Demonstrating options in your Business Cases

Robin Miller-Stott

Business cases should demonstrate that the scheme put forward is the best option to achieve the objectives set for investment. In some cases, particularly for larger projects, Towns may consider providing evidence for what optioneering has been undertaken.

What is optioneering?

Optioneering often refers to the development and assessment of variations of one specific scheme being proposed. For instance, variations in a route for a road or active travel lane project. The ultimate aim of optioneering is to ensure that there is a clear audit trail and rationale for a scheme. This process should be proportionate depending on the scale and type of scheme, capturing any analysis undertaken and stakeholder views.  

Why is optioneering important?

Optioneering can be a useful process for Towns to help refine options (if there are positive and negative elements), identify trade-offs between objectives; filter the number of options, and remove non-compliant options early on in the process to allow a focus on the development and appraisal of the stronger option(s). While the TIP helped to prioritise key projects, these projects may still be in development and could benefit from optioneering.

Optioneering in business cases

The need for a particular intervention will have been set out in the TIP (as we discussed in the Strategic Case Good Practice webinar), including the prioritisation process for schemes submitted for funding. Towns should summarise this within their Strategic Case. In addition to this prioritisation process, we recommend that Towns also document any optioneering process, where relevant.

Providing a rationale for a short list of options

As set out in the Green Book, proposals should initially be led by objectives and outcomes based on an evidence of need and not from the perspective of a preconceived solution. After defining a Do-Nothing scenario and objectives, Towns should demonstrate in their Strategic and Economic Cases why the chosen project is best suited to achieve these objectives and deliver value for money.

For large projects, we recommend that Towns undertake a strategic alternatives test, as set out in our Strategic Case Guidance. For example, for a road scheme, you may want to assess the heavy rail; light rail; active travel only; and public transport only options, before progressing the road option - if indeed that is the strongest performing option to deliver the SMART objectives. Transport projects can also follow DfT’s East Assessment and Sifting Tool Guidance.

This process should create a viable shortlist and preferred way forward with possibly 2-3 options for more detailed analysis, but this is only a guide. This process helps demonstrate why Towns may have chose a particular type of project (e.g. new cycling route). The Strategic Case of each Business Case should capture this evidence and rationale for investing in that project.

Assessing the preferred shortlist of options

As the project develops, Towns may go through iterations of a scheme, or optioneering (e.g different lengths or routes for a new cycling lane). Towns then may choose to assess these developing different scenarios in the Economic Case, demonstrating which options represents better value for money, with consideration of non-monetised impacts. Alternatively, they may evaluate them based on critical success factors.

Proportionality and assurance

As stated in the Green Book, the guidance should be applied proportionately. For smaller projects, there might be only one option. The local assurance process should determine what is required. As a transport planner I very often complete an Option Assessment Report (OAR). At a local level, this may or may not be a requirement for submitting a Business Case. It is possible that even an ‘OAR Lite’ could be a good deliverable to accompany the Business Case submission, depending on the scale of the project; just something that evidences well the process.