Business Plan Template for Operations

Transcription

1 Business Plan Template for Operations Outline Guidance on Requirements for WEFO Assessment Page 1 of 27

2 Background Information for Applicants Please note: Key terms that have associated glossary definitions are in italics. All applicants must have completed and submitted an Operation Logic Table to WEFO and have subsequently been invited into the Business Planning stage of appraisal before commencing the completion of this template. This business plan template is intended to guide applicants on the content that WEFO will need for assessment purposes. It is to be competed alongside the Selection of Operations Guidance for Applicants Part 2: The Business Planning Stage. If a sponsor already has a completed business plan or business case for their operation (project), they are welcome to submit that provided it: Is clear and succinct; Covers adequately all of the information included in this framework; Is annotated, if necessary, to enable WEFO to easily identify the information they are seeking for assessment purposes. Please note that this business plan template is structured in sections that reflect the selection criteria for the selection of operations (projects). The completion of this business plan template is an iterative process. Applicants will be guided by their lead WEFO officer as to when to complete each section in preparation for formal assessment against each of the nine selection criteria. The core criteria of Strategic Fit, Delivery and Financial & Compliance under sections 1, 2 & 3 should be completed initially as these will be the first selection criteria to be assessed within the Business Planning appraisal process. Section 1 covers the core criterion of Strategic Fit, followed by the further strategic criteria of Cross Cutting Themes and Suitability of Investment. These further criteria seek to build on the evidence first provided under Strategic Fit and should be completed when advised by the WEFO officer. Page 2 of 27

3 Section 2 covers the core criterion of Delivery, followed by the further delivery related criteria of Management of Operation and Indicators & Outcomes. These further criteria seek to build on the evidence first provided under Delivery and should be completed when advised by the WEFO officer. Section 3 covers the core criterion of Financial & Compliance, followed by the further financial related criteria of Value for Money and Long Term Sustainability. These further criteria seek to build on the evidence first provided under Financial & Compliance and should be completed when advised by the WEFO officer. Any necessary annexes should be attached and fully cross referenced under the relevant sections. The Executive Summary should then be the last section completed. For further details of the business plan appraisal process, please refer to the Selection of Operations Guidance Part 2: The Business Planning Stage. Please choose your evidence wisely remembering that if plans are unnecessarily long or complicated important issues may be missed. This may cause repeated requests for more or clearer information. Freedom of Information Act: Information for Applicants Please note that the Welsh Government, like all other public bodies in Wales and England, is under a statutory obligation, imposed by the Freedom of Information Act 2000 (the FOI Act ), to disclose information to any person who asks for it, unless it can lawfully withhold that information in accordance with the provisions of the Act. The FOI Act makes no distinction between information generated by an organisation and information provided by third parties. In general terms the provisions of the FOI Act apply equally to both, so if information is held by a public authority regardless of where the information originated, that information will be caught by the provisions of the FOI Act and will need to be assessed for disclosure. The only difference in the handling of third party information is the need to consult the third party prior to release to establish what concerns they may have about disclosure. This does not confer upon the third party a right of veto over disclosure, it is Page 3 of 27

4 simply an information gathering exercise so that any third party concerns are taken into account when the public authority dealing with the requests makes their final decisions on disclosure. Page 4 of 27

5 Suggested Contents i. Name of Operation & Applying Organisation (replace title page) ii. Section 1 Section 2 Section 3 Section 4 Section 5 Executive Summary Core Criterion: Strategic Fit Further Strategic Criterion: Cross Cutting Themes Further Strategic Criterion: Suitability of Investment Core Criterion: Delivery Further Delivery Criterion: Indicators & Outcomes Further Delivery Criterion: Management of Operation Core Criterion: Financial & Compliance Further Financial Criterion: Value for Money Further Financial Criterion: Long Term Sustainability Glossary of terms Annexes Page 5 of 27

