Capital Projects Process
Capital Projects Process
Annex 2
Concept Paper
1. The main features of the project will have been described in the Registration
document. The Concept Paper should complete the outline and draw attention to
any changes since Registration. The Concept should deal in sufficient detail
with the following to enable the PRC to decide whether or not to approve the
Concept:




The academic, business or administrative case.
Strategic fit.
Impact assessment and risks.
Funding, including the financial business plan.
This is the Business Case in outline, which will be incomplete if these four topics
are not addressed. Project Leaders will need advice and assistance in the
preparation of their Concepts to ensure that it meets the standard for signature.
It was suggested in the guidance on preparation of Registration that the
individuals who can assist in the preparation of the Concept should be
identified. This is particularly important for financial modelling, if external
professional assistance may be needed or if there are questions over methods of
procurement. The Head of PRAO or future signatories of the Concept Paper will
be able to advise on which of their staff should be consulted.
2. If the project at concept is substantially different1 from the Registered
project it may be viewed as a new project and the project leader should
consider a fresh Registration, with the necessary signatures, before
spending time on working up the Concept.
3. Approval of the Concept is not routine, but approval signals that approval at Full
Case will normally follow provided (a) the project and circumstances have not
substantially changed since Concept2 (b) key dependencies and other conditions
identified in the Concept have been satisfactorily addressed – usually the
availability of funding, sometimes the reduction of risk. Progression of a project
may remain conditional on consents other than those the PRC can provide and
processes outside the CPP: these may include Reports and Graces, planning
consents, funding approval etc. Preparation of a Concept requires a considerable
investment in time – and possibly some financial investment.
1
2
A proposal to implement in phases what was originally a single project may be a
substantial change, especially if funding has not been identified for all phases.
If a Full Case is not put forward within three years of the date of approval of a Concept
Paper the Project may be removed from the CPP list, unless a revised and updated
Concept Paper is submitted. Schools are expected to review progress annually on all
Capital Projects as a routine part of their planning round.
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Capital Projects Process
4. The Concept will describe any alternative options identified at Registration that
would each deliver the project and will show the evidence supporting the
preferred option – perhaps an investment appraisal. The single or preferred
option will be supported by the business case. The PRC should not normally be
asked to choose between options.
5. The financial elements of the business case may be presented in summary, but
will be based on more detailed workings which should be available. The details
of the business plan, revised and updated, will be included in the Full Case to
provide the reference point for future review.
6. A complete Concept paper includes a signed cover sheet, similar to that used for
Registration, and completed risk management forms. Blank cover sheet and risk
management forms are provided below. The risks will be re-assessed for the Full
Case.
The Academic, Business or Administrative Case
7. The reasons for the project and its benefits will have been covered in outline in
the Registration paper but should now be expanded and will include an
explanation if there has been any change of direction of the project since
registration. Any conditions of Registration approval will have to be shown to be
met in the Concept. Account will need to be taken of the advice of the Space
Management Advisory Group and the Buildings Committee for construction
projects.
Strategic context, objectives, drivers for change
8. The project should be shown to be consistent with overall strategy, how it furthers
the aims of the University and fits within the objectives, goals and priorities of the
sponsors and School/Institution or how it will fulfil a specific plan. A description
should be provided of the departmental/institutional and University context, and of
the external context if the project is significant at regional, national or international
levels. Supporting documents may be attached as annexes.
9. In particular this section should provide the PRC with answers to the following:

Why is the project necessary and what need is being satisfied? What problem
is being solved?

How urgent is it? Why is it necessary now?

What is the demand?

