About this guide
What is this guide?
‘Making the case for digital: A guide for local authorities’ aims to support councils in developing digital investment businesses cases. Its objectives are to:
- facilitate strategic thinking for securing digital investments ensuring alignment with the corporate plan and delivering better outcomes for communities
- encourage officers to think about the need to invest in people capabilities alongside technology capabilities
- encourage council officers to make the case for scalable digital investments that support long-term security, sustainability and interoperability
- share resources and tools to support business case development.
Who should use this guide?
This guide is aimed at anyone with a responsibility for preparing a business case for a digital investment. This might be heads of digital or heads of service/managers or directors. It may also be useful for chief finance officers who are involved in preparing the business case working alongside project teams to prepare the financial assessment.
How to use this guide?
This guide begins with an introductory overview explaining:
- what we mean by digital investment – setting out the LGA definitions of digital investment, and the distinction between enabling and service specific investment
- the case for digital investment – particularly within the wider national and local government context.
This provides important scene setting that can assist you as you read through the main section of the guide:
- the digital business case blueprint – this is structured around the Government’s Green Book five case model. You will find five sections in this guide each aligned to one of the five cases. Each section outlines the key considerations for that case, alongside practical tips and prompts to stimulate thought and guide your business case development.
An appendix is also provided at the end with examples from councils to provide content development ideas for your business cases.
What is digital investment?
Digital investment refers to expenditure on digital technology, data and skills to improve how services are designed, delivered and operated. In practice, this often includes a mix of capital and revenue expenditure, with a significant proportion relating to ongoing costs such as software, hosting, support, and digital skills.
Digital technology and data capabilities
Table 1 provides an example of some of the different types of digital technology and data capabilities that councils might invest in.
| Category | Technology examples |
| Automation and integration |
|
| Business management systems |
|
| Cyber security |
|
| Data management |
|
| Geospatial technologies |
|
| Resident facing platforms |
|
| Hosting infrastructure |
|
Digital skills
These cover the essential, practitioner and leadership skills, organisations need to effectively utilise, develop and manage digital tools and technologies.
- Essential skills: These are the foundational digital skills required across the whole workforce to deliver business-as-usual activities. These might include using software applications, being able to communicate through digital tools and following data privacy and security practices and principles.
- Practitioner skills: These are specialised skills needed to build, design, manage and maintain the technologies that underpin digital services. These might include software development, cyber security expertise, user experience (UX) design, business analysis, agile project management and so forth. The cyber, digital, data and technology framework for local government provides an overview of the main practitioner skills used across local government.
- Leadership skills: These are crucial for setting the digital vision, strategy and empowering teams. With digital services becoming more prevalent, modern leaders should understand how to make effective decisions about technology adoption and implementation and how to foster a culture of innovation, flexibility and collaboration in their organisation.
Service specific versus enabling digital investments
Digital investments in local government tend to fall into two broad categories: those that are focused on improving a specific service, and those that build enabling capabilities across the organisation.
Service specific investments typically focus on optimising or improving a specific service or process such as replacing back‑office planning systems or introducing new case management systems for adult social care or children’s services. The benefits and return on investment (ROI) for these digital investments are often easier to quantify, as they may deliver direct cashable savings.
Alongside these, enabling digital investments deliver cross‑cutting benefits across the organisation. These investments aim to support sustainable transformation for example by joining up services, enabling single views of residents and households through linked datasets, and supporting more proactive and preventative services through data‑driven insights. Examples include shared data platforms, integration layers, identity and access management, analytics and AI capabilities, as well as the people and skills required to design and operate them.
This distinction matters when considering ROI. While the benefits of service-specific investments are often more immediate and easier to quantify, the value of enabling investments is typically indirect, realised over a longer period, and dependent on how widely they are adopted across the organisation. As a result, traditional approaches to measuring ROI may not fully capture their value.
In these instances, business cases should set clear expectations about how value will be realised, placing greater emphasis on long-term sustainability, service improvement, and community outcomes, alongside financial benefits. This may require a more iterative approach to delivery, with regular review points and a focus on adoption and change, rather than assuming benefits will be realised automatically.
As you review this guidance, consider whether your investment is service specific or enabling and how you will engage with senior leaders and colleagues around ROI and benefits realisation, ensuring expectations are outlined from the outset. Where benefits are indirect consider how to frame the investments in the context of how it can deliver better community outcomes and long-term sustainability rather than traditional ROI.