6 Executive Summary Construct this section in order to summarise the key points that will be detailed in each of the other sections. This section should clearly set out at a high level what the operation will achieve against the EU Structural Fund programmes and how it will be delivered. This summary should read easily in a clear narrative using plain English. You should be succinct and explain clearly any concepts not in common use. You should avoid repetition, lengthy descriptive passages and minimise the use of technical language and jargon. You should include: The EU Structural Funds programme you are seeking funds from, along with the specific objectives that the operation will contribute towards. A description of the operation (project), including the change sought through the operation and the activities needed to achieve it. a brief outline of how the operation will be managed and delivered [its operational strategy]. what the targets/outcomes and results will be. what staff will be involved in the operation and what they will do. highlight key barriers & risks. provide only the headline detail on the operation costs and cofinancing package including the grant requested. Page 6 of 27

7 Section 1 Core Criterion: Strategic Fit In this section please clearly describe how the operation will contribute towards the specific objectives of the EU Structural Funds. The draft Operational Programmes can be found here. Where the operation sits within the wider investment context of Wales should also be explained. The Economic Prioritisation Framework (EPF) sets out the ten identified economic opportunities (both thematic and regional) within Wales. Applicants should explain how the operation will align with the identified demand drivers, as well as add value to and not duplicate the already existing and planned future provision in their thematic and/or regional area of activity. The EPF document can be found here. Any intention or potential for integration across EU funds should be detailed. As well as the Structural Funds, opportunities for integration should be explored with the Rural & Fisheries programmes, the Interreg Cross Border Ireland Wales and transnational programmes and other European initiatives such as the Horizon 2020 and LIFE + programmes. Operations could also potentially be combined with Financial Instruments. Details should also be provided of all engagement to date with potential partners and stakeholders. You will need to cover: Clearly demonstrate an alignment with the targeting principles and specific objectives listed under the relevant EU Programme & Priority. How will the operation: - Contribute towards delivering transformational change in at least one of the 10 economic opportunities identified in the EPF; - Respond to the demand drivers described under the relevant economic opportunities in the EPF; - Add value to and not duplicate the existing expertise and capability described under the relevant economic opportunities in the EPF. Page 7 of 27

8 Clearly demonstrate an alignment with the relevant Welsh Government policies. Provide an outline of how the operation intends to contribute towards the Cross Cutting Themes (CCTs) of Equal Opportunities, Environmental Sustainability and Tackling Poverty. Cross cutting theme guidance and best practice factsheets can be found here. Detail any planned or potential integration with other European Structural & Investment (ESI) funding programmes, such as ERDF, ESF, EAFRD (Rural Development) or EMFF (Fisheries Fund). Detail any planned or potential integration with Financial Instruments or other EU funding streams such as the Interreg Cross Border, Transnational and Interregional programmes, or the Horizon 2020 or LIFE+ programmes. Further details on the other EU programmes available can be found here. Detail any planned or potential transnational activity within the operation. Provide details of all partner and stakeholder engagement, including how this has helped shape the proposal. A list of all individual stakeholders contacted should be provided, along with evidence of the level of support (for example, via written correspondence). Page 8 of 27

9 Further Strategic Criterion: Cross Cutting Themes In this section, please provide detailed information as to how the operation will meet the legal requirements around the Cross Cutting Themes of Equal Opportunities, Sustainable Development and Tackling Poverty. In addition, precise details on how the operation will maximise its contribution to the Cross Cutting Themes must be provided. The Cross Cutting Themes Guidance documents can provide the initial information needed to draft this section. You will need to cover: Describe in detail how the operation will fulfil its statutory obligations under all legislation relating to the Cross Cutting Themes. Describe in detail how the operation will align with and support all relevant policies and strategies relating to the Cross Cutting Themes. Describe in detail how the operation will maximise its potential to contribute towards the CCT objectives, indicators and associated targets. Provide detailed and specific evidence of how the identified CCT indicators and associated targets will be delivered, when and by whom. A specific staff member will need to be identified as being responsible for the implementation and monitoring of the CCTs. This information should be cross-referenced with the general indicator information provided under the Indicators & Outcomes criterion. Page 9 of 27