What academic and other benefits will follow? When? Who to?
Option appraisal
10. Where there are alternative options, the PRC expect them to be considered and
evaluated. “Options” are not variations of a theme but distinctly different
solutions with different cost profiles. Assistance with option development and
costing can be provided. A preferred option should be identified and the
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Capital Projects Process
business plan built around it. An investment appraisal is likely to be needed for
each of the options.
Financial summary or business plan
11. The detail of the business plan will depend on the nature of the project, but there
are some common features. Financial years are academical years. The first
year of the business plan will be the year in which expenditure is first incurred,
which may be the year in which the Concept is developed. The last year will be
after the development phase when the project has entered a steady state. For
example, for a building, that may be when it is fully occupied and commissioned.
For a construction project to house a new activity, when that activity has been
built up to its intended level. The plan will show:

Project development costs

Furnishing, equipment and removal costs

Capital expenditure phased over an appropriate period

Recurrent costs, including an assessment of indirect costs

Capital funding

Recurrent income and any other funding
12. Some income and costs may not be new, being transferred from elsewhere (if an
existing activity moves into a new building, for example). The project may
generate savings, or may generate new costs not covered by new income. They
should be assessed. The result should be a clear picture of the capital required
including the cost of furniture and equipment, the full economic recurrent cost,
how those costs would be met and the financial implications for the University of
proceeding with the project.
13. Advice on the calculation of those costs and income is not part of this guidance
because of the variety of approaches required for different projects and the ready
availability of up-to-date and expert advice from officers. The sources of that
advice should be available from within the team already identified by Project
Leaders (see paragraph 1 above) but the Head of the Planning and Resource
Allocation Office may be consulted in any case of doubt.
14. The scope of the financial summary will depend on the nature of the Capital
Project. The guidance in the CPP is therefore not prescriptive. The CPP itself
does not require any particular financial target to be met, such as recovering
costs over a period, but any targets set by another authority for the project,
perhaps at Registration stage, should be explained and the summary should set
out the extent to which they will be met.
15. Concept Papers should not be put forward without indicating sources of capital
funding and how recurrent costs would be met, but it is not necessary at this
stage to have secured the funding; securing it may be a key dependency. The
risk of not securing it will need to be assessed.
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Capital Projects Process
16. Submissions are not bids for funds, unless bids have been invited. There should
therefore be no assumption that additional capital or recurrent costs will be met
from current University or public funds, or from future fundraising, unless it can be
substantiated. Assumptions need to be fully supported if authority to proceed is
to be given. Although the University has a capital fund, it is expected that
departments will normally contribute at least 15% of the total construction project
cost (including fees) from fund raising or other sources. The concept paper
should clearly show how much the department believes it is able to contribute
and an appropriate level of contribution will be determined by PRC.
17. Some questions may need to be addressed, eg:



If income is projected to exceed expenditure what will the surplus be used
for?
If the projected income is not sufficient to meet expenditure in any year, how
will the balance be made up? Does income lag behind expenditure? Will
they catch up, and when?
If other activities are to be discontinued or reduced, eg by the disposal of
surplus space or employing fewer staff, will there be a transfer of funding
reducing the need to find new income? If the project was not pursued, would
the income still be available and what else might be done with it?
Sensitivity
18. Estimates and forecasts must be to a reasonable degree of accuracy, but
uncertainties should be stated and, where possible, the financial effect quantified.
Consortia
19. The project may be on behalf of a consortium and, if so, the consortium will wish
to ensure the Concept paper describes how costs and income will be shared. If
the consortium includes institutions outside the University, evidence must be
provided that those institutions support the Concept paper.
Consequential changes
20. Direct consequences that (for example) liberate space or funding to be recycled
in the project will need to be described as part of the supporting case, but the
project may create opportunities that are beyond the responsibility of the Project
Sponsor to describe. Nevertheless, other opportunities created by the project
may help approval and the Project Sponsor, if suspecting that such a case could
be made, should identify the possibility and indicate who may be able to provide
further information. If, for example, opportunities are opened up elsewhere in a
School, School officers may wish to give some detail when indicating School
support.
Carbon and sustainability
21. The paper should set out the likely impact of the project on the University’s
carbon emissions including how the project will contribute to the aspiration to
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Capital Projects Process
substantially reduce the overall level of emissions. Costs associated with carbon
reduction/ efficient use of energy should be regarded as part of the overall cost of
the project.
Main assumptions, dependencies and key risks
22. The main assumptions and dependencies should have been identified in the
description of the project. They should be summarised at the end. The following
questions provide a checklist, but the list is not complete:

Does this project make any broad assumptions which need to be fulfilled,
such as the acquisition of land, planning permission, donations?

What must be in place before the project can progress? Such as funding,
people, Reports, legislation, planning approval. Which of these are in control
of the University, and which are not?

