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OPTION APPRAISAL
BUILDING OUR FUTURE: SCOTLAND'S SCHOOL ESTATE
1: INTRODUCTION
1. Building our Future: Scotland's School Estate, 1 sets out the role of school estate management plans in delivering our vision and objectives for a school estate that supports better public services. These plans are a core plank in the implementation of the school estate strategy.
2. This guidance on option appraisal should be read in conjunction with the strategy and guidance on School Estate Management Plans. 2 It provides advice on how to carry out an assessment of investment options, particularly under step 3 of the school estate management plans.
3. The high levels of investment associated with the school estate management planning process emphasise the need for capital planning decisions to be underpinned by rigorous, consistent, yet proportionate, appraisals. These should help ensure that funds are committed to the projects which will make the most contribution towards objectives for the school estate.
4. This guidance on option appraisal provides a good practice framework to assist local authorities to appraise school capital investment and select the option which will best meet objectives.
WHAT IS OPTION APPRAISAL?
5. Option appraisal is a technique for setting objectives, creating and reviewing options and analysing their relative costs and benefits. Option appraisal should help develop a value for money solution that meets the objectives of the project.
6. The Green Book3 (2003), provides best practice guidance on option appraisal. It suggests that option appraisal should take place wherever practical, but also that it should be proportionate to the proposals in question. This guidance is consistent with the principles and approaches of the Green Book. The Green Book, or appropriate professionals, should be consulted for more detailed information on any part of the appraisal process.
7. An effective option appraisal should help answer the following questions:
- have you taken into account all relevant factors in deciding what the project should be?
- should you go ahead with the project?
- which is the best way to carry out the project?
8. All decisions are based on some form of option appraisal. In small projects, you might consider options informally and make a decision based on intuition and judgement. For larger capital projects, you may already have a detailed appraisal process. This guidance should help you to use the most appropriate appraisal process for each capital project.
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