10 Further Strategic Criterion: Suitability of Investment In this section you will need to provide detailed evidence of the need / demand for the proposed operation. In what way is the operation responding to market failure or gaps in provision for the specific sectors or participant group targeted? Can you evidence a good understanding of the barriers faced by the target sectors and/or participants and explain in detail how this operation will overcome these? You will need to cover: The need of the operation, in terms of: o Define the target participants and/or sectors; o Define the barriers facing the identified participants and/or sectors; o Explain how the operation will overcome these barriers and ultimately benefit the identified participants and/or sectors; o Demonstrate that these activities are not provided by existing or planned public or third sector support; o Demonstrate that these activities will not duplicate or displace private sector provision or activity. To support the above, you will need to make reference to relevant research or consultations that have identified the need for the operation and or the demand for its activities. You might also include details of feasibility studies, pilots or previous evaluations of similar interventions. You should not overload your business plan by including this material if it can be accessed through web links or reference footnotes. If it is essential to provide it in hard copy, it should be placed in an annex to the plan. Page 10 of 27

11 Core Criterion 2: Delivery In this section, the applicant should set out a description of the preferred option for the delivery of the operation. The delivery model of the operation should be outlined. Any procurement plans need to be outlined. Your organisation s experience in delivering EU Structural Funds should also be provided, as well as your ability to deliver what you propose to do. You will need to cover: A description of the preferred option for delivery, including: o The ultimate change(s) sought or final outcome(s) of the operation; o Evidence of a well defined scoping exercise of the activities necessary to deliver this/these changes with identified must have, prepared to consider and might accept activities; o Evidence that a number (i.e ) of alternative options for delivery were originally considered, including the methodology framework used (for example, a SWOT analysis). The analysis itself can be provided as an annex to the business plan; o Evidence of a further analysis of a short list of potential delivery options. These options should have included a do nothing option. This section should only provide a brief description of the short listed options and the methodology used. The detailed comparison should be provided later under the Value for Money criterion. Provide details of the delivery model to be utilised. For example, will the applicant operate a Financial Instrument? Will any elements of the operation be delivered through procurement? Any joint beneficiaries involved in the operation should be identified and the relationship between and responsibilities of all joint partners outlined. Details of whether or not the designation of limited Intermediary Body powers may be necessary should also be required. Guidance on delivery models can be obtained from WEFO s Regulations & Compliance team via your lead WEFO Page 11 of 27

12 officer. In addition, guidance will shortly be available on the WEFO website. The applicant should demonstrate: - Details of all public funding (including EU funding) received in the last 5 year period; - their track record of delivering similar operations, including formal evaluations of any previously delivered EU and/or publicly financed operations; - If such an evaluation was undertaken, whether any recommended improvements implemented; - Any other research evidence supporting the need and approach taken for this proposal; - That it has a legal basis for delivering the stated activities; - That is has or will have the necessary governance arrangements for delivery. Provide an outline assessment of the primary risks and any dependencies that are critical to the successful delivery of the operation. Provide details of any aspects of your operation that you consider are innovative. Page 12 of 27

13 Further Delivery Criterion: Indicators & Outcomes Under this section, applicant should provide a detailed narrative of the expected outputs, results and impacts that will derive from the proposed operation. Specifically, the applicant should provide: An analysis of the predicted longer term benefits associated with the operation; Details of the output & result indicators and their associated targets identified (both those listed in the Operational Programme and any additional indicators that the applicant consider relevant) that will be achieved in the short & medium term; Details of the precise activities that will be undertaken during the duration of the operation in order to achieve these indicators & outcomes. A clear logical flow should be demonstrated between the planned activities that will be undertaken, the short and medium term indicator achievement and the longer term benefits. Details of who (i.e. an identified post either within the management team or the wider delivery model) will be responsible for the delivery and monitoring of each identified indicator should also be provided. Delivery Profile You will also be required to provide a delivery profile (which should be provided as an annex to the business plan). This delivery profile must include the achievement of all key activities, indicators and outcomes identified above in a set of realistically timetabled milestones over the duration of the operation. It must include the achievement milestones needed for mobilisation and delivery, profiles of indicator target achievement, and all spend & audit milestones. Monitoring & Evaluation A monitoring and evaluation plan must be included which covers the following: Page 13 of 27