The case for digital investment
Why invest in digital capabilities?
People’s expectations for accessing services have fundamentally shifted. From banking and retail to public services, individuals increasingly rely on online platforms for information, advice, and transactions. Furthermore, next-generation technologies, such as Artificial Intelligence (AI), present unprecedented opportunities to streamline and transform public services through process automation and predictive capabilities at a time of significant financial challenges for local government.
Against this backdrop, the UK Government published a 'Blueprint for Modern Digital Government', in January 2025, setting out a vision to transform public services by leveraging digital technology and data to making it easier for citizens to access support. To achieve this, the blueprint outlines plans to invest in digital talent, skills and capabilities and to strengthen the digital and data foundations that underpin services – in the process – moving away from unsupported or siloed legacy systems holding back cross cutting transformation efforts towards more secure, resilient and interoperable joined up public services.
The benefits identified in the blueprint and beyond include:
- Enhanced efficiency and cost savings: Digital capabilities can streamline operations and enable more responsive, efficient, cost-saving services. The 'State of Digital Government Review' estimates that £45 billion of annual savings could be realised through whole system digital transformation.
- Improved user experience and accessibility: Accessible digital platforms can provide a more seamless user journey for all residents, by joining up services and providing wraparound support.
- Data-driven decision making: Better data management can lead to more effective performance monitoring and data analysis, which can enable informed policy decisions and service improvements to be made as well as earlier intervention and prevention.
- Enhanced transparency and accountability: Digital platforms provide consistent, auditable data that supports evidence-based decisions and statutory returns thus promoting open governance and improving transparency and accountability.
- Resilience and cyber security: Investing in modern cloud infrastructure and cloud native solutions can provide security benefits through automated patching and disaster recovery and back-up solutions as well as less downtime through distributed availability zones.
- Improved social and health outcomes: Digital platforms can facilitate access to information, advice, and guidance online, and support remote delivery of health and social care services, improving outcomes for vulnerable residents.
However, unlocking the widescale benefits of digital capabilities is challenging. The State of Digital Government review identified five root causes holding back the digital transformation of public sector services:
- Leadership: Capability gap due to perceptions that there is little reward for prioritising digitisation.
- Talent: A lack of digital talent due to difficulties with recruitment and retention.
- Funding: Insufficient or unsustainable funding models particularly because of a shift from capital purchase towards subscription-based funding.
- Structure: Fragmented structures and siloed organisations inhibiting standardisation.
- Measurement: Inconsistent and insufficient measurements of digital performance to make the case.
These root causes highlight why it is important to invest in digital skills and technologies. Without embedding these considerations into business cases, there is a risk that digital investments only deliver isolated or short‑term improvements rather than, organisation‑wide cross cutting value.
A digital business case blueprint
Why develop a business case?
A business case is an important document for securing buy in from stakeholders by demonstrating the affordability, return on investment (ROI) and potential benefits of a new proposal. By illustrating these points in a business case, it can help senior stakeholders make more informed decisions and ensure that there is effective governance, accountability and oversight over a digital investment, thus increasing the chances of benefits being realised and minimising risks.
What to include in a business case?
The Government’s Green Book guidance proposes a five-model structure for business case development. This guidance is used for centrally funded public spending proposals considered by the Treasury and Cabinet Office. Our blueprint adapts this guidance for local authorities by setting out questions and prompts for officers to consider when building the case for a digital investment.
The five elements are:
- The strategic case: Sets out the case for change.
- The economic case: Appraises the options available based on the anticipated ROI as well as the potential benefits.
- The financial case: Considers the affordability of the investment to an organisation within a given time frame.
- The commercial case: Assesses the market readiness and viability to deliver a solution.
- The management case: Evaluates governance structures to manage risks and maximise potential benefits.
Making the strategic case
The strategic case shows how the spending proposal aligns with the organisation’s corporate plans and wider national policies and makes an evidence-based case for change. The purpose is to show how the spending proposal connects to the bigger picture.
Some of the points that can be covered in this section include:
- strategic fit and alignment
- defining the need for intervention
- scope and scalability.
Strategic fit and alignment
Digital investments should act as a value driver which align with the organisation’s strategies and business model. The business case should explain how the investment can enable the council to deliver its goals. It should also consider external factors including government policy, national programmes, standards and guidance that may have an influence on the proposal or creates the need for the investment.
