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Maximising Value For Money In The Nhs

  • Published date:
    20 July 2000

The role of the strategic outline case

Health Secretary, Alan Milburn and Chief Secretary to the Treasury, Andrew Smith, today welcomed the publication of the reportMaximising Value for Moneywhich will be a vital tool for ensuring value for money across the NHS and the whole of the public sector.

The report identifies an approach that can be adapted by all public sector organisations, including the NHS, to improve the planning and execution of large projects such as IT or building projects to obtain better value for money.

The report was produced under the guidance of the Public Services Productivity Panel member Baroness Noakes and aims to show the benefits of using a Strategic Outline Case at the start of a project. It is based on a case study of the development of the National Electronic Library for Health (NeLH).

Health Secretary, Alan Milburn said:

I welcome the publication of this report which will serve as a vital tool to help the public sector save money when developing and managing major projects where mistakes can be costly. The use of Strategic Outline Cases can help to improve the planning and execution of projects.

"It is vital in the NHS, as in every public sector organisation, that every penny is spent in the most cost effective manner and to the maximum benefit of patients. Cost effective planning and development means less wastage which means more money for direct patient care."

Chief Secretary and Chair of the PSPP, Andrew Smith, said:

The use of Strategic Outline Cases is a useful vehicle for allowing key interests an early opportunity to influence the direction of projects, minimise wasted effort and secure better value for money from the considerable sums which are sometimes spent on ill-specified projects.

"The benefits of this approach can be realised not only in the Department of Health but across Government. I would encourage all departments to learn from the principles of the Strategic Outline Case and consider how the approach could apply to future investments."

Baroness Noakes said:

"This report is based on an example of good practice in the Department of Health. The addition of a Strategic Outline Case to the planning process for new projects should result in quicker and better results when IT and capital projects are taken forward."

The key findings of the report are that Strategic Outline Cases:

  • can lead to better and quicker decision making
  • can result in better specification of projects to secure improved value for money
  • should be routinely adopted in planning IM&T and other types of investments
  • can help to establish the business need for a project and ensure that key interests are involved and support the project
  • can help identify strategic issues and objectives for a project in the light of the key criteria of: the strategic case, the economic case, the project management case, the commercial case and the financial case
  • can identify and help the management of factors that have a key bearing on the achievement of benefits from a project

The report provides guidance on how to develop a Strategic Outline Case. The approach will be tested further in the NHS and the lessons will be widely disseminated across the public sector.

Note to Editors

  1. The Public Services Productivity Panel was established in 1998 to help Departments deliver improvements in productivity, efficiency and the quality of services.
  2. Baroness Noakes (formerly Dame Sheila Masters) is a partner with KPMG. Other outside members of the panel include John Makinson, Group Finance Director of Pearson Plc; Andrew Foster, Controller of the Audit Commission; Clare Spottiswoode, Associate Partner at the PA Consulting Group; John Mayo, Finance Director of Marconi Plc; John Dowdy of McKinsey and Byron Grote, Executive Vice President of BP Amoco. Panel members contribute their time and expertise for free and are independent of the Government.
  3. The National Electronic Library for Health (NeLH) is an integral strand of Information for Health the national information strategy for revolutionising the way the NHS uses information to support the delivery of patient care. Its principal aim is to provide healthcare professionals, patients, the public and managers with easy access to a range of accredited on-line information sources about health, healthcare, illness and NHS services in order to improve the delivery of care and health outcomes.
  4. A Strategic Outline Case is an outline planning proposal developed at the start of work on a project. It is used to establish the business needs for a proposed development and any necessary investment.
  5. The Office of Government Commerce is taking forward the use of SOCs as part of their development of the Business case approach following the publication on 22 May ofSuccessful IT: Modernising Government in Action.This report is available at www.citu.gov.uk./itprojectsreview.htm
  6. Media copies of the report can be found on HM Treasury's website www.hm-treasury.gov.uk and also on the Department of Health's website at www.doh.gov.uk where the Strategic Outline Case for the National Electronic Library for Health, on which Maximising value for Money is based, can also be found.
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    020 7210 5221

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