Public investment proposals do not arrive at HM Treasury as informal memos. They must be submitted using the Five Case Model, a structured business case framework that breaks decisions into distinct tests of viability:
1. The Strategic Case: Does the project fit national policy objectives? This case establishes whether an intervention aligns with overarching priorities like legal climate targets or regional economic growth.
2. The Economic Case: Does the proposal represent genuine value for money for society? Analysts conduct rigorous cost-benefit analysis here, applying discounting rates to calculate the Net Present Social Value (NPSV) across decades.
3. The Commercial Case: Can the market deliver the proposed solution? This examines procurement routes, risk transfer, supply-chain capacity, and contract management structures.
4. The Financial Case: Is the project fully funded? This tests departmental balance sheets, tax revenue implications, and overall capital expenditure limits.
5. The Management Case: Can the sponsoring agency run the project successfully? It mandates milestones, risk registers, contingency budgets, and governance arrangements.
If a multi-million-pound proposal fails any single case, the Treasury spending team rejects it. This five-part discipline prevents sponsor departments from presenting technically brilliant engineering projects that fail commercially, or financially cheap projects that deliver negligible societal benefits.
