Chapter 19. Benefits management

As shown in Figure 19.1, benefits are the link between how the outcomes and objectives agreed for the work are delivered in terms of specific positive impacts, and how those benefits link to specific outcomes and outputs delivered by the solution. 

It should be possible to trace from any objective down to the benefits that deliver it, and from any benefit back up to the objective it supports, known as two-way traceability. This can be achieved by developing a benefits map showing the relationship between objectives, requirements, solution/ outputs, outcomes and benefits. Mapping should start from objectives and add detail progressively as benefits are identified, solution options are defined, and solutions are chosen. Once approved, traceability management should be used to maintain alignment between the benefits map and other products.

Where policy proposals have been developed using a specific theory of change (see Chapter 2: Policy and evaluation), this should provide the initial basis for considering objectives and outcomes, and how these might map to benefits. In government, benefits, like costs, are viewed from the perspective of UK society as a whole in making decisions on investment. This means that, while it is important to understand different stakeholder perspectives, outcomes and benefits should be framed primarily in terms of how they deliver social value through the delivery of government objectives, as defined in the Green Book (requires sign in).

Various tools are available to aid benefits mapping, for example benefits tree analysis and logic models. See the Government Project Delivery Benefits management in government collection (requires sign in) for templates. 

Benefits can take many forms and are not always straightforward to identify. Starting from the proposed objectives and outcomes, and exploring what these mean in practice with different groups of stakeholders, should help identify the primary benefits to be included in planning and investment appraisal. However, benefits can be identified at any point in the life cycle, and some might emerge unexpectedly when delivering the work or operating the solution. Emergent benefits are managed as issues (see Chapter 21: Issue management).

The Green Book (requires sign in) sets out how to categorise and assess different kinds of benefit consistently in terms of social value, viewed from the perspective of UK society as a whole. This guidance should be followed for all investment appraisal, review and evaluation.

Changes delivered by a project or programme can have positive or negative impacts.

Positive impacts are called social benefits. Negative impacts are called social costs.

Social benefits and social costs are either:

• monetisable, which can be expressed in financial terms
• unmonetisable, which cannot be expressed in financial terms

Monetisable social benefits and social costs can be either:

• cash, affecting the income or spending of a public body
• non-cash, which does not affect the income or spending of a public body, for example, changes in greenhouse gas emissions

Unmonetisable benefits and costs can be either:

• quantitative, which can be expressed in numbers
• qualitative

Each social cost or social benefit can typically be attributed to one of 5 groups:

• the public body that is developing the proposal
• other public bodies
• households and individuals
• businesses
• other non-government organisations such as charities

Investment appraisal and prioritisation is based on social value, the net sum of benefits and costs to society of a proposal.

In programmes and projects, the Green Book (requires sign in) sets out how to assess social benefits and social costs for this purpose providing a consistent and transparent basis for assessing the social value of an intervention. Investment analysis assesses the social benefits and social costs for each option under consideration. Options are then prioritised to identify a preferred solution that meets the objectives of the work at an acceptable level of risk. 

In a portfolio, investment analysis assesses and prioritises programmes, projects and other related work to identify the optimal balance of work to meet its objectives and social value. 

In either case, prioritisation is rarely a simple matter of ranking. For example,

• a higher cost intervention may deliver more benefit and a higher net social value but might not be affordable
• a lower cost intervention may deliver less social benefit but make an important contribution to a strategic objective

This is why it is important to quantify benefits where possible and include unquantified benefits in investment appraisal.

Effective prioritisation depends on robust estimation. Benefits can be over-estimated or prove harder to achieve than expected. Care should be taken to ensure that benefits are realistic and achievable with dependencies identified, particularly if these incur cost. 

Benefits assessment is typically progressive and iterative. Uncertainty should be reflected in how benefits are presented and reduced as options and assumptions become more defined.

If benefits are hard to quantify, or there is significant uncertainty, priority should be given to those likely to be decisive in determining the differences between options.

The same disciplines used for accurate cost estimation (see Chapter 16: Planning) should be applied equally to benefits. These include:

• use of evidence and benchmarking
• sensitivity and scenario analysis
• probabilistic estimation
• use of confidence factors and ranges

The period over which benefits are to be realised affects how they are valued for investment appraisal and then for managing their realisation. Planning should cover the whole life of the solution, including its use and disposal. 

Some benefits can often be realised during the work itself. This is particularly the case in iterative and incremental work, where solution components are developed and transitioned into use on a progressive basis. Even where work is predictive and highly linear, however, benefits can often be generated by the work itself, for example, in terms of community involvement, digital or industry innovation, archaeological work or environmental interventions.

