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Public services are no different. VfM is about achieving the right local balance between economy,
efficiency and effectiveness, the J - spending less, spending well and spending wisely.
This means that VfM not only measures the cost of goods and services but also takes account of
the mix of cost with quality, resource use, fitness for purpose and timeliness to judge whether or
not, together, they constitute good value.
is what goes into providing a service, such as the cost per hour of care workers or the
rent per square metre of accommodation.
is a measure of productivity ie, how much you get out in relation to what is put in. For
example, the number of people visited per home care worker per week or the amount of refuse
collected per refuse-lorry.
is a measure of the impact that has been achieved, which can be either quantitative
or qualitative. Examples include how many people were prevented from needing residential care
through using home care services (quantitative), and feedback from different sections of the
community with arrangements for tenant participation (qualitative). Outcomes should be equitable
across communities, so effectiveness measures should include aspects of equity, as well as quality.
Sustainability is also an increasingly important aspect of effectiveness.
VfM is high when there is an optimum balance between all three elements - when costs are
relatively low, productivity is high and successful outcomes have been achieved.
VfM is not about
. It can be achieved in different ways including:
Gc reducing costs (eg, labour costs, better procurement and commissioning) for the same outputs
Gc reducing inputs (eg, people, assets, energy, materials) for the same outputs
Gc getting greater outputs with improved quality (eg, extra service or productivity) for the same inputs
Gc getting proportionally more outputs or improved quality in return for an increase in resources.
VfM is not an optional add-on, nor something that can be achieved as a one-off. It is a way of
doing things that needs to underpin everything an organisation does, from performance
management to procurement, from business planning to consultation.
The emphasis of VfM has changed through the years, from a focus on competition through
Competitive Compulsory Tendering, to encompassing issues of quality and service improvement
through best value, to achieving efficiencies and, most recently, to ensuring that issues of equity
and sustainability are addressed. These are all different ways of looking at the same topic.
Assessing and measuring VfM can, however, still be a challenge. Some elements, such as quality
and sustainability, may be subjective, difficult to measure, intangible and misunderstood.
? can often take many years to materialise, for example in long-term contracts. It is also
specific to different contexts. What is VfM for one organisation, or locality, may not be the same for
another. What is VfM at one point time may not be a year later. A strong element of good,
informed, judgement is therefore required when considering whether VfM has been satisfactorily
achieved or not.
Utility derived from every purchase or every sum of money spent. VFM is based not only on
the minimum purchase price (economy) but also on the
maximum efficiency and effectiveness of the purchase.
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