Usually a do nothing (that is, status quo) option or do minimum option. Bīase Case: the best estimate for each option of how much it will cost in economic terms, including allowance for risk and optimism.īaseline option: a benchmark option included so that the VFM of the alternative do something options may be judged by reference to current or minimum service provision. Also known as economic appraisal, expenditure appraisal or investment appraisal.Īssessment: a broad umbrella term for appraisals, evaluations and more specific forms of expenditure appraisal such as affordability analyses or additionality tests. See also departmental expenditure limit (DEL).Īppraisal: the process of defining objectives, examining options and weighing up the relevant costs, benefits, risks and other factors to inform an investment decision. Because a shorter-term view is required in such areas, a separate annual AME spending limit is imposed. AME includes social security benefits, local authority self-financed expenditure, debt interest, and payments to EU institutions. It involves setting out the capital and resource DEL impacts of proposals year by year over time showing (separately) the corresponding year by year cash flows and indicating the intended sources of funding.Īnnually managed expenditure (AME): expenditure that is relatively volatile and largely demand-led that cannot reasonably be given firm, multi-year limits in the same way as DEL. In cases of financial assistance, additionality should be assessed to establish that the proposed assistance is the minimum necessary.Īffordability: an assessment of whether proposals can be paid for in terms of resources, cash-flows and funding. However, additionality may be partial for example, if an activity is undertaken on a larger scale, or earlier, or to a higher standard, or within a policy target area, as a result of public sector intervention. A project is regarded as fully additional if, without intervention, it would not happen at all. Additionality: an impact arising from an intervention is additional if it would not have occurred in the absence of the intervention.
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