Economic Appraisal Guidance

NI Practical Guide to the Green Book

Step by Step Appraisal Guidance

2.3		Step Three
		Define the Objectives and Constraints
2.3.1		Objectives must be stated so that it is clear what proposals are intended to achieve. The objectives of individual proposals should be consistent with statements of government policy, departmental or agency objectives, departmental Public Service Agreements (PSAs), and wider macro-economic objectives.
2.3.2		Objectives can often be specified in terms of a hierarchy of outcomes, outputs, and targets that should be clearly set out in an appraisal: Outcomes: These are the eventual benefits to society that proposals are intended to achieve. Often, objectives will be expressed in terms of the outcomes that are desired. Examples: improvements in health or education. Outputs: Sometimes outcomes cannot be directly measured, in which case it will often be appropriate to specify outputs, as intermediate steps along the way. Outputs are the results of activities that can be clearly stated or measured and which relate in some way to the outcomes desired. Examples: numbers of patients treated, numbers of pupils achieving exam results. Targets can be used to help progress in terms of producing outputs, delivering outcomes, and meeting objectives. Examples: the number of extra treatments or pupil places provided by a certain date.
2.3.3		Objectives should initially be stated broadly enough so that a wide range of options to meet them can be identified. However, they must be developed in more specific detail, including targets that are "SMART" - Specific, Measurable, Achievable, Relevant and Time-dependent: Objectives must be defined in specific detail, in order to: provide a clear basis for identifying and defining options, enable appraisal of how well the options perform, facilitate ex post evaluation, and provide for accountability. It is particularly important that objectives are measurable - otherwise it will not be possible to gauge whether or how well they have been achieved. Vague, qualitative objectives do not provide for any of these things and should be avoided. Objectives should not normally be expressed in terms of inputs - however, targets for the process of project implementation should be stated, including, for example, milestones for achievement of various stages. Where there are numerous objectives, or there is a potential conflict between objectives, it is helpful to indicate their relative priority, both to inform option assessment and to assist in post project evaluation.
2.3.4		Important constraints upon the proposals should be explained. These may be technical, legal, financial or political in nature, or they may have to do with timing or location.
2.3.5		Sometimes an existing policy commitment may be regarded reasonably as a constraint upon appraisals, but this should not always be taken for granted. Policies may deserve to be reviewed, particularly when a significant time has elapsed since they were decided. This can apply equally to other apparent constraints - they may be reasonable in some cases but should not always be taken at face value.
2.3.6		Objective setting should normally precede option appraisal. However, if circumstances change, or as appraisal reveals more about the options, it can be appropriate to revisit initial objectives and revise them during the course of an appraisal.
2.3.7		Output specification generally should occur only after needs and objectives have been identified, but the precise point at which it occurs thereafter may vary. Specifying the required outputs involves asking questions about the degree to which need should be met, and the level and type of outputs that should be provided. This may require consideration of strategic options. In some cases, the scope for varying outputs may be constrained, in which event output specification can occur at a relatively early stage. For example, it tends to happen early in schools projects, where the Building Handbook specifies the outputs appropriate for various enrolments. However, in other cases it may be appropriate to conduct detailed appraisal of alternatives offering different levels of output, before selecting a particular output specification. The following questions may help to set suitable objectives and targets: What are we trying to achieve? What are our objectives? What would constitute a successful outcome or set of outcomes? Have similar objectives been set in other contexts that could be adapted? Are our objectives consistent with strategic aims and objectives as set out, for example, in the department's PSAs? Are our objectives defined to reflect outcomes (eg, improved health, crime reduction or enhanced sustainable economic growth,) rather than the outputs eg operations, prosecutions or job placements), which will be the focus of particular projects? How might our objectives and outcomes be measured? Are our objectives defined in such a way that progress toward meeting them can be monitored? What factors are critical to success? What SMART targets can we then set? What targets do we need to meet?

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