1.2.1 The principles of appraisal apply to all decisions and proposals involving expenditure or resources. They apply equally to policies, programmes and projects.
SGHD requires the principles of economic appraisal to be applied, with appropriate and proportionate effort, to ALL decisions and proposals for spending or saving public money, and any other decisions or proposals that involve changes in the use of public resources.
1.2.2 For example, appraisal must be applied irrespective of whether the relevant public expenditure or resources:
• involve capital or current spending, or both;
• are large or small;
• are above or below delegated limits.
Examples of Decisions that Require Appraisal | |
Policy and programme development | Decisions on the level and type of services or other actions to be provided, or on the extent of regulation. |
New or replacement capital projects | Decisions to undertake a project, its quality, scale, location and timing, and the degree of private sector involvement.
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Use or disposal of existing assets | Decisions to sell land, or other assets, or relocate facilities or operations, whether to contract out or market test services. |
Specification of regulations | Decisions on the standards for health & safety, environmental quality, sustainability, or to balance the costs and benefits of regulatory standards and how they can be implemented. |
Procurement decisions | Decisions to purchase the delivery of services, works or goods, usually from private suppliers. |
1.2.3 It is important to begin applying appraisal early in the gestation of any proposal that has expenditure or resource implications. The justification for incurring any expenditure at all should be considered. Appraisal should be applied from the emergence of a need right through to the recommendation of a particular course of action. It should continue to be applied, where applicable, in the subsequent assessment of bids from the private sector obtained through a tendering process, until a contract is awarded.
1.2.4 Retrospective appraisal, that is going through the motions of appraisal after decisions have been taken or expenditure committed, is bad management practice. Appraisal should not be used merely as the means to refine the details of a predetermined option, or to provide post hoc justification for decisions or actions already taken.
1.2.5 Approvals in principle should not be granted, nor should commitments to funding be given, prior to the completion of a satisfactory appraisal and business case. The importance of appraisal to the approval process is elaborated in section 9 below.
1.2.6 Appraisal reports contain information on the relative merits of different potential investments. NHSScotland bodies should use the results of appraisals as an input to the prioritisation of their spending plans.