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8.5 Business Cases and Expenditure Approval

8.5.1In approving any project, policy or programme, there should be an early opportunity for approving authorities to consider and influence the choices made. This could take the form of a formal submission of a SOC for approval or, on some occasions, informal contacts between the project sponsor and the approving authority.
8.5.2Where expenditure proposals exceed the Department's delegated limits, DFP Supply will act as the approving authority.
8.5.3

For all major projects and high profile cases, Departments are required to submit a SOC to DFP Supply for approval in accordance with FD(DFP)12/11 before proceeding to develop an OBC. Relevant cases in this context are:

  • capital projects with a capital value of £20m or more;
  • all revenue projects which fall above the department's delegated limits and for which total central government costs will be £20m or more over the project's life;
  • all projects, irrespective of cost, that set precedents, are novel, are potentially contentious, could cause repercussions elsewhere in the public sector, or are potentially politically sensitive.

The £20m thresholds refer to costs expressed in real terms (i.e. in prices held constant at their current level), undiscounted.
8.5.4OBCs must be formally submitted to DFP Supply for all investments over delegated limits, prior to the commitment of resources and commencement of procurement.
8.5.5DFP approval of FBCs is currently required only for PPP/PFI cases.

Read on to PPP/PFI Projects

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