14 Evidence that the applicant is fully aware of their data reporting requirements in relation to the operation. The applicant must demonstrate that an effective system is in place for the collection, recording and reporting of all required data (including participant and enterprise level data). Details of the methodology to be used to monitor and evaluate the identified long term benefits. Will the operation seek to collect baseline data? If so, when will this be undertaken? Details and precise definitions of any other indicators to be included outside those required by the EU Programmes, including a justification of why they are necessary. An explanation of how your systems for collecting monitoring data will: o ensure that data will be used to refine the operation and keep it on track; o ensure high levels of data quality; o ensure that data will be effectively reported to WEFO at claim periods & reviews and at other intervals, and how data will be fed through into evaluation exercises; o collect and store wider information to be used for the management of the operation and for its evaluation. An explanation and justification of the chosen evaluation methods, covering both Formative evaluation (during the life of the operation) and Summative evaluation (at the end of the operation), including why they are appropriate to the scale and scope of your operation. Details of all internal and external evaluations to be undertaken should be provided, including an associated timetable. A description of the dissemination plans for the evaluations, including which organisations you plan to share the results with. Page 14 of 27

15 Further Delivery Criterion: Management of Operation In this section please explain in detail how the operation is to be organised and managed. You will need to detail the organisation structure and resources that are, or will be in place to achieve the changes sought through the operation. Some supporting information or examples of processes may also be required. Overall, you will need to show that your organisation has the necessary project management capability, leadership and control to manage all identified risks and to deliver the stated activities and indicators in accordance with the delivery profile and in line with the principles of the cross cutting themes. You will need to cover: A description of the governance & human resource requirements for the operation showing that you have a clear and detailed understanding of: o The governance arrangements necessary for delivery of the operation, including the identify and role of the Senior Responsible Officer (SRO); o The key management and staff functions considered necessary; o The skills and knowledge needed for each identified staff member and how these competence requirements will be met through recruitment and / or procurement within the required timeframe; o Confirmation that all resources required for effective delivery is or will be available; o How staff will be managed and performance indicators identified and monitored; o Confirmation that detailed continuity processes are in place to ensure that a strong link between the business plan and the delivery team is maintained and a loss of staff members will not lead to any drift in the agreed delivery; o A draft exit strategy for staff. All time critical governance and human resource activities described above must be incorporated into the delivery profile, with a specific focus on those activities that are essential for the preparation for delivery (which will constitute key milestones during the mobilisation of the operation). Page 15 of 27

16 Provide details of any necessary tender specifications for elements of the project that will be procured. Draft early tender notifications, PQQs or ITTs and associated draft contracts should be included in an annex to your Business Plan wherever possible. Provide details on initial and ongoing risk identification, mitigation and management. Have regular reviews been timetabled? What thought has been given to contingency planning if identified as necessary, such as in the event of any changes in demand that may impact on the successful delivery of the proposal? Include the identification of any procurement risks, such as securing suitable plant and or sub contractors. Outline the Management and IT systems, processes, facilities (accommodation & equipment) that you intend to deploy. It is important also to be clear about location and communication requirements. Draft closure plans should be provided which include a realistic timescale (at least one year) to begin preparations for the closure of the operation. Guidance on the closure of your operation is available via your WEFO officer and will shortly be available from the WEFO website. Provide information on how you will comply with any relevant legislation relating to your operation (e.g. equality and environmental, legislation, habitats directives, Natura sites, planning regulations etc). Promotional activity You will also need to evidence: How you will advertise and promote the opportunities / benefits that the project is offering to target participants and/or sectors; How you will work with identified stakeholders to promote the operation; How you will publicise the results and impact of your operation; Page 16 of 27

17 How you will disseminate best practice; How you will ensure that full acknowledgement of the funding from the European Union is clearly displayed including type of media utilised; How you propose to fly the EU flag during the week that includes 9 May; How you propose to ensure that participants and/or enterprises are clearly aware of the funding received from the EU; Confirmation that you will ensure that you liaise with WEFO s PR manager on any proposed launches/press releases to be arranged/issued in relation to the operation; Further information relating to publicity requirements can be obtained via your WEFO officer and will shortly be available from the WEFO website. Possible supporting documentation (to be provided in an annex to the Plan) could include: Organisation charts (to include key people and their responsibilities and reporting structure); Recruitment procedures; Job descriptions and specifications of any personnel to be directly funded by the operation; For Aid Schemes, the criteria for selecting and awarding grants to beneficiaries; Details of any environmental management systems; Memorandum Of Understandings, Service Level Agreements or contracts; Key project policies and procedures e.g. Equal Opportunities, Health & Safety; Any policies jointly agreed between management and trade unions, especially in respect of employment & recruitment. Page 17 of 27

