THE SUPPORTING FACTORS THAT MAKE VM AN ATTRACTIVE OPTION IN MEETING THE BEST VALUE REQUIREMENTS OF THE UK PUBLIC

SERVICE SECTOR

Kirsty Hunter and John Kelly School of the Built and Natural Environment, Glasgow Caledonian University,

Glasgow, G4 OBA, UK khu@gcal.ac.uk

BIOGRAPHY Kirsty Hunter is a research assistant in the School of the Built and Natural Environment at Glasgow Caledonian University having obtained a 2.1 Honours degree in Building Design Engineering BEng at the University of Strathclyde, Glasgow. Her current post has involved working on a range of research projects in the general area of value management and value engineering. She also assists Professor John Kelly of Glasgow Caledonian University in a variety of workshops in predominantly construction-related projects. Kirsty has

completed the IVM certified advanced courses towards a professional qualification in value management. Kirsty is currently in the final stages of a PhD degree in the field of value management which involves an investigation of the application of value management in the public service sector, an area where value management is infrequently used in the UK. Her PhD work and involvement in research projects have allowed Kirsty to attend and present at a number of international conferences. Through the dissemination of her research Kirsty has won two best paper awards at international conferences. ABSTRACT In the USA Best Value means the expected outcome of an acquisition that, in the Governments estimation, provides the greatest overall benefit in response to the requirement*. In the UK the Best Value concept is focused on local government and defined as a framework, based on a set of nationally determined indicators to help local authorities measure, manage and improve their performance.** This paper reports on doctoral research to answer the research proposition; Value management is a service which can maximise the value of government services to achieve Best Value. A viable case has been made to the extent that this question can be justifiably answered through detailed explanation of the benefits and outcomes for the public service sector in adopting a value management (VM) approach. Ten supporting factors of applying VM in the public service sector to meet the requirements of Best Value have been identified. The four main areas of research involved a grounded theory study of project issues arising in workshops, a local government questionnaire on projects, an action research VM workshop in local government, and combined desk study and case study research to explore a methodology for the application of VM within a Best Value arena. The general benefits associated with using value management in projects as well as the specific benefits to be reaped in local government services from use of such a management tool

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are reviewed. Finally, the paper proposes a value management service sector project model for the public sector which was produced as a result of the research findings. * Federal Acquisition Regulation (FAR), Subchapter A General Part 2 Definition of Words and Terms, 2.101. **Office of the Deputy Prime Minister (responsible for Local Authorities in England) Keywords: Best Value, value management, public service sector INTRODUCTION TO THE RESEARCH PROJECT The primary aim of this doctoral research was to determine if VM can be successfully applied to the public service sector to support Best Value and therefore exploiting new ground for implementation. The focus was on the service sector because VM has already been proven as a successful value-adding method for the manufacturing and construction industries. The reasoning for the public sector focus was due to the introduction of Best Value in Scottish local government which became a statutory duty in 2003 during the course of the doctoral research. This presented a timely opportunity considering that VM and Best Value have the same policy; to achieve maximum value for the customer or client, and therefore the use of VM could be demonstrated and tested for its support in achieving Best Value. The literature review examined three key areas which were of fundamental importance to understanding the relationship between Best Value, value management and projects. A robust methodology comprising three key research methods was constructed to answer the research proposition; Value management is a service which can maximise the value of government services to achieve Best Value. The synthesis of the literature explored the corroboration between Best Value, VM and projects and deduced the following; (1) VM is a project focussed services that relies on interventions or value opportunities within the project life cycle, (2) a local authority will instigate projects to ensure continuous improvement to satisfy Best Value, and (3) VM and Best Value have the same objectives, to achieve maximum value for the customer or client. The research methodology proposed was; (1) a grounded theory study on VM case studies exploring project issues, (2) a questionnaire study on local authority projects targeted at all Scottish local authorities, (3) an action research study in a VM workshop on a local authority project, and (4) a combined desk study and case study research which was part of a funded research project exploring the use of VM in a Best Value project to propose a methodology for the application of VM within a Best Value arena. The purpose of these chosen research methods were; (1) to identify if there was commonality of project issues (project issues that were generic), (2) to explore local authority understanding of projects and identify the key points in the project life cycle where VM could be applied, (3) to confirm that VM could be successfully used in a local