What effect will there be on staff and student numbers? What implications are
there for the estate? Are any further developments contingent of the
successful implementation of this project (eg by the release of space, or a
phase 2)? How are these issues to be addressed? When and who by?
(If the Registration identified confidential matters (such as staff issues) which
were unresolved and are still not resolved as the Concept is being developed,
the risk may be too high for project approval until they are resolved.)

What are the key risks of the project, and how great are they? An attempt
should be made to examine every aspect and stage of the project to ask what
could go wrong, the prospect of it doing so, and what would have to be done
to cope with it or put it right (and at what cost). Examples of risks include: (a)
actual figures vary so much from planning assumptions that the viability of the
project is affected (e.g. student numbers or market salaries are much higher);
(b) circumstances change to reduce the need (e.g. a competitor institution
implements identical plans); (c) conditions of planning permission or Section
106 requirements altering the scale or design of the building, or refusal of
permission or objections; (d) promised funding is not forthcoming or specialist
staff are not available; (e) the project fails because promised external interest
does not materialise (e.g. it fails to attract research grants); (f) external
interest and demand is far greater than can be coped with. Advice on
assessing these risks is available from officers.

What is the timetable for submission of the Full Case, any necessary Reports,
the granting of other permissions, and (assuming approvals) of project
implementation and completion?
Measuring achievement
23. Project Leaders will have identified the key project objectives when the Project
was Registered. These and the business plan will be used in due course to
assess whether or not there has been successful delivery of the project. Project
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Capital Projects Process
leaders may wish to include any other indicators and decide how the project
should be evaluated and when.
Next steps
24. Assuming approval of the Concept, costs may be incurred in the preparation of
the Full Case, usually associated with the need to employ external consultants.
The Project Leader and Sponsor must have established a good estimate of those
costs and the Project Leader must include an estimate at the end of the Concept
Paper.
25. If PRC approves the concept paper, costs of future development may be
regarded as an eligible charge on the capital fund, subject to the funding
agreement and donation/contribution tariff set by PRC, depending on the
strategic importance of the project.
26. The Concept Paper must then set out the timetable for further work, how it will be
achieved and who by.
27. Approval of the Concept may be followed by publication of a First Report; further
work may be conditional on the Grace.
The Concept Paper must conclude with clear, complete and unambiguous
recommendations to the Planning and Resources Committee.
28. Concept Papers should be sent to: capitalplanning@admin.cam.ac.uk.
PRAO
02 March 2016
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Capital Projects Process
University of Cambridge: Planning and Resources Committee
Capital Projects Process:
Concept Paper
Project Name
CPP file reference
Project ID
Project Leader
Department / School /
Institution
Project Sponsor
(Typically Head of
Department)
Project Champion
(Typically Head of School)
Estimated capital cost of
project
Name & Title
Position
Of which the completed project will be a part
Name & Title
Position
Name & Title
Position
£m
I approve the recommendations set out in this Concept Paper:
Project Leader
Signature:
Date
Project Sponsor
Signature:
Date
Project Champion
Signature:
Date
Head of School (if not
included above)
Signature:
Date
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Capital Projects Process
RM1 (Risk Management 1)
RISK MANAGEMENT FORM
REFERENCE Completed by:
Item:
Risks identified/What can go wrong?
List what the risk is under categories such as:
Reputation, Governance, Finance, Operational (staff, compliance, estates)
What are the possible consequences if the risk were to emerge?
1.
2.
3.
4.
5.
What is the predicted severity of
the risk? (Scale 1 –5, see Impact
Guide)
What is the predicted likelihood of the
risk? (Scale 1 – 5, see Impact Guide)
What is the total risk score?
(severity x likelihood, Scale 0 –
25)
What actions could be taken to reduce the likelihood and severity of the risk to an acceptable level?
1.
2.
3.
4.
5.
What risk indicators could be used to monitor the risk? (These provide early warning, minimum of 3)
1.
2.
3.
4.
5.
Recommendation:
Signature:
Date:
Guidance on risk management can be found on the Risk Management website
(http://www.admin.cam.ac.uk/offices/secretariat/risk/)
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uk/offices/secretariat/risk/)