It should also be clear whether the investment is primarily service specific or enabling. For enabling investments, it should be clear how it will support multiple services and ultimately deliver corporate priorities.
Tips
- Alignment with corporate and service level policies: Identify any existing council corporate objectives and service level policies that this investment aligns with, particularly those with a digital focus (eg digital or transformation strategies as well as any external sector-specific frameworks or guidance such as Digital working in adult social care: What Good Looks Like)
- Local digital declaration alignment (if applicable): Detail how the proposed digital investment actively embodies the principles of the Local Digital Declaration.
- Alignment with Government Digital Guidance and Standards: Show a clear understanding of relevant government digital standards and guidance (eg Government Service Standard and Technology Code of Practice) and what the benefit is of investing in capabilities to meet these standards.
Questions to consider
- How does the investment deliver on corporate missions and objectives?
- Is this investment primarily enabling, service‑specific or both?
- What service level strategies and action plans exist that this investment will support? For example, digital strategy, economic growth, climate change, customer access.
- Examples: How can system integration improve user experience and improve customer access? How can sensors monitor energy consumption?
- How does the investment align with national policies, frameworks and standards?
- Examples: How can investing in people capabilities ensure the council builds services/technology that meet the Government’s Service Standard or Technology Code of Practice? What is the long-term value to the council of meeting these standards?
- How can the investment contribute to moving away from unreliable or unsupported legacy and siloed systems towards a more modern, resilient and joined up public sector service landscape?
Defining the need for intervention
The strategic case should clearly demonstrate the need for change and explain how the proposal will improve existing processes. This may relate to improvements within a specific service, or to organisation‑wide change in the case of enabling digital investments.
Discovery work should be conducted to analyse the current state of processes, services, and systems, identifying problems, inefficiencies, and opportunities for improvement. These may include user research (such as interviews, surveys, focus groups and workshops) to understand user and staff needs; analysis of data and performance metrics; process mapping and workflow analysis and skills audits to identify capability gaps. The business case might also be focused on infrastructure improvements or replacing legacy systems with known vulnerabilities in which case it may be necessary to gather information on the condition of the existing infrastructure and systems for example from penetration testing data.
For enabling digital investments, insights from discovery work can also be used to identify suitable services or functions where new capabilities can be piloted, as well as a list of priority services where these capabilities could be scaled across the organisation. This helps ensure that enabling investments are tested and deliver value early, while supporting longer‑term, organisation‑wide transformation.
Tips
The Local Digital Team at MHCLG has produced a playbook to support councils identify problems and their root causes across different services. These resources can be useful for councils undertaking discovery work. They cover areas such as estimating the cost impact of an issue and mapping processes from the surface-level problem to the root cause, which is particularly helpful for large-scale transformation programmes addressing common and systemic challenges.
Questions to consider
- What are the current inefficiencies, challenges, or risks in existing processes that necessitate change and how will the proposed intervention specifically improve them?
- Are there any existing technology systems that contribute to the problem and what are their limitations?
- How well do current systems align with best practice cyber security standards? Does this necessitate further investment?
- How can secure network infrastructure contribute to the long-term success of digital transformation goals?
- What specific skills gaps have been identified that may hinder digital transformation efforts?
Scope
The insights from discovery should inform the scope of the proposal and directly link to potential benefits. This may involve but not limited to:
- Building a digital team to address skills gaps that are holding back digital transformation plans and ensuring that there are skilled staff who can build or manage interoperable digital services.
- Investing in low code platforms or open source systems that provide reusable components that can be scaled across multiple services moving away from locked in legacy systems.
- Replacing manual duplicative processes with technology to optimise service delivery, reduce costs and improve responsiveness.
- Investing in websites to drive channel shift leading to improved efficiency and savings and reduced customer centre contact time.
- Replacing out of support systems or upgrading to cloud native solutions to address security or reliability issues.
- Investing in cybersecurity to bolster defences to replace insecure and expensive hosting infrastructure and ensure compliance with relevant legislation, for example the Data Protection Act 2018.
For enabling investments, it is important to take a phased/iterative approach. Therefore, the scope should outline which service the capability will be piloted with initially, eg housing and outline plans for scaling the capability over time.
