Return on licensing support, assessed through baseline, plausible contribution and a range

Licensing support can reduce administrative effort and improve the quality of records, but it cannot guarantee authority approval or business revenue. A return-on-investment case should measure the work the service controls and keep the regulator's decision separate.

What to take away

Define the investment

Include supplier charges, staff time, implementation, training, data cleanup and continuing operation. Department for Business and Trade guidance on dealing with licences and regulations supports early identification of requirements and responsible bodies. Do not count mandatory compliance itself as an optional software benefit.

Establish a baseline

Observe the current process across a defined period. Useful measures may include time to identify a confirmed route, avoidable document returns, records without owners and effort spent recovering correspondence.

For example, in England a premises licence under the Licensing Act 2003 involves checking the application, the operating schedule and any representations before the authority decides. The Department for Business and Trade's Find a licence service begins discovery but warns that its catalogue may be incomplete, so confirmed routing needs its own measure.

Calculate a range

State the period, population and counterfactual. Use low, central and high cases for uncertain time savings or avoided rework. Show wage-rate assumptions and exclude benefits that cannot be evidenced. Discount recurring costs from recurring benefits on the same basis.

Illustrative example only. A service handles 500 cases a year, at a staff cost of £18 per hour. One-off implementation is £2,000. Annual running cost is £600.

Low case: 6 minutes saved per case, 50 hours, £900 gross, £300 net, payback 6.7 years.

Central case: 12 minutes saved, 100 hours, £1,800 gross, £1,200 net, payback 1.7 years.

High case: 20 minutes saved, about 167 hours, about £3,000 gross, about £2,400 net, payback about 0.8 years.

Replace these figures with your own case volume, minutes and wage rate.

Build a transparent calculation

Start with observed case volume and minutes spent on a defined task.

Multiply only after removing exceptional cases or describing how they are treated. Apply an agreed staff-cost basis and show the formula. If the proposed change saves ten minutes in a synthetic test, do not scale that result across a year until real users and cases have been observed.

For avoided rework, count the same failure before and after implementation, such as a returned document caused by an internal omission. Record the time genuinely spent correcting it. Exclude authority requests that arose from substantive case review unless the service could reasonably have prevented them.

Present payback as a range, with the assumptions most likely to change highlighted. Include negative or zero-benefit cases where evidence supports them. The calculation should help decide whether to continue, modify or stop the service.

Attribute only plausible contribution

A tool may reduce duplicate entry or make expiry records easier to recover. An adviser may improve preparation. Neither controls the authority decision. Exclude claims that the service caused every approval, prevented every delay or generated all post-launch revenue.

The Government Digital Service's guidance on using data to improve a service connects measures to user needs, baselines and decisions. Apply that discipline to the evaluation, while recognising it is service-practice guidance rather than licensing evidence.

Check contract exposure

Review what the supplier actually commits to deliver. Check the contract for delivery dates, data access, service levels, exit terms and any liability cap.

Look for an explicit commitment to provide the records needed for the benefit case. The Unfair Contract Terms Act 1977 may be relevant to some restrictions, but qualified advice is needed for a particular agreement. A benefit case should not assume compensation that the contract does not provide.

Set decision thresholds

Agree in advance what result would justify continuing, modifying or ending the service. A small time saving may be worthwhile if it removes a serious recovery risk, while a large forecast saving is weak if it relies on unobserved approval gains. Include quality and control measures beside money.

Give each claimed benefit an owner and review date. If the required data cannot be collected proportionately, remove the claim or use a narrower qualitative decision. Do not extend a short pilot result to every activity, site or user without testing those differences.

Reassess after implementation using the same definitions. Publish limitations and negative findings. If the process became faster but evidence quality worsened, the investment has not produced the claimed operational benefit.

Before you act

Common questions

What costs should be included when defining the investment?

Include supplier charges, staff time, implementation, training, data cleanup and continuing operation. Department for Business and Trade guidance supports early identification of requirements and responsible bodies. Do not count mandatory compliance itself as an optional software benefit, because that would overstate what the service delivers.

Why should a return case avoid claiming every approval?

A tool may reduce duplicate entry or make expiry records easier to recover, and an adviser may improve preparation. Exclude claims that the service caused every approval, prevented every delay or generated all post-launch revenue, since those outcomes rest with the regulator.

How should uncertain time savings be handled in the calculation?

State the period, population and counterfactual, then use low, central and high cases for uncertain time savings or avoided rework. Show wage-rate assumptions and exclude benefits that cannot be evidenced. Discount recurring costs from recurring benefits on the same basis, and present payback as a range.