Even when realised over a limited period, transient benefits should be identified and included in planning, and managed in the same way as other benefits, with the value generated recorded when they conclude.   

Most benefits are usually only realised when the solution is fully in place, and accrue as the solution is used over time. The Green Book (requires sign in) sets out standard time horizon for benefits realisation for different types of asset or service. These should be used for investment planning unless agreed otherwise with HM Treasury, and maintained through realisation and review.

Portfolio planning typically aligns to spending review and annual business planning cycles, with benefits identified and tracked over the relevant cycle. Realistic scheduling is needed, for example, benefits profiled with common dependencies or to the end of a spending cycle carry cumulative slippage risks. Appropriate provision for risk and uncertainty particularly supports effective benefits management in portfolios.    

Benefits and their social value can be highly impacted by socio-economic changes and shifts in service demand and people’s behaviours. These are often hard to plan for but should be considered in identifying and assessing benefits as part of investment appraisal and decision-making.  Modelling and sensitivity analysis should be used to identify possible scenarios and assess the robustness of benefits assumptions against them. Probabilistic estimation helps establish the range of benefits assumptions and set realistic benefits targets. Critical dependencies and risks should also be identified and factored into the analysis. 

Where uncertainty is high, an incremental or modular approach to development and implementation can help maximise benefits and social value. Work delivering a wider range of benefits is also less likely to be vulnerable to sudden shifts in stakeholder behaviour.  

If significant changes arise which mean that benefits assumptions are no longer valid, the impact should be assessed and managed through change control. If changes mean that work is no longer likely to realise sufficient benefits to justify continued investment, the work should be terminated. See also Chapter 22: Change Control.

Benefits management and evaluation are complementary practices with a shared focus on assessing the impacts of a portfolio, programme or project and whether its planned outcomes and objectives have been met.

Some benefits are difficult to measure directly. Wider economic, environmental and social benefits are difficult to assess because it can be hard to separate the effects of changes from other external factors, such as transport overcrowding can be hard to measure in isolation.

Evaluation can help by providing a counterfactual view, a comparison of what happened against what would have happened without the intervention, which draws on the theory of change for the work (see Chapter 2: Policy and evaluation). 

Equally, evaluation can draw on benefits assessment, realisation and review data as supporting evidence for an evaluation. Benefits and evaluation teams should work together throughout the life cycle so that benefits data informs evaluation and evaluation findings strengthen benefits management.

All proposals for change should have a clear rationale and objectives, together with a supporting theory of change, as set out in the Green Book (requires sign in). These should normally be set out as part of the policy proposal or initial brief for the work and are the starting point in preparing to manage benefits.

If these things are not clear, it’s important to clarify these as soon as possible with the policy owner or whoever has commissioned the work.

Even where the brief is clear it is still important to check stakeholder expectations on outcomes and benefits. For example, is the work expected to deliver the whole of an objective or to contribute to it alongside other work? Is there a shared view across stakeholders, or are there different expectations and perspectives on what a successful outcome would be that may need to be balanced?

Where multiple interventions contribute to a wider objective or outcome, for example in a portfolio or programme, it is also important to understand how other work contributes and when, including any dependencies between them. How those benefits are to be framed and managed also needs to fit into this wider picture, so that the benefits management framework can be designed to support efficient management and reporting. Exploring these questions at the outset, before work on benefits management begins, can save time and avoid misunderstandings.

The benefits management framework describes how benefits management is to be conducted through the life cycle. The framework should be tailored to the nature, scale and complexity of the work, and should be compatible with any relevant frameworks at organisation, portfolio or programme level, and with requirements in the Green Book (requires sign in) on benefits in business case development and investment appraisal. The benefits management framework should include: 

• accountability and responsibility for benefits management and realisation, ownership and approval 
• arrangements for identification, assessment, planning, management, monitoring and reporting, and for review and evaluation.
• how benefits are to be identified, categorised and, wherever possible, quantified (see19.6.3.4 on identifying and categorising a benefit)
• the data needed for overseeing benefits management and realisation, and how it is to be collected, recorded, and stored, including any specific software or tools to be used in doing so (see Chapter 24: Information and data management)

Benefits management is a critical part of controlling a portfolio, programme or project. It needs a systematic approach, sustained through the life cycle, to enable and optimise delivery of outcomes, benefits and objectives. The key activities required for effective benefits management are shown below, and can be sequential or iterative, depending on the nature of the work.