Furthermore, it is important to engage with relevant stakeholders who might have an influence or interest on a project to develop the scope including specialist functions such as IT, legal, HR, data protection. These stakeholders can provide advice on technical, legal and organisational development considerations. See Table 2 for an overview of some of the relevant specialist functions that may have an influence/interest on a digital project.
| Who | Why | Key considerations |
| IT department | To provide technical expertise on integration with existing systems and infrastructure as well as cyber security and privacy considerations. They can also advise on scalability and technologies that can join up back off systems for better interoperability. | Data security, system integration, scalability, cloud strategy, infrastructure costs |
| Legal and compliance teams | To provide expertise on compliance with regulations and legislation. They can also provide advice on contract clauses such as ethical and security considerations, Intellectual Property rights and so forth. | Data protection, intellectual property, contract laws and clauses (eg cyber security, ethics) |
| Data protection or equivalent officer | To provide expertise on correct processes and procedures regarding council’s data protection obligations under GDPR such as Data Protection Impact Assessments. | Data handling, processing and consent, data risk impacts. |
| HR and learning and development teams | To provide insights on workforce impact, change management procedures, training and development needs. | Change management, skills gap analysis, training needs, organisational structure, employee engagement. |
Questions to consider
- What is the proposed scope and what outcomes are expected?
- Is the investment scalable?
- Which current and future services will benefit from this capability?
- How will you ensure that any new technology is compatible with existing infrastructure and does not compromise the security of the networks and servers?
- How will you ensure there are sufficient digital skills to deliver the project or maintain the product over its entire lifecycle?
- Are there any legal considerations related to the investment, particularly concerning data protection, ethical or intellectual property matters that could have an impact?
Making the economic case
The economic case shows the overall value for money (VFM) from an investment for the council, wider community, and environment, and presents a comparison between different investment options based on the benefits, social and environmental value and risks.
Some of the points that can be covered in this section include:
- benefits analysis
- environmental and social value analysis
- risk analysis.
Benefits analysis
The economic case should contain an analysis of the different types of benefits and a ROI should be calculated based on the monetizable benefits identified. The Green Book guidance can be used to understand how to categorise benefits into monetizable and non-monetizable benefits. The guidance refers to four main types of benefits categories:
- Quantifiable Cash Releasing Benefits (CRB): Measurable and monetizable benefits that directly reduce a departmental budget. For example, sourcing cheaper technology.
- Quantifiable non-cash releasing benefits (Non-CRB): Measurable and monetizable benefits that don’t necessarily reduce a budget. For example, improved productivity.
- Quantifiable but not monetizable benefits (QB): Measurable benefits that are difficult to monetize. For example, increase in customer satisfaction via surveys.
- Qualitative benefits (Qual): Non measurable benefits that provide context and insights. For example, feedback from user interviews.
Table 3 provides an example of some of the types of benefits from investing in digital capabilities.
| Digital capability | Overview of benefits |
| Technology capabilities |
|
| People capabilities |
|
Tips
- The Cost Benefit Analysis is a technique which can be used for measuring a programme/project’s ROI as recommended in the Green Book guidance. The equation used for Cost Benefit ROI is (benefits – costs)/costs.
- A case study by Nottingham City Council is provided in the appendix, which shows how a Cost Benefit Analysis can be conducted on a digital investment. Their case study focuses on the use of Geographical Information Systems (GIS) and 3D Urban Modelling and reveals a 2:1 benefit to cost ratio over 10 years from the adoption of this technology.
Questions to consider
- Which of the benefits listed in Table 3 are applicable to your project?
- How can you baseline data to capture improvements and validate that benefits have been realised?
- For indirect benefits, how will you ensure these can be tracked and realised over time?
- Where benefits realisation is dependent on service adoption, who will be responsible for tracking those benefits?
- How will you ensure these are accurately categorised into cash releasing, non-cash releasing, or other quantifiable or qualitative benefits?
- What strategic business priority does the benefit correspond to?
- How can the investment support long term sustainability and scalability?
Environmental and social value
To fully demonstrate an investment’s economic value, councils should also consider its wider social and environmental benefits which should also form part of the overall value for money appraisal – where these are quantifiable and monetisable.
Some examples of environmental benefits can include reducing the council’s carbon footprint by investing in energy saving technology, reducing paper consumption or promoting remote working. Digital tools can also offer solutions to address environmental challenges across the place. This includes optimising waste collection to minimise emissions, deploying sensor networks for flood monitoring and prevention and utilising data analytics to improve air quality and management.
