The financial case determines whether a project is affordable within existing budgets. The HM Treasury Green Book is the UK government's official guidance on appraising and evaluating public sector policies, projects, and programmes. It assesses funding availability and long-term financial sustainability. If a project is not financially viable, it may create financial pressures in the future. This step ensures that spending decisions are financially responsible.
The management case sets out how a project will be delivered and monitored. It includes governance structures, risk management plans, and performance measures. Effective management ensures that projects are delivered on time and within scope. Without a strong management case, there is a higher risk of project failure.
The Green Book also encourages the use of sensitivity analysis to test different scenarios. This helps organisations understand how changes in costs, demand, or external conditions could impact a project. By exploring alternative outcomes, decision-makers can prepare contingency plans. This reduces uncertainty in investment decisions.
Independent peer reviews and audits are recommended to strengthen business cases. External scrutiny ensures that assumptions and calculations are realistic. The Green Book encourages transparency and accountability in public sector spending. This leads to more credible and reliable investment decisions.
Applying the HM Treasury Green Book to business cases and investments ensures that projects are well-structured, justified, and financially sound. By following its guidelines, public sector organisations can allocate funds more effectively. This results in better value for taxpayers and improved public services. A well-prepared business case increases the likelihood of securing investment approval.