Benefits management starts with activities to ensure that there is a shared view of the objectives of the change, why it is needed or desirable, and the outcomes expected,  

This normally involves the benefits manager working with stakeholders to understand: 

• the policy concept and reasons (drivers) for the proposed change 

• the objectives and outcomes for the work 

• what success would look like 

• what positive impacts might result from the changes and who might benefit

This can be set out as a simple logic map showing how these elements link together providing the basis for developing the benefits management framework (see 19.6.3.4 on overseeing benefits management) and identifying benefits (see 19.6.3.5 on identifying and categorising benefits).   

A template benefits management framework is available in the Benefits management in government collection (requires sign in). 

The approach to benefits management should be defined including any processes, methods, tools and techniques to be used. This forms part of the overall governance and management framework for the work (see Chapter 4: Governance and management). The important aspects of this activity are discussed in more detail in 19.6.2.2 on establishing the benefits management framework, and should be agreed at the start of the work in line with the organisational framework. The framework should be maintained to address relevant feedback from its use.

The focus for the benefits manager is to bring together the information and reports from the individual benefits owners and assess how they contribute to the achievement of the objectives, report on them (as appropriate) and, when necessary, take preventive or corrective action. 

The benefits manager should ensure that benefits management is carried out in accordance with the benefits management framework and fulfils its purpose. This includes overseeing:

• benefits identification, including management of the benefits register
• benefits planning and prioritisation as part of investment appraisal
• benefits realisation activities, including identification and handover to benefits owners
• ensuring benefits reporting and review, including interaction with evaluation work 

The benefits management framework should be kept under review, taking account of any changes in the context and nature of the work, to ensure that it remains effective through the life cycle or (in the case of a portfolio) in preparing for the next planning cycle.

Benefits should be identified as early as possible, ideally starting as part of initial policy formulation, and considered further during work on feasibility. Identification should start from the objectives, drivers and outcomes for the work, and what this might look like in terms of critical success factors and potential benefits. These are then explored further with stakeholders to identify and define a fuller range of benefits, set out as a benefits map. Identification can also occur from identifying social value delivered from contracts over and above the core deliverables in compliance with the Public Services (Social Value) Act 2012  (see Chapter 25: Procurement and contract management for more information).

Various techniques can be used for this, including formal and informal workshops, user research and various benefit mapping techniques. More information is set out in Government Project Delivery’s Practitioner workbook: Benefits management in government (requires sign in). Wherever possible, benefits should be described at a level of detail where they can be managed effectively and assigned to a single owner. 

Each benefit should be categorised. For business case purposes, this should follow the classifications in the Green Book (requires sign in) for example as monetisable and cash-releasing or not, or as non-monetisable, either quantitative or qualitative. Benefits can also be categorised in other ways for organisational planning, analysis and reporting, for example using strategic objectives or themes relevant to the organisation.   

Each benefit should be captured in the benefits register, with its categorisation, proposed measure and potential benefit owner. The current performance level for each benefit should be established before work starts, and captured on the benefits register, providing the baseline for measuring benefits realisation. Other information can be added progressively to the benefits register, which should be kept updated as decisions on solution options are taken, benefits targets are set and benefits ownership assigned.

To model a benefit fully, assumptions need to be made on when benefits start to be realised and over what period they are expected to accrue. This needs to take into account other planning assumptions. In programmes and projects, modelling should consider the range of feasible solution options for shortlisting, and is usually iterative, developing as more planning information becomes available.

A template benefits map and benefits register is available in the Benefits management in government collection (requires sign in).  

Benefits appraisal requires each benefit to be valued, using monetisable terms if possible and other measures where not (see 19.6.1.3 on assessing and prioritising benefits). The value of a benefit should be calculated for the expected realisation period, using the measures identified, to forecast the scale of the impact of the benefit. A forecast should be developed with, and agreed by, each benefits owner, with measures, baselines, targets and timescales, assumptions, dependencies and risks documented alongside, creating a benefit profile for each benefit.   

In a portfolio, the appraisal of a benefit is usually conducted as part of cyclical investment planning and prioritisation, and is typically high level, drawing on benefits forecasts provided by programme and project teams. If the appraisal is for spending review purposes, HM Treasury issues guidance on the approach to social benefit appraisal and the methods to be used. For annual planning cycles, benefits appraisal should be tailored to organisational objectives, for example to prioritise certain categories or classes of benefit within the portfolio.

In a programme or project, benefits appraisal is focused primarily on shortlisted options to support identification of a preferred option for the solution (as opposed to longlisting which assess feasibility against critical success factors). As such, it forms an important part of the economic case in the outline business case or programme business case, and should be closely integrated with wider planning and business case development.  

