Analysing cost and benefits

A focus on cost and benefits is a key aspect of business analysis.

What is cost-benefit analysis? 

Cost-benefit analysis enables councils to take evidence-led decisions about the total costs and benefits of taking a particular course of action. 

It provides a systematic way of identifying and evaluating the cost and potential benefits of different options. 

Benefit and cost analysis run alongside risk analysis to inform options appraisals and business case development.  


  • Understanding of how to complete options appraisals.
  • Understanding of business case development including the Green Book principles. 
  • Understanding of local government finance including project accounting, budget setting, budget monitoring and how costs are made up and accounted for. 
  • Knowledge of the benefits management lifecycle. 
  • Knowledge of benefit management tools, templates, and techniques.  
  • Understanding of HR requirements, including the legal framework for structural changes. 


Able to: 

  • Analyse data: Use tools and techniques to identify patterns, trends, relationships and extract meaningful insights. 
  • Identify and profile benefits: Using a variety of data sources to define each benefit, document the type of benefit, baseline measures, benefit risks and benefit owners aligned to the implementation of a change. 
  • Model costs: Ensuring the true expense of the change, or cost of the service to the Council is known to inform the potential return on investment case. 
  • Think critically: Understanding the potential for bias and ensure that biases, or the potential for them in benefits or costs, are made clear, ensuring that data led decision making is robust. 
  • Undertake options appraisals: Evaluating the strategic and business need fit, financial viability and feasibility of each option based on the analysis completed, including evaluation of external factors such as supplier availability, capability, and capacity. 
  • Manage risks: Associated with the costs of project and programme delivery, and the realisation of benefits through the project or programme lifecycle. 
  • Work at pace, with attention to detail: To ensure efficient benefits profiling and cost modelling is undertaken. 
  • Collaborate effectively: With stakeholders at all levels to ensure costs and benefits assumptions are understood and inform decisions effectively.  
  • Communicate: Both verbally and in written form.  


Behaviours associated with cost-benefit analysis require team members to be:  

  • Precise 
  • Analytical 
  • Organised 
  • Objective 
  • Collaborative  
  • Open minded 
  • Curious 
  • Open to feedback 
  • Inclusive 
  • Resilient  
  • Adaptable and pragmatic  
  • Committed to continual learning

Business analysis – maturity index 

A related business analysis maturity index has been created to enable councils to understand their current maturity and to set, and work towards, a target state. This can be downloaded below.