1. Value for Money (VFM)
Linda Levin

2. What does VFM mean to you?

3. Economy
Efficiency
Effectiveness

4. 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

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

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

7. 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

8. 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

9. 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

10. 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

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

12. 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?

13. 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

14. 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

15. Thank you for listening...any final questions?
Linda Levin
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