NSW Government Business Case Guidelines

Business cases are documents prepared to examine whether a proposal delivers value for money for the NSW Government. A business case provides information that Cabinet (or other delegated decision-maker) needs to decide whether to fund a proposal.

Business cases are needed to support effective resource allocation. They analyse whether investments are a good use of taxpayer money, align with current government priorities, and are deliverable. Business cases promote the use of evidence and supporting consideration of material issues and risks prior to a proposal being funded. A good business case is a powerful public management tool that ensures government accountability for decision making.

The Business Case Guidelines were last updated in 2018 and are reviewed every five years. Consultation undertaken across a range of stakeholders as part of this regular review revealed opportunities to better align the Guidelines with new Government priorities, and to better support agencies in developing proposals.

An overview of changes made can be read here.

The updated Guidelines should be adhered to from the next budget period (FY25/26), Business cases being prepared for consideration in the FY25/26 Budget and that are already well advanced may continue to apply the previous Guidelines.

A program is a collection of related projects to address a common problem or realise a common opportunity, delivered in a coordinated manner. It may be better, in some situations, to prepare a preliminary or full business case for the collection of projects rather than separately for each individual project.

The updated Business Case Guidelines support expanded use of program business case, and sets out considerations for determining the appropriateness of preparing either a preliminary program business case, or to seek funding using a full program business case.

See the section 2.1 in the Business Case Guidelines for further information. 
 

The Guidelines set out evidence requirements for proposals with a total cost (including capital and recurrent costs) of $10 million or more. Requirements are determined by the type of proposal (recurrent, capital or digital) its risk tier, as set out by the relevant assurance framework. Large and high-risk proposals (i.e. tier 1 and tier 2 proposals) require both a preliminary and full business case. Mid-tier proposals can prepare a single lean business case, while smaller low-risk proposals can fill in a short-form assessment template instead of a business case.

See Figure 1 of the Business Case Guidelines for a summary of business case requirements across different proposal type and risk tier.

For more information on Gateway policy see the NSW Gateway Policy TPG22-12.
 

A business case consists of 8 key components of analysis (case for change, options, cost-benefit analysis, financial analysis, risk analysis, monitoring and evaluation approach, procurement approach, and management approach). These eight components are scalable according to business case type, risk and stage. They replace the 27 business case steps under the previous guidelines.

Business cases should be proportionate to the size and risk of the proposal. This is embedded within the updated Guidelines through the different documents used to support a funding decision (Short-form assessment, Lean business case, and Full business case). Proportionality also applies within these document classes – a Full business case for a tier 1 project will need more comprehensive analysis than a tier 2 project.

See Table 2 of the Business Case Guidelines for a summary of business case requirements across different stages and risk tier.

The Fast track TPG establishes a process to allow business case and assurance requirements to be altered in limited circumstances where capital projects have an existing government commitment. The policy was developed to ensure that business cases are not developed retrospectively where they are not adding value to decision making. Strict criteria and approval processes apply so that risks and benefits of accelerating are project are identified and considered in fast track decisions.

For further information, see Fast track business case and investment assurance for government capital commitments TPG24-30.