Examples of social benefits include enhanced access to council services and healthcare or increasing local spend by procuring technology from local providers. Digital tools could also enable council staff to provide quicker and more responsive services ultimately benefitting local communities by enhancing the quality of the service provided. It can also create local jobs, accessible to the local community including residents and staff and provide opportunities for continuous personal development. By considering and quantifying these social and environmental benefits, councils can make more informed decisions that maximise the overall public value from their digital investments.
Questions to consider
- What quantifiable environmental and social value metrics can be calculated which can form part of the overall economic appraisal to demonstrate value for money?
- Can the project create new employment opportunities or improve job prospects for residents?
- Can the project support local businesses/the local economy?
- Does the project have any impacts on residents’ health and well-being (for example access to health information, promotion of healthy behaviours)?
- Will the project directly reduce the council’s carbon footprint (for example by using energy efficient technology, facilitating remote working etc)
- Will the project optimise the use of resources, such as reducing waste or improving recycling rates?
- How will the project enable environmental teams to meet climate change target such as improved air quality, optimising waste routes etc?
Risk analysis
Councils must determine upfront the potential risks and clearly set out how these risks will be managed including the likelihood of the risk occurring and the impact. Table 4 outlines examples of some of the types of risks that you may need to factor into an appraisal. These risks relate both to project risks as well as the handover to business as usual.
| Technology risks |
|
| Process risks |
|
|
People risks
|
|
| External risks |
|
| Compliance risks |
|
The risks should be quantified in order to form part of the overall economic appraisal for example by assigning a numerical value such as a scale of 1 – 5, with 1 representing low likelihood and 5 representing high likelihood.
Additionally, it may be possible to calculate the financial impacts of risks happening and include this in the appraisal. For example, the impact of inaccessible service design leading to more calls to the customer centre. Crucially, risk analysis should be conducted on the do-nothing option. For example, the risk of a data breach can be calculated in monetary terms to show costs that could be avoided by investing in better security.
Sensitivity analysis should also be employed to understand how variations in likelihood could affect the overall project outcomes. These quantified risks should be factored into the overall cost benefit analysis of each option, enabling a more accurate and comprehensive comparison.
Questions to consider
- How will the likelihood and potential impact of each identified risk be assessed and quantified?
- What are the risks from existing ways of working that could carry a financial risk to the council? Are there any costs avoided that could be factored into the economic appraisal for example?
- How will you ensure that uncertainty over complex digital requirements does not lead to significant budget increases?
- Is there an exit plan if risks manifest that are above the acceptable threshold?
Making the financial case
The financial case demonstrates how the proposed investment will be funded, ensuring affordability and long-term financial sustainability. It should also show the return on investment (ROI) based on monetary terms for the council only which is distinct from the broader value-for-money considerations in the Economic Case.
Some of the points that can be covered in this section include:
- estimating costs
- funding and affordability
- financial viability.
NB: The emphasis on direct, cash-releasing return on investment (ROI) should reflect the nature of the proposal.
Many digital investments – particularly enabling or foundational initiatives – do not primarily generate immediate cashable savings. Instead, they deliver value through longer-term sustainability, cost avoidance, risk reduction, and improved user outcomes.
In these cases, the financial case should clearly acknowledge the limits of quantifying direct savings, and demonstrate how the proposal delivers value for money in alignment with the broader assessment set out in the economic case.
Estimating costs
Councils must consider all financial costs associated with a digital investment. It is important to consider the costs across the whole lifecycle, including implementation costs, ongoing maintenance costs, staff costs, project delivery and any organisational development fees such as training costs/recruitment costs and so forth.
Tip
- The Chartered Institute of Public Finance and Accountancy (CIPFA) published a report in 2017 – Accounting for the Cloud which advocates for whole life costing. This approach evaluates the total costs of an asset or service over its entire lifecycle, including upfront, operational and maintenance expenses to inform decision making.
Table 5 outlines examples of some of the types of costs that you may need to factor into an appraisal.
| Categories | Examples of costs |
| Implementation costs |
|
|
Project delivery costs
|
|
| Ongoing costs |
|
| Organisational development costs |
|
Questions to consider
- What are the anticipated upfront, one-off costs of this project (eg hardware, software, licenses, consultancy, training)?
- What are the estimated ongoing operational costs throughout the project's lifecycle (eg maintenance, support, hosting, upgrades)?
- Have all relevant cost categories been considered, including implementation, project delivery, ongoing costs, and organisational development costs?