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authority project and to validate and test the generic issues identified in the grounded theory study, and (4) to derive a logical project framework that applies VM to support continuous improvement to achieve Best Value. The outputs of the research are; (1) a predictive framework of project issues which can be used in any VM workshop regardless of project type, (2) a local authority generic project model; The Three-Stage Project Model, and (3) a logical project framework that uses a VM approach to achieve Best Value which indicates the VM opportunity points; the application points in the project life cycle when VM should be applied. THE RESEARCH FINDINGS This section reports on the primary findings from the four-part research investigation. A viable case has been made to the extent that the research proposition; Value management is a service which can maximise the value of government services to achieve Best Value can be justifiably confirmed through the detailed methodology that has been applied. Findings from the Scottish Local Authority Questionnaire Survey The questionnaire results were representative of thirty-one (31) local authorities out of a total possible thirty-two (32) giving a response rate of 97%. The questionnaire was sent to forty-eight (48) local authority members from roles such as policy officers, service improvement managers, performance operations managers, strategic planning managers, and Best Value managers. Thirty-three (33) responses were received in total giving an overall questionnaire response rate of 69%. The questionnaire explored four areas; (1) Projects, (2) Project Management Tools, (3) Best Value, (4) Best Practice and Benchmarking. It was discovered that there is a varied approach to how local authorities procure and manage their projects. This was confirmed by the following statements from two local authorities who chose to opt out of completing the questionnaire and was also reflected in some of the other local authority responses where respondents highlighted that there is diversity, the approach varies and there is not a consistent approach. We are a large and diverse authority we have a range of approaches to project management it would not be possible to give you some of the definitive yes /no responses as they would not accurately reflect the range of practice and approaches. We have a distributed management structure and no corporate approach our authority is so diverse and there is no common approach. I cannot complete the questionnaire from a corporate or a departmental service level as the responses would have to be both yes and no. Respondents were asked how they would define a project to identify their level of understanding in relation to projects as Best Value is applied across projects and VM is a project focused service. Only 53% of respondents gave an appropriate definition of a project by using words such as; resources, timescale, objectives and budget which suggests a lack of understanding of the components of a project amongst the other 47%.

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This could be as a result of only 43% being found to have a standardised project management approach. Local authorities were asked to indicate what statement best described project work in their authority. 46% of local authorities felt that they had a well thought out plan to project work compared to 54% who indicated that an ad-hoc approach is taken. VM is a project focussed management technique that may be used in public service sector projects and will particularly be of benefit to those projects requiring guidance and direction. The questionnaire study confirmed the use of tools and techniques currently used in the Three Wheels Framework (a proposition of the research providing a logical project framework); Investors in People (81%), ISO 9000 (77%), EFQM (71%), Charter Mark (55%), Balanced Scorecard (52%), and Six Sigma (6%). It also identified other methods to promote a practice of continuous improvement and better project practice such as; consultation / stakeholder analysis, process mapping / gap analysis, scorecards, performance management, and in-house guidance for conducting strategic and management reviews. 74% of local authorities agreed that quality tools assist in Best Value Reviews and almost a third (30%) specifically mentioned that the tools support reviews in highlighting gaps / areas / issues to be addressed. An initial review on projects highlighted a number of generic project stages that were structured into a generic project model; The Three-Stage Project Model. The three stages can be described in broad terms as; the Pre-Project stage which is primarily discussion and paper based involves users and planners (Nicholas, 2001) and concludes with the termination of the pre-project stage when full budgetary approval is given. This signifies the point when the initial concept becomes an identifiable project known as project initiation (Woodhead, 2000). The Project stage where a practical start is identifiable involves designers and builders (Nicholas, 2001). Finally, the Post-Project stage where the project is absorbed into the organisations core business involves users and operators (Nicholas, 2001). Respondents were asked what project stages in The Three-Stage Project Model they were familiar with, what stages need more time spent in their particular department and which project stages involve most problems. This informed the VM opportunity points in The Three-Stage Project Model shown in Figure 1. Four VM opportunity points were identified. Two were located in the pre-project stage, however both of these stages; select project alternatives and feasibility, can be addressed in one VM study. The reason this was chosen as a VM opportunity point is that these stages were both identified as being least familiar, as stages where most problems exist and where more time requires spent. VM opportunity point two in the project stage was selected to address the requirement for more time in the tactical design of the project. The four stages in the post-project stage all required either a better degree of understanding to ensure successful absorption into local authority core business, were where most problems existed and were identified as stages where more time needed spent. Therefore, two VM opportunity points have been located here to ensure the successful absorption of the project into local authority core business.

