Beacons Learning Campus Powys County Council Outline Business Case (OBC) By CPC Project Services LLP Version No: FINAL Issue Date: 26th February 2016 The OBC is submitted on a without prejudice basis to any decisions that Powys County Council’s Cabinet might be under a duty to make in connection with any statutory proposals for school organisation, or decisions on other approvals that might be necessary in order for the project to proceed. Ian Roberts, Head of Schools Senior Responsible Officer 1 2 Foreword The Outline Business Case (OBC) is submitted by Powys County Council, in conjunction with NPTC Group of Colleges, and has been developed in conjunction with a composite team from the Council. The OBC has been prepared using the agreed standards and format for business cases, as set out by HM Treasury and Welsh Assembly Government. The approved format is the Five Case Model, which comprises the following key components: The Strategic Case section. This sets out the strategic context and the case for change, together with the supporting Investment Objectives for the scheme. The Economic Case section. This demonstrates that the organisation has selected a preferred way forward, which best meets the existing and future needs of the service and is likely to optimise value for money (VFM). The Commercial Case section. This outlines what any potential deal might look like. The Financial Case section. This highlights likely funding and affordability issues and the potential balance sheet treatment of the scheme. The Management Case section. This demonstrates that the scheme is achievable and can be delivered successfully in accordance with accepted best practice. 3 Contents Foreword ................................................................................................................... 3 1.0 Executive Summary................................................................................... 10 Introduction ......................................................................................................................... 10 Strategic Case .................................................................................................................... 11 Economic Case ................................................................................................................... 14 Commercial Case ............................................................................................................... 19 Financial Case .................................................................................................................... 22 Management Case .............................................................................................................. 23 Recommendation ................................................................................................................ 25 2.0 The Strategic Case .................................................................................... 26 2.1 Introduction ........................................................................................................... 26 2.2 Part A: The Strategic Context ................................................................................ 28 2.3 Organisational Overview ....................................................................................... 29 2.4 Strategic Aims and Objectives ............................................................................... 39 2.5 Business Strategies ............................................................................................... 41 2.6 Part B: The Case for Change ................................................................................ 43 2.7 Investment Objectives ........................................................................................... 44 2.8 Existing Arrangements and Business Needs ......................................................... 47 2.9 Potential Business Scope and Key Service Requirements .................................... 70 2.10 Main Benefits Criteria ............................................................................................ 78 2.11 Main Risks ............................................................................................................. 86 2.12 Constraints ............................................................................................................ 87 2.13 Dependencies ....................................................................................................... 87 3.0 Economic Case .......................................................................................... 89 3.1 Introduction ........................................................................................................... 89 3.2 Critical Success Factors ........................................................................................ 89 3.3 Services Scoping Options ..................................................................................... 90 3.4 Service Solution Options ....................................................................................... 94 3.5 Overall Conclusion of Scoping and Service Options ............................................ 108 3.6 Short-Listed Options ............................................................................................ 110 3.7 Economic Appraisal ............................................................................................. 116 3.8 Risk Appraisal ..................................................................................................... 128 4 3.9 The Preferred Option ........................................................................................... 134 3.10 Monte Carlo Simulation ....................................................................................... 134 4.0 The Commercial Case ............................................................................. 138 4.1 Introduction ......................................................................................................... 138 4.2 Required Services ............................................................................................... 138 4.3 Procurement Strategy – Current Frameworks...................................................... 139 4.4 Procurement Option – Mini Competition .............................................................. 144 4.5 Service and Outputs Required ............................................................................. 145 4.6 Proposed Charging Mechanisms ......................................................................... 146 4.7 Proposed Contract Length ................................................................................... 147 4.8 Personnel Implications ........................................................................................ 148 4.9 Potential for Risk Transfer ................................................................................... 149 4.10 Key Contractual Issues ........................................................................................ 150 4.11 FRS 5 Accountancy Treatment ............................................................................ 150 5.0 The Financial Case .................................................................................. 152 5.1 Introduction ......................................................................................................... 152 5.2 Breakdown of the Capital Costs .......................................................................... 152 5.3 Impact on the organisation’s income and expenditure account ............................ 153 5.4 Cost Build Up ...................................................................................................... 154 5.5 Impact on the balance sheet................................................................................ 155 5.6 Overall affordability .............................................................................................. 155 6.0 The Management Case ............................................................................ 157 6.1 Introduction ......................................................................................................... 157 6.2 Programme Management Arrangements ............................................................. 157 6.3 Project Management Arrangements .................................................................... 161 6.6 Learning Centre Governance .............................................................................. 168 6.7 Project Timetable ................................................................................................ 168 6.8 Use of Special Advisers ....................................................................................... 170 6.9 Outline Arrangements for Change and Contract Management ............................ 170 6.10 Outline Arrangements for Benefits Realisation .................................................... 179 6.11 Outline Arrangements for Risk Management ....................................................... 180 6.12 Outline Arrangements for Post Project Evaluation ............................................... 183 6.13 Contingency Plans .............................................................................................. 183 7.0 Appendix ......................................................................................................... 183 5 7.1 Appendix A – Review of Secondary Schools in Mid and South Powys (February 2016) 183 7.2