Value for Money (VFM) Linda Levin

What does VFM mean to you?

Economy Efficiency Effectiveness

The 3 ‘E’s Economy Efficiency Effectiveness Price paid for what goes into providing a service e.g. Salaries, buildings, computers, contracts, supplies Efficiency A measure of productivity How much you get out in relation to what you put in Effectiveness A measure of the impact achieved Qualitative or quantitative or both

Relationship between the 3 ‘E’s Cost (£) Inputs Economy Efficiency Outputs Outcomes Qualitative and quantitative Effectiveness

Achieving best possible results by making the best use of resources available.

VFM is.... ....The optimum balance between all three ‘E’s Relatively low costs High productivity Successful outcomes e.g. Improved performance, reduced costs, increased customer satisfaction, reduced service failures and waste

Comprehensive Spending Review – the proposed cuts VFM taking on even greater importance Anticipated reduction in funding as a result of: Benefit cuts (& increasing cost of living)– potential impact on customers’ ability to pay rent due Supporting People funding cuts – impact on support services for vulnerable people? Increasing costs – VAT increasing to 20% on supplies and services bought in

Four ways of achieving efficiency Reduce inputs (level of resources) for the same results Reduce prices (cost of resources) for same results Improve results using the same resources Increase inputs (resources) for proportionate increase in results

TSA VFM Standard Specific expectations Required outcomes Demonstrate to tenants: How expenditure is prioritised How VFM is secured and tested Future plans and priorities for achieving VFM Tenant influence services and resultant charges Required outcomes Comprehensive approach to VFM across all services and national standards Include details of VFM approach and how commitments will be achieved in annual report

Exercise Please see void process handout What changes would you recommend to improve VFM? What outcomes/outputs would you expect as a result?

Comparing costs and performance Does your landlord know the costs of all services provided and activities undertaken? Are costs and performance compared with other housing organisations? Benchmarking arrangements – how does your landlord compare with the top performers? What could your landlord do to become a top performer?

Comparing costs and performance...cont’d Advantages of benchmarking: Provides an insight Useful starting point in examining VFM But handle information with care – differences in costs and performance may be explained by: Different local context e.g. Areas of high ASB/crime likely to have higher costs for ASB services

Comparing costs and performance...cont’d High or low spend on particular services may be in response to tenants’ feedback e.g. Higher standard of communal services and security required by an organisation’s tenants You need to consider spend and outputs/outcomes when comparing

Thank you for listening...any final questions? Linda Levin Email: linda@tenantadvisor.net Mobile: 07967 342436