18 Core Criterion 3: Financial & Compliance In this section you will need to explain the outline income and expenditure for the operation and how you expect the funding package to be constituted. In the outline financial profile, you should show your assumptions, justify the forecasted expenditure and show how estimates have been built up. You will need to differentiate between ESF and ERDF activities (where appropriate). Applicants will also need to provide evidence that the operation is fully compliant with all relevant EU and UK legislation and complies with the Rules and Conditions for Support from the European Structural & Investment (ESI) Funds Guidance on eligibility can be obtained from WEFO s Regulations & Compliance team via your lead WEFO officer. In addition, the above guidance will shortly be available on the WEFO website. You will need to cover: The applicant should demonstrate: - How long the organisation/business has been in existence; - When it was constituted or registered as a business or charitable body. An initial outline breakdown of income and expenditure (costs) linked to the planned activities required for mobilisation (i.e. preparation for delivery) and delivery of the operation. The intention to implement any Simplified Cost options should be stated and explained. For example, if a flat rate option will be applied, details of the rate and the sector (e.g. higher education) it will be applied to should be provided, as well as identification of the precise elements of the operation that will operate the flat rate option. Simplified costs may also include options around unit costs, especially for those operations applying for ESF funding. Guidance on simplified costs can be obtained from WEFO s Regulations & Compliance team via your lead WEFO officer. The applicant (as lead beneficiary) should provide details of its state aid status and that of all potential/planned joint beneficiaries. Page 18 of 27

19 Whether any component of the operation could potentially be classed as net revenue generating under Art. 61 of the Common Provisions Regulation, initial details of income sources and forecasts should be provided. In terms of Financial Instruments, can the operation demonstrate how the potential return of an investment (leverage) will be maximised? The Funding Package An explanation of the proposed funding package should be provided. If the funding package is restricted by programme or EU Regulations, for example, state aid, this will need to be stated. Details should include: o The level of EU structural funds required and why this (amount) is the minimum necessary for the operation to proceed; o Any joint beneficiary arrangements in respect of co-financing; o Co-financing in-kind by source / type and its links to operation costs; o Evidence of an independent 3 rd party valuation of any land and building assets to be used as co-financing; o Any other potential sources of funding that have been considered and/or may be required; o An explanation of remaining gaps in the funding package and identified ways in which they might be met. o Evidence that all potential funding from non-eu sources have been explored. o Sources and timing for the introduction of co-financing, with an explanation of any conditions or restrictions in cofinancing availability. Possible supporting documentation could include: Electronic copies of initial outline projections e.g. Excel files; Confirmation of any co-financing; Page 19 of 27

20 Development appraisals for capital operations. Page 20 of 27

21 Further Financial Criterion: Value for Money This section focuses on proving that the proposed operation represents optimum value for money for the delivery of the EU Programmes. Further financial details should also be provided that build on the initial outline provided above. You will need to cover: The detailed cost benefit analysis of the short listed options listed under the Delivery criterion. This analysis should clearly identify why the preferred option was chosen and have been based on a comparison of the following factors: o The overall quantifiable costs, benefits and risks; o The Net Present Value (NPV) which is derived from the calculation of quantifiable benefits minus quantifiable costs (with a further reduction due to the discount rate and consideration of optimism bias ); o The weighting and scoring of non-quantifiable benefits, including potential long term benefits. Income and Expenditure A detailed breakdown of income and expenditure (costs) linked to all identified activities & indicators. These need to be fully crossreferenced with the Delivery Profile. A (expenditure and income) cash flow projection for the lifespan of the operation identifying (on a monthly basis for the first two years of the operation, quarterly or annually beyond this) the cash surplus or deficit. Where the cash flow indicates an overdraft or access to working capital is needed, the proof that this exists should be evidenced. Page 21 of 27