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Project Conception

Establish Rationale

Strategic Planning Process

Identification of Key People

Pre-feasibility / Feasibility

Select Project Alternatives, Appraisal

Definition of Project and Decision to Proceed

Formal Planning of Project

Implementation, Project Execution

Monitoring of Project

Handover and In-service Support

Operation

Evaluation

Pre-

Proj

ect

Proj

ect

Post

-Pro

ject

Pre-

Brie

f

Brie

fing

Con

cept

Des

ign

Det

ail

Des

ign

Site

Ops

.

Feedback

Use

Tactical Design of Project

Site

Ops

.

CO

RE

BU

SIN

ESS

1

2

3

4

Figure 1 The Three-Stage Project Model Adapted for the Public Service Sector

When considering the use of VM, local authorities may want to use this model to identify what stages of the project under consideration would value a VM approach. However, in terms of VM, local authorities need educated on the benefits of using such an approach as currently, less than a third (28%) of local authorities have used VM which is unlikely to be a collective local authority approach. However, this suggests that there is some knowledge of the benefits of VM within local authorities but more would need to be done to ensure an adequate understanding on how VM may be used to support Best Value. Almost all (93%) local authorities considered a Best Value Review to be a project. VM is project focused and therefore can be used in a Best Value Review. Local authorities were asked to select from four options the statement that best describes the resulting action plan from a Best Value Review to reveal how effective the current situation is with regards to reviews and to determine if the VM approach is a suitable option for a Best Value Review. A breakdown is given; (1) A simple straight forward plan which is implemented to improve the service (25%), (2) Very supportive in outlining what improvement actions have to be taken, the people to implement and the timescales for completion (46%), (3) Moderately supportive by providing some information that outlines plans for improvement (25%), (4) Not supportive in taking action to improve the service (4%). Almost half of local authorities believed that their Best Value action plan is very supportive. Most local authorities have a planning system in place for implementing action plans. However, only 46% of local authorities described the resulting action plan from a Best Value Review as very supportive in outlining what improvement actions have to be taken, the people to implement and the timescales for completion. Two local authorities

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stated that action plans were implemented badly and that it was hard work. The output of any VM study is an action plan, listing activities, timescales and people to implement. VM is a logical, systematic approach which will address these issues identified. Findings from the Grounded Theory Study The objective of this part of the research was to develop a theory using grounded theory to confirm whether similar issues appear at similar project stages and if these were generic in nature. The research commenced with a review of one-hundred case studies; VM workshop reports. Involvement in twenty-five live workshops also gave an insight into the various applications of the VM methodology. The Common Issues across Project Stages The Three-Stage Project Model was used as a sorting tool to categorise the VM case studies. The focus in these case studies was the project issues. Grounded theory was used to generate a theory that may be applied to benefit future project work when implementing VM. The research accessed one-hundred case studies of which fifty contained an issues analysis. It is believed that the data available in the case studies was sufficiently rich to generate theory. The research involved exploring commonality of project issues in their project stages, however, it was also discovered that commonality of issues existed across project stages. This may be as a result of issues not being resolved at earlier stages in the project life cycle or issues being prevalent throughout the life of the project. An example of this is; cost certainty / limits being present at the formal planning stage and tactical design stage of the project. Another example is clients aspirations / perception being a common issue at both the implementation, project execution stage and tactical design. The majority of issues were discovered to be generic in nature and therefore could apply to any project. The high degree of commonality of issues across the project stages suggests that these are issues in most projects and should therefore be explored during the value management study in an effort to address project understanding and find solutions. The Predictive Framework The predictive framework for project issues is shown in Figure 2 which incorporates all the generic project issues under their categories.

