2.5.2 Have benefits and risks been Optimism bias and mitigation have been assessed in adjusted for optimism bias? accordance with the optimism bias guidance on DH (NHS build specific) and/or HMT websites. Adjustments should be empirically (eg using data from past projects or similar projects elsewhere). See pp.29–30 and the . 2.5.3 Have the quantified benefits and For approval of capital investment schemes greater than £35 quantified risks been combined to million, and service reconfiguration business the valued establish the NPV for shortlisted benefits must exceed risk-adjusted costs by a ratio of 4:1. options? Investment proposals This represents the absolute VfM threshold in health should provide evidence of the spending. However, achieving the threshold is not a simple triangulation of demand and capacity pass/fail test and each business case will be assessed modelling, workforce strategy, individually basis. DH economists advise that this is not used service development and efficiency as a strict benchmark (that is, some cases fall below the 4:1 programme across the lifetime of the threshold, but have other important qualitative/strategic scheme. benefits). 2.5.4 Has an appropriate sensitivity This should be undertaken to demonstrate either switching analysis of costs, benefits and risks values, with the likelihood of the switch explained, or been carried out? percentages chosen and the basis for selection explained. It should include the worst case scenario. See pp.32–33.
2.5.2 Have benefits and risks been adjusted for optimism bias? Optimism bias and mitigation have been assessed in accordance with the optimism bias guidance on DH (NHS build specific) and/or HMT websites. Adjustments should be empirically (eg using data from past projects or similar projects elsewhere). See pp.29–30 and the . 2.5.3 Have the quantified benefits and quantified risks been combined to establish the NPV for shortlisted options? Investment proposals should provide evidence of the triangulation of demand and capacity modelling, workforce strategy, service development and efficiency programme across the lifetime of the scheme. For approval of capital investment schemes greater than £35 million, and service reconfiguration business the valued benefits must exceed risk-adjusted costs by a ratio of 4:1. This represents the absolute VfM threshold in health spending. However, achieving the threshold is not a simple pass/fail test and each business case will be assessed individually basis. DH economists advise that this is not used as a strict benchmark (that is, some cases fall below the 4:1 threshold, but have other important qualitative/strategic benefits). 2.5.4 Has an appropriate sensitivity analysis of costs, benefits and risks been carried out? This should be undertaken to demonstrate either switching values, with the likelihood of the switch explained, or percentages chosen and the basis for selection explained. It should include the worst case scenario. See pp.32–33.
NHSI_Capital_Regime_Investment_Annex_1_-_V5_final.docx