Whether each benefit is cash-releasing or non-cash-releasing Whether each benefit is quantitative or qualitative in nature An indication of whether benefits will be realised in the short-, medium- or longterm An assessment of the relative value of the benefits in terms of high, medium or low Clear links between the benefits and the current and future stakeholder needs described above Evidence that the benefits can be evaluated in a practical and affordable way An outline of a benefits management strategy, and a plan to measure delivery of outcomes in terms of performance measures 10. Strategic Risks Identify and describe the main strategic risks associated with the project/programme and discuss proposed strategies for monitoring and managing them. Set out the assurance arrangements for the project/programme. Discuss contingency plans associated with the project/programme. The discussion of the main project/programme risks should include: A list of major business, service and environmental risks Analysis of likelihood and impact of risks Description of early warning indicators to help monitor the risks Discussion of monitoring and managing risk and assurance mechanisms should include: Identification of a governance framework and procedures for risk management in the programme, and allocation of responsibilities Details of the risk allocation (to whom allocated and why) with high level plans for managing them Description of escalation procedures

6 Evidence of regular review of risks, mitigation options and contingency plans Critical friends to the programme (e.g. internal audit, procurement, specialists and/or peer reviewers co-opted onto the Programme Board) appointed, with evidence that they challenge assumptions, decisions and risks Gateway Reviews, health-checks and/or policy reviews incorporated into plans Evidence that the programme is subject to the organisation s assurance framework for its portfolio of programmes and projects Discussion of contingency planning to include: Decisions about contingency and, where necessary, business continuity arrangements Programme s effects on public services analysed, and decisions taken about those for which contingency arrangements will be needed The programme/project risk register should be attached as an appendix to the IA document. 11. Constraints & Dependencies Discuss the constraints that the project/programme must operate under, taking account of affordability and national policies or initiatives. Also describe actions or developments that need to be in place for the project to be successful, including outputs from other projects. Consider the land/site strategy (dealing with e.g. acquisition, title issues, ground conditions, surveys enabling works). Please provide an update on the current status of land/title/planning matters. 12. Critical Success Factors Critical Success Factors (CSFs) are the attributes that describe what success looks like for the project or programme being considered. They should be crucial, not desirable, and should not be set so tightly that they exclude important options. CSFs should be informed by the investment objectives and the benefits, but should not duplicate them; CSFs are not the outputs or outcomes of the project/programme, but the attributes that a solution must have to deliver the benefits and meet the objectives. CSFs will vary depending on the project, but should usually include: Fit with business needs Strategic fit with other strategies and programmes Value for money Level of risk Achievability Supply-side capacity and capability Affordability 13. Long-list Options Identify a wide range of long-list options that meet the investment objectives and deliver the benefits identified above. Best practice is to consider around a dozen long-list options. The Green Book provides guidance on generating options, but as a minimum:

7 Include status quo, do nothing and/or do minimum options as appropriate. At least one of these should be used Consult senior managers for business input Consult stakeholders and customers for user input Consult relevant specialists for technical input Undertake an analysis of the strengths, weaknesses, opportunities and threats associated with each long-list option (SWOT analysis). For each option, record: A brief description of the option An assessment of how well the option meets the investment objectives An assessment of how well the option meets the Critical Success Factors The main advantages and disadvantages of the option A conclusion, with reasons, on whether the option should be: Taken forward as the preferred option Taken forward as an option on the short list for appraisal Discounted and discarded While carrying out SWOT analysis, consider: The requirements of the government s Health and Social Care Integration agenda It is preferable that implementation be broken up into manageable steps and phased delivery where appropriate, so that big-bang approaches are avoided Take account of relevant impact assessment and appraisal issues such as Regulatory Impact, Sustainable Development and Environmental Appraisal 14. Preferred Way Forward and Short-listed Options Outline a minimum of three short-list options. One option should be the status quo, do nothing or do minimum option. Indicate which option is the preferred way forward. At this stage it is helpful to include evidence that stakeholders are supportive of the intended way forward. For the short-list options, please provide: Indicative costs An outline of the commercial case for the project/programme An outline financial case for the project/programme An outline management case for the project/programme Guidance on these outline cases is provided below Outline Commercial Case Provide a high level assessment of the commercial and procurement strategies for the investment. The commercial strategy outline should: Identify whether the project will be take forward under hub, NPD or Frameworks Scotland, and discuss the basis for the decision Assess the likely attractiveness of the project to potential suppliers

8 Describe how the organisation will obtain the best available deal from the market Describe supply-side capability and capacity Identify any areas where the project scope is intentionally unresolved in order to discuss alternative approaches with the market, and confirm that any anticipated implications in terms of, for example, affordability and timetable, have been assessed The procurement strategy outline should include: A description of the procurement strategy in place and how it applies to the programme/project An assessment of possible procurement methodologies explored, including NPD for new build projects in excess of 20m, where not covered by arrangements under the hub initiative 14.2 Outline Financial Case Provide a high level assessment of the financial case for the investment, including A statement of the organisation s financial situation Estimated revenue and capital costs for the project/programme Revenue and capital constraints and discussion of the resources available for the investment Description of financial contributions to the project/programme to be made by external partners 14.3 Outline Project Management Case Describe the key elements of how the project/programme will be managed, including: The structure of the project/programme, how it reports to any over-arching programme, and how any constituent projects report to it Who is involved with the project, both inside and outside of the organisation, including users, commissioners and other key stakeholders Key appointed personnel and description of why they are suitable to take on their roles Current and planned use of specialist external advisors Assurance that the necessary resources are available and that those involved have appropriate skills, experience and capacity An high level project plan, outlining timescales, activities, dependencies and deliverables Other management considerations, including change management and benefits evaluation

9 ANNEX B Identify strategic options and need for service change Initial discussion with SGHD sponsor in cases of potential major change Develop initial comms/stakeholder involvement plans in liaison with SHC Undertake pre-engagement activity with key stakeholders Options Appraisal in line with Green Book, SCIM and SHC guidance Proposed change considered major? Confirm with SGHD sponsor No Proceed with proportionate public engagement as agreed with SHC Yes Ministers decide to subject proposals to Independent Scrutiny? No Yes Independent Scrutiny Undertake Formal Public Consultation SHC assurance report to NHS Board (to be passed onto SG in cases of major service change) NHS Board Decision on Service Change Non- Major Ministerial Approval Major Yes No Revisit proposals Commence Business Case process (SCIM) if infrastructure investment case Proceed to implementation Feedback and Evaluation