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Budget / Cost / Funding / Finance

Funding limits / availabilityWhole life costingValue for moneyCost limits / certaintyAvailability labour / resourcesInputs materials Cost control / reportingFinancial gains, profit

Design

InnovationStandards / regulationsPlanning

Stakeholders / Community / Residents / Users / Customers / People / Personnel

InvolvementCommunications LiaisonCommunity relationshipsIdentify stakeholders Client feedback / aspirationsClients perceptionOpportunities / benefitsEmployment opportunities DisruptionHours of openingWorking hoursOrganisation

Information / feedback

Communications

Communications

Meetings and updates

Risks

Risk register profile / recording

Time / Programme

Start / lead-inCompletionDangers with regard to timeRepercussions / inadequate timeProgramme / planning / approvals Timescales

Interfaces / Project Management

Interfaces

Quality Control

Maintaining quality / quality controlPartnering / Teamworking / Relationships

Trust

Supply Chain

Long term relationshipsPartnering

Figure 2 The Predictive Framework of Generic Project Issues

The literature review on projects was used to determine if there were any similarities that supported the findings from the grounded theory study. It was discovered that there are many sources of reference in the literature that support the issues identified in the grounded theory study which form the predictive framework. Thus this validates the use of such a framework of project issues in a project environment. This framework may be used by value management facilitators when conducting an issues analysis in a workshop which will assist the facilitator by acting as a prompt list to prevent any issues being overlooked and in doing so will benefit the project team by ensuring all important issues have been identified for discussion and solutions found during the course of the VM workshop. Confirmation of Theory from the Action Research Workshop and Case Studies The purpose of the action research workshop was two-fold. It was used to validate and test the project issues that formed the predictive framework and to ascertain the successful use of VM in a local government project. The predictive framework shown in Figure 2 contained all the generic project issues derived from the grounded theory study which were considered to be applicable to any type of project regardless of sector. The predictive framework of generic project issues has been validated and tested with the issues resulting from the action research workshop on a local authority museum project and two case studies on local authority projects; the provision of early childhood services (case study 1) and a special school (case study 2).

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A correlation existed between the issues from the predictive framework and the issues identified from the action research study and two case studies. The action research study confirmed the reliability of the predictive framework and confirmed its use to support the identification of project issues. The Response to VM in the Action Research Workshop and Case Studies The successful use of VM was determined by asking the workshop commissioner (local authority champion) to comment following the distribution of the workshop report for the project. Comment had also been made following the two case studies which had been pre-recorded: Action Research Study: I found it a very useful exercise and we have already implemented some of the actions. And, on behalf of the team; We found the exercise extremely useful and have managed to reduce our costs considerably. Case Study 1: The Councils value for money head for the Childrens Services Review, saw Value Managements benefits in terms of its speed, the variety of issues and ideas explored, enthusiasm and ownership, project clarity and the substantial prospects of beneficial change (Garfitt and Sutcliffe, 2003). Case Study 2: I learnt a lot from the two days, and in hindsight, wished that you (VM facilitator) were 'on board' from the project concept/brief stage. These comments are very supportive of the VM methodology in local government projects and highlight its usefulness, speed, appreciation of application in the early project stages and the outcome of a VM study; action planning, exploration of a variety of issues and ideas, and a reduction of costs. From the research conducted using these three research methods; questionnaire survey, grounded theory and action research, it is evident that the research proposition can be confirmed; Value management is a service which can maximise the value of government services to achieve Best Value. The next section summarises these findings in addition to other supporting factors making the case for the application of VM in the public service sector. THE TEN SUPPORTING FACTORS OF APPLYING VM IN THE PUBLIC SERVICE SECTOR Ten specific elements of research ranging from analysis of the literature and the impact of government