For business case appraisal, social benefits should be presented for each shortlisted option, alongside the related social costs, so that the social value of each option can be appraised as part of the economic case, as set out in the Green Book (requires sign in). Carbon emissions and other environmental impacts, for example biodiversity, should be clearly shown in line with statutory and other government requirements (see Chapter 6: Environment and sustainability). Cash-releasing benefits should be also included in the financial case as negative financial costs. Assumptions, dependencies and risks should also be identified. 

Benefits estimates and assumptions should be kept under review to ensure that they remain current. Forecasts and targets should be reconfirmed or adjusted before submitting a full business case or an updated programme business case. Once approval has been given, these provide the baseline for tracking benefits realisation and for evaluation.

Once decisions on investment have been taken, the plan for realising each benefit should be developed. The benefits owner should be reconfirmed at the start of planning for realisation and should be involved in developing the plan. This should be documented progressively in a benefit realisation plan which should form part of the overall plan for the work (see Chapter 16: Planning).

The benefits realisation plan should set out the planned realisation profile for each benefit, identifying the work component(s) and change activities needed to enable this, and when these are scheduled to take place. It should also show the expected trajectory from baseline to target and key benefit realisation milestones, and include the baseline, measures, assumptions, dependencies and risks for each benefit. Intermediate benefits should also be identified, to ensure that these are given the attention needed, as dependencies for longer term benefits.  

Benefits realisation activities for each benefit should be scheduled in line with the benefits realisation plan and are typically integrated as part of implementation, business change and operational activities as the solution transitions into use. Activities should be owned and overseen by the relevant benefit owners, who are also responsible for reporting on progress through the designated benefits manager or reporting manager. Communication and engagement of affected stakeholders is also critical for effective benefits realisation and should be given particular attention (see Chapter 35: Management of organisational and societal change).

The realisation of a benefit can take place during development and implementation of the solution but usually also requires continuing action when the solution is in operational use, for instance to embed change, grow user numbers, manage employee changes, close obsolete systems or facilities, or dispose of surplus estate. Provision for this should be included in planning, and care taken to ensure that benefits ownership, realisation and reporting responsibilities are fully handed over as part of transition, if not earlier, before the work itself closes.  

Progress on realising each benefit should be monitored and reported against agreed metrics at agreed frequency, depending on the nature of the benefit, how quickly it accrues and how easy it is to measure. This should be integrated as part of wider benefits management and reporting wherever possible, ideally at organisational and portfolio level. If a benefit forecast is not being met, the reasons for this should be analysed and action taken to address them. The benefits register, maps and profiles should be maintained and updated throughout realisation, as primary information sources for monitoring, reporting and review.   

Review is concerned with understanding the extent to which a benefit is being realised and the impact that is having on the achievement of the objectives. Such reviews can also contribute to policy evaluation and learning from experience to improve future delivery.

In a portfolio, periodic review of benefits should be part of the portfolio management cycle and should inform cyclical planning.

In a programme or project, progress on the realisation of each benefit should be reviewed before programme or project closure to inform the closure report. This review is typically conducted as part of the operational and benefits assurance review (see Assurance of benefits realisation in major projects).

Further reviews can be undertaken after closure and arrangements should be agreed with the sponsoring body as to what is required, when and by whom. This can be through:

• additional assurance reviews 
• as part of evaluation (see Chapter 2: Policy and evaluation)
• a formal Post-Implementation Review (PIR), if required (see the supplementary guidance to the Magenta Book (requires sign in))

A benefit should be closed by agreement between the benefits manager and benefit owner once it has been realised sufficiently to demonstrate that continued monitoring is no longer needed. Note that a benefit is not closed simply because the associated work is completed. A benefit often needs to be monitored through the life of the solution, sometimes over long periods as part of agreed evaluation requirements. Some benefits can therefore remain open throughout the life of the solution or service through to disposal, and arrangements for this should be agreed and maintained by the sponsoring organisation.

When a benefit is closed, the benefits register should be updated to record the actual benefits realised, the basis for closure, date and who made the decision. Closed benefits should be kept on the register, together with this information, as it is important for maintaining traceability (see Chapter 23: Traceability management) and for longer term review, evaluation and audit purposes.

Once benefits no longer need managing, the benefits register should be closed. The benefits management framework should be merged into the management framework for use of the solution or closed. Information and data should be retained in accordance with the delivery and sponsoring body’s information retention policy.