3.8 Costing of the CPAM should follow the detailed guidance set out in the Business Case Guide of the Scottish Capital Investment Manual. It should reflect the full cost implications of the potential investment, which would typically include:
• capital costs;
• life cycle costs;
• revenue costs;
• a quantification of risk;
• any savings.
3.9 Costs should be based on a level of design for the proposed solution (typically conventional procurement applying design guidelines) which is discussed in more detail in Chapter 12 of this Section of the guidance. In addition, it should be noted that the quantification of risks is key to the development of the CPAM and project managers should closely follow the approach set out in the previous Chapter.
3.10 The CPAM should be appraised over the project's intended period of use. This is the period over which the asset provided can be used for its specific purpose. For hospital buildings, this will normally be the remaining physical life of the building. Conventionally, new healthcare facilities are assumed to have a lifespan of 60 years. This direction of appraisal will be equivalent to Generic Economic Modelling.
3.11 It is important to note that where affordability cannot be demonstrated, it will be necessary to revisit the costs identified in the options and consider opportunities for cost reduction (e.g. by adopting a different design concept, altering the mix of upgrade/new build, etc). Any changes to the potential scheme that arise from the affordability analysis must be reflected in the output specification to be shared with potential private sector partners.
3.12 The costing of the CPAM is intensive in terms of time and resources and it is the responsibility of project managers to ensure that the level of investment and development is commensurate with the level of detail required. Project managers should pay due regard to the importance of the CPAM and commission professional advice where applicable, in particular technical advice.
3.13 Typically, the level of detail required is driven both by the assumptions on which the potential project is based and the nature of the scheme. Where, for instance, it is assumed that a project will deliver large efficiency savings through the introduction of new working practices, it may be necessary to develop areas of the CPAM in detail to demonstrate that the changes are feasible and deliverable.
3.14 Similarly, where a scheme involves the refurbishment of existing buildings rather than a new build on a green field site, it is likely that more detailed survey work would be needed to estimate precise costs, since standard cost assumptions would not be sufficient.