- What are the potential hidden costs or contingencies that might arise (eg recruitment, ongoing software maintenance, data migration)?
- What are the key uncertainties that make it difficult to accurately quantify costs for this project?
- How has the project addressed the challenge of cost uncertainty (eg phased approach, range estimates, agile methodologies)?
Funding and affordability
Securing funding and ensuring affordability are critical for any digital investment. A key consideration is whether the expenditure will be classified as capital or revenue. Traditionally, IT infrastructure was capital expenditure. However, the shift towards cloud-based solutions and software as a service (SaaS) models, with consumption-based pricing may necessitate funding from revenue budgets. Justifying these costs can be challenging, particularly when revenue budgets are under increasing pressure. Digital, IT and finance teams should work together and build the right business case and investment structure for digital programmes that ensure best value particularly where savings might be indirect. (CIPFA, 2018).
CIPFA’s report, Finance’s role in public sector transformation, recommends a flexible approach by starting small and scaling, prioritising cashable and low risk benefits to build an evidence base before moving to more complex service changes. This phased approach helps align investments with achievable outcomes.
Questions to consider
- How will the digital investment be funded (eg capital expenditure, revenue budget, external funding)?
- What external funding opportunities have been explored, and what is their potential contribution?
- How has the classification of expenditure (capital or revenue) been determined, and what are the implications for funding?
- How has the affordability of the project been assessed in the context of the council's overall financial situation?
- Has a whole-life costing approach been applied to evaluate the total costs of the solution over its lifecycle?
Financial viability
Financial metrics such as the payback period and internal rate of return (IRR) should be calculated to assess the investment’s potential return on investment. However, traditional expectations may need to be reviewed or adapted as cash releasing benefits from digital investments will be difficult to quantify.
It is imperative to involve chief finance officers in these discussions to assess the overall affordability of the proposed investment and to conduct a review of existing budgets and identify potential areas for funding reallocation. This collaborative approach helps ensure alignment with the council’s overall financial strategy, even where traditional measures of ROI are less straightforward to apply.
Questions to consider
- What is the projected ROI for the project, and when is it expected to be realised?
- What are the projected cash inflows and cost savings resulting from the digital investment?
- What key assumptions have been made in the financial analysis, and how might they impact the financial viability of the project?
- How will you ensure financial forecasts are regularly tested against emerging evidence, rather than relying solely on upfront assumptions?
- What is your exit strategy if the funding is no longer viable?
Making the commercial case
The commercial case aims to demonstrate that the preferred investment option will result in a viable procurement. This is achieved by showcasing a thorough understanding of the marketplace and assessing what is realistically achievable by the supply side, whilst ensuring the solution's compatibility with the council’s existing technical estate.
Some of the points that can be covered in this section include:
- procurement strategy and procurement route
- understanding the market and supply side
- contract and supplier management.
Procurement strategy and procurement route
A key decision for councils is whether to insource or outsource digital services or products. This decision will depend on the internal resources and capabilities available to the council. If external expertise or technology components are required, it is essential to detail the intended procurement approach. Determining the procurement strategy from the outset, along with exploring available procurement options, can significantly enhance the success of a digital programme or project. For instance, councils may consider utilising national frameworks or local call-off contracts and management frameworks for specific services.
Tips
According to the Technology Code of Practice having a clear purchasing strategy can help you understand what components, resources, support and delivery mechanisms you need. The benefits of a purchasing strategy include:
- competitive and innovative commercial products and opportunities
- greater value from choosing to build or buying your technology
- long-term financial savings
- improved supplier negotiations
- a commercial approach that supports the disaggregation of contracts
- a smoother transition of knowledge and capability once a contract or programme ends
- help with the transition to the cloud, commodity and common technology
- shorter, more manageable contracts with a streamlined renewal process
- a clearer view of contract status, risks and issues.
Questions to consider
- What is the recommended procurement strategy for this project? For example, insource, outsource or hybrid?
- What factors have driven the choice of procurement strategy? For example internal resource, skills and capacity, the potential for innovation through the market.
- If applicable, what specific procurement routes are being considered and why? For example, national frameworks, local call off contracts etc
- Are there opportunities for collaborative procurements with other councils to increase buying power and reduce costs?