22 The assumptions used and their sources, including the methodology used to calculate (allocate and apportion) costs and income. If the simplified cost option of flat rates for overhead costs is not to be utilised, a valid calculation of indirect costs (overheads) will need to be provided. Full details of any credit arrangements and facilities. You will also need to include: If the operation involves a capital build, it should provide the necessary Estates documents such as RIBA Design Stages and BREEAM assessments if required. Identification any self build assets and provide justification as to why the chosen option of building the proposed asset in house constitutes best value for money in the absence of comparative costs. Supporting Documentation could include: Full Cost Benefit analysis; Signed and audited Financial statements (last 3 years); Relevant cash flows; Electronic copies of projections e.g. Excel files; Final confirmation of all co-financing; Evidence supporting any credit arrangements. Page 22 of 27

23 Further Financial Criterion: Long Term Sustainability In this section you will need to describe a credible continuation or exit strategy. This should describe what will happen when the funding currently sought comes to an end. You will need to cover: A detailed assessment of the potential for sustainability in the postfunding period (if applicable and the activity will still be required). An analysis as to whether the operation has the potential to alter the delivery model in the future to a more financially sustainable model. If not, how will the activity continue to be delivered? If further financial support will be required, details of any plans to secure further ongoing support; If the activity will no longer be required, details on how the closure of the operation will be managed effectively. Page 23 of 27

24 Glossary of Terms Beneficiary (lead) The organisation that receives a funding award from the managing authority, or intermediate body, in order to initiate, or initiate and implement, an operation. Formerly referred to as sponsor under programmes. Beneficiary (joint) A partner organisation responsible for initiating and/or managing and/or implementing part of an operation. Assessed and approved by the managing authority to incur eligible expenditure and be reimbursed on the same basis as the (lead) Beneficiary. BREEAM Building Research Establishment Environmental Assessment Method for buildings and large scale developments. It sets the standard for best practice in sustainable design and has become the de facto measure used to describe environmental performance of buildings and communities. Co-financing Formerly referred to as match funding under the programmes. Common Provisions Regulation EU Regulation 1303/2013 that sets down the common regulatory provisions for the ERDF, ESF (as well as rural & fisheries) programmes for the period. Economic Prioritisation Framework (EPF) The EPF will help to guide the use of EU funding over the funding period by setting it within a broader investment context. It provides an overview of areas of key economic opportunity in Wales, highlighting important investments which are underway or being planned. Page 24 of 27

25 Mobilisation phase The mobilisation phase is a formal acknowledgement that most operations require a period of time post-approval to prepare to deliver the agreed indicators and activities. Mobilisation milestones will be agreed between WEFO and the applicant during the business planning stage. These milestones will consist of activities that are necessary for the operation to commence delivery. WEFO will offer support and monitor the achievement of these milestones. Once WEFO agree that all milestones are successfully completed the operation will move to the delivery phase. Net Present Value The recommended approach for spending appraisal within the public sector. Net Present Value is the sum of discounted costs and benefits over the lifetime of the proposal. Costs are discounted in order to compare the costs and benefits that occur in different time periods. The discount rate used in public sector projects is set by HM Treasury and is currently set at 3.5% (as referenced by the Green Book Guidance on Public Sector Business Cases Using the Five Case Model October 2012). Net Revenue Cash in flows directly paid by users for the goods or services provided by the operation, such as charges borne directly by users for the use of infrastructure, sale or rent of land or buildings, or payments for services less any operating costs and replacement costs of short life equipment incurred during the corresponding period. Operating cost savings generated by the operation shall be treated as net revenue unless they are offset by an equal reduction in operating subsidies. Operation Consists of either a project or a group of related, distinct projects administered within in a single operation. Operation Logic Table A template that is used to describe the logic underpinning a proposed operation during the initial stages of applying for EU funding. During the Page 25 of 27

26 business planning stage and beyond the Operation Logic Table becomes a quick reference document to describe the purpose of the operation. RIBA Royal Institute of British Architects. Simplified Costs A payment model where eligible costs are calculated using pre-agreed flat-rate percentages, unit costs or single lump sum payments. Page 26 of 27

27 Annexes The Operation Logic Table associated with this proposal should always be provided as an annex. This should serve as an ongoing quick reference document to concisely illustrate the purpose of the operation. The Delivery Profile should also be provided as an Annex and fully cross referenced with the relevant sections of the business plan. Page 27 of 27