Capital Strategy Guidance: A Whole Organisation Approach (2024)

Summary

Capital Strategy Guidance: A Whole Organisation Approach outlines best practice in prudent, sustainable and resilient local government investment, drawing on examples from across the sector.

Format

ONLINE

Published

May/2021

Author

CIPFA

£295.00 excl VAT

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Capital strategy is not simply a document, it is a whole organisation approach to effective, long-term planning and investment, with outputs and outcomes that lead to healthy, vibrant, green and resilient communities, businesses, organisations and geographic areas.

Not fully embracing the spirit of the requirement for a capital strategy you, and the population that you serve, will not be benefitting from this important aspect of strategic planning.

The capital strategy guidance is aimed at the strategic leadership of organisations, both political and corporate.

This guidance focuses on a whole organisation approach to prudent, sustainable and resilient local government investment.

The development of capital strategies has been challenging and difficult to implement fully and it is clear from the examples examined that there is still room for improvement for all local government organisations.

The intention of this capital strategy guidance is to learn from what has been achieved to date and to support local government organisations with continuous improvement and refresh. We have identified areas for improvement that may help as a form of checklist.

This guidance has been brought to life by including points to consider and extracts from capital strategies reported in 2020, although we recognise that most were published prior to the more serious impact of COVID-19.

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Capital Strategy Guidance: A Whole Organisation Approach (2024)

FAQs

What is the capital strategy? ›

What Is a Capital Growth Strategy? A capital growth strategy seeks to maximize capital appreciation of an investment portfolio over the long term through an asset allocation geared to securities with high expected returns.

What is an example of a capital management strategy? ›

Further, it evaluates funding sources, reviews account receivables and payables, and makes well-informed strategic decisions. Examples of capital management include: Company ABC wants to increase sales and grow revenue by producing more products, delivering services quicker, and improving inventory turnover.

What is capital strategy guidance Cipfa? ›

The capital strategy guidance is aimed at the strategic leadership of organisations, both political and corporate. This guidance focuses on a whole organisation approach to prudent, sustainable and resilient local government investment.

What is the capital plan strategy? ›

Using Strategic Capital Planning allows you to run scenarios to assess risk and understand the range of possible outcomes to your financial projections. Typical scenarios that we see modeled: Deferring a capital project or portfolio of projects. Including and excluding a capital project or portfolio of projects.

What are the three working capital strategies? ›

Question: The three main working capital strategies, namely aggressive, conservative, and moderate, differ primarily in the:​ ​relative amounts of short-term debt used.

What is the capital requirement strategy? ›

The capital requirement is the sum of funds that your company needs to achieve its goals. Plainly speaking: How much money do you need until your business is up and running? You can calculate the capital requirements by adding founding expenses, investments and start-up costs together.

What is capital management in simple words? ›

Capital management refers to the area of financial management that deals with capital assets, which are assets that have value as a function of economic production, or otherwise are of utility to other economic assets.

What is a working capital management strategy? ›

Working capital management aims at more efficient use of a company's resources by monitoring and optimizing the use of current assets and liabilities. The goal is to maintain sufficient cash flow to meet its short-term operating costs and short-term debt obligations while maximizing its profitability.

What is an example of a capital management decision? ›

Example: A retail business needs to manage its working capital to ensure it has enough inventory to meet customer demand while also maintaining healthy cash flow. If the company orders too much inventory, it ties up cash that could be used for other purposes.

What is the capital planning approach? ›

This involves developing a long-term plan that identifies and prioritizes necessary capital projects, establishes a project timeline, and assigns responsibility for execution. This plan should consider factors such as the age and condition of your building, industry standards and regulations, and stakeholder input.

What are the three different approaches for capital allocation? ›

Companies use many different methods to allocate their capital. These include return on investment (ROI), net present value (NPV), and payback period. Capital allocation is a critical part of a company's management. It can have a major impact on the company's profitability and growth.

What is the flexible capital approach? ›

Flexible capital is a global, all-weather solution that sits between private credit and private equity. The key is customization: A company teams up with a strategic partner who provides alternative sources of capital to help execute its vision.

What does capital strategy mean? ›

A Capital Strategy is a high level overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of services along with an overview of how associated risk is managed and the implications for future financial sustainability.

What is an example of a capital plan? ›

The most common examples of capital projects are infrastructure projects such as railways, roads, and dams. In addition, these projects include assets such as subways, pipelines, refineries, power plants, land, and buildings.

How do you write a capital plan? ›

5 Steps to a Strategic Capital Plan Framework
  1. Step One: Gather the Right Data. ...
  2. Step Two: Include Key Stakeholders. ...
  3. Step Three: Develop an Objective Project Selection Toolkit. ...
  4. Step Four: Create Options for Funding. ...
  5. Step Five: Generate a Plan for Action.
Mar 10, 2021

What is the strategic capital? ›

The strategic capital is how you put the other elements of your intangible capital to work. You can have great people, great systems and processes, great partners—but without the right strategic capital, you have no reason for being. It all begins with a clear definition of the purpose of your business.

What is the human capital strategy? ›

A human capital strategy is a framework for evaluating and optimizing the value and potential of an organization's workforce. It involves aligning your resource pool with the vision and goals of the business to minimize skill gaps and maximize future opportunities.

What is the D1 capital strategy? ›

D1 has a fundamental and research-intensive investment strategy with a focus on medium to long-term returns. Its research centers on the consumer, business services, financial services, healthcare, industrials, real estate and technology, media and telecom sectors.

What is the capital budget strategy? ›

The process involves analyzing a project's cash inflows and outflows to determine whether the expected return meets a set benchmark. The major methods of capital budgeting include discounted cash flow, payback analysis, and throughput analysis.

References

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