Understanding the market and defining requirements
One of the significant challenges in technology procurement is ensuring interoperability with existing systems. Suppliers may need to perform numerous configurations to meet the requirements outlined by the council. Even minor customisations and workarounds can increase costs, complicate usability, hinder maintenance, limit scalability, and restrict the ability to upgrade or remove components, as noted in the GOV.UK Technology Code of Practice. Conducting pre-market engagement or benchmarking against other councils by comparing contract spend with similarly sized councils can help councils understand the available options in the market. Furthermore, councils should consider exploring opportunities to collaborate with suppliers to test and pilot solutions on a small scale before scaling to other areas of the council. By engaging in pre-market activities and piloting solutions, councils can more effectively define requirements and enhance the long-term success of their digital investments.
Questions to consider
- Has or will pre-market engagement be conducted to ensure a commercially viable solution exists?
- How will the project ensure interoperability with existing systems?
- What steps will be taken to minimise the risks associated with customisations and workarounds?
- Are there opportunities to test and pilot solutions on a small scale before wider implementation?
Contract and supplier management
Effective contract and supplier management is crucial for ensuring that external partnerships contribute to the project's success. This involves establishing clear contract terms, performance metrics, and communication channels. Councils must have the capability to manage supplier relationships, monitor performance, and address any contractual issues that may arise. This includes ensuring that contracts are flexible enough to accommodate changes in technology or project requirements. Robust supplier selection processes, including due diligence and risk assessments, are essential for choosing partners who align with the council's values and objectives. Furthermore, councils must ensure that contracts address data security, intellectual property, and compliance with relevant regulations. By prioritising contract and supplier management, councils can mitigate risks, ensure value for money, and foster productive partnerships that support long-term digital transformation.
Questions to consider
- How will supplier relationships and performance be managed and monitored?
- How will you ensure that there is flexibility to accommodate future changes to technology requirements?
- What due diligence and risk assessment plans are in place to ensure you are choosing the right partner?
- How will you ensure factors such as intellectual property, cyber risks, data privacy and ethics are considered in the supplier selection process?
Making the management case
The management case outlines the governance arrangements and delivery plan for maximising the success of the investment and ensuring that anticipated benefits are realised. This section looks at:
- governance and deliverability
- resources and capabilities
- change management.
Governance and deliverability
The business case should outline the governance arrangements and delivery plan including key milestones. It should also detail reporting arrangements to the most senior responsible officer as well as any programme or advisory boards providing strategic oversight. If there is a programme or advisory board in place, it should have cross department expertise for strategic alignment, resource allocation, and legal, compliance, technical and security advice. For long term enabling investments, it is also important to introduce review points and ensure someone is accountable for agreeing to continue or exit from a project depending on emerging evidence.
It is also particularly critical that digital projects that introduce new technologies detail how integration with the council’s technical estate will be managed. Data governance and security are also essential and require policies and procedures for security and data integrity. This may include setting up a separate data and ethics committee to ensure compliance with relevant legislation and to conduct Data Protection Impact Assessments.
Governance plans should also include benefits and risk management processes. The anticipated benefits should be tracked in a register with timelines and assigned owners as should risks with the addition of clear mitigation strategies. To facilitate continuous improvement, the business case should outline how lessons learned will be captured.
Questions to consider
- What is the proposed governance structure, and who is ultimately accountable for the project’s success?
- What board will this project report into?
- What are the key project milestones and what are the dependencies between them?
- How will project benefits be baselined, measured and realised? Who has decision making authority to exit from an investment if benefits will not be realised?
- What processes are in place for managing and mitigating risks? Have owners been assigned?
- How will you ensure that any new technology integrates with the council’s IT architecture?
- What policies and processes will be in place to safeguard data and ensure there are robust security controls in place?
Resources and capabilities: Ensuring successful delivery
Details of the project team, resources and capabilities responsible for delivery should be included. This should cover practitioner and leadership capabilities as well as any additional specialist expertise required such as Legal, HR, Comms. It should consider resources for the project itself as well as business as usual.
Practitioner capabilities may include user research, content designers, agile project managers such as scrum masters, product owners, software development, cybersecurity, accessibility leads and more. If internal practitioner capabilities are limited, include plans of any external expertise that will be commissioned.
The management case should also provide details of leadership teams or senior officers overseeing the project. Recognising digital leadership capability is a challenge for many councils, it may be beneficial to consider bringing in external expertise to support senior leaders with decision making. This support could take the form of an external expert on an Advisory board or investing in digital training for leaders, ensuring they are equipped to make informed decisions, resolve conflicts and champion the project’s success. Ultimately, strong leadership alongside practitioner skills can mitigate project risks and ensure long term strategic alignments and operational efficiency. The cost of these resources, including recruitment, training and consultancy fees should be factored into the financial appraisal earlier in the business case.
Tip
The LGA Cyber Digital Data and Technology capability framework for local government provides an overview of the skills needed for commissioning, designing, and delivering services. This can be a useful resource for assessing the council's current digital skills and articulate the types of capabilities that need to be recruited depending on the strategic objectives of the initiative.
Questions to consider
- What practitioner capabilities are required and what project management methodologies will be used?
- How will any gaps in practitioner capabilities be addressed (for example, retraining, recruitment, external consultants)?
- What specific roles are needed within the project team?
- How critical is leadership support for this project, and how will leadership development be supported, both within the project and across the organisation?
- How will knowledge transfer and long-term sustainability of both the solution and the team’s skills be ensured?
- If external expertise is required, what is the plan for integrating them into the team and ensure knowledge transfer to internal staff?
- Have the cost of all resources required been included in the financial appraisal of this business case?
Change management
For enabling investments, change management strategies and plans should be included. These should evaluate the impact of digital processes and services on staff, stakeholders, and service users. The plans should include clear communication strategies, training programmes, and ongoing support to help individuals adapt to new ways of working. Resistance to change should be anticipated and addressed proactively through open dialogue and collaborative problem-solving. By prioritising change management, councils can maximise long term benefits from digital investments.
Questions to consider
- What is the potential impact of the project on staff and service users?
- What communication and engagement strategies will be used?
- What training and support will be provided to facilitate adoption?
- How will resistance to change be addressed?
Appendix: resource bank
Examples of business cases and case studies from councils to help with your business case development.
| Brent Council |
Brent council’s outline business case for its 2022–2026 digital programme was developed to support the implementation of its digital strategy. Brent’s business case sets out its ambition to enable residents to access services more easily, unlock the digital potential of place, empower residents by running digital inclusion schemes, make better use of data to become a more ‘intelligent’ organisation and support the upskilling of the workplace by investing in training for staff.
The business case outlines the investment needed to develop the workforce capabilities alongside the technology investments needed to transform service delivery. The core capital investment required in the business case is £9.3 million. Total cumulative savings of £14.8 million are forecast after year 4, with an estimated recurring annual saving of £3.9 million after 3 years, based on new, enabling and efficiency savings. |
| Hillingdon Council |
Hillingdon Council published a new digital strategy in October 2024 which set out its ambition to become a digitally enabled, modern, well-run council, working with partners to improve the lives of all residents. To deliver the strategy, five programmes have been created:
The council has invested a £9 million capital programme budget which is expected to deliver a £4.2 million benefit for the council within a payback period of just over 2 years. Through this investment, the council is committed to creating a better digital experience for residents and provide staff with the modern tools needed to free up staff time so that more time is spent with residents who need support the most. |
| Somerset Council |
This business case by Somerset outlines the benefits of how investing in Modern and AI capabilities will enable the council to move from fragmented reporting and manual workarounds to an enterprise-wide capability that turns high-quality data into better decisions, enabling earlier interventions and faster services.
The business case proposes an investment figure of £1.561 million from flexible use of capital receipts to run a homelessness pilot and create single views of residents which can assist with planning, and earlier interventions.
It explains how, by testing the capabilities (data platform, and AI tools along with practitioner skills) this can enable the council to trial the solutions and build evidence for scaling these to other priority services.
This would overtime enable the council to realise its transformation ambitions to become a leaner, sustainable and resilient council that supports better community outcomes.
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| Nottingham City Council |
This case study by Nottingham City Council is an example of how the cost benefit ROI method can be used to calculate the socio-economic value of an investment.
Nottingham City Council were funded by the MHCLG’s) PropTech Innovation Fund, to integrate 2D and 3D geospatial data into their planning processes. The planning team subsequently calculated the benefits that can be realised by integrating this data.
The analysis revealed a benefit to cost ratio of 2:1 from a small subset of internal planning processes. This means that for every £1 of investment in the use cases quantified in the study, the LPA can expect to see a return of £2 in efficiency and monetary savings over a 10-year period.
The accompanying report provides a detailed summary of their approach. Read the full report. |
Get involved
If you have any business case templates or good practice examples on securing investment for digital technology, data and skills that you would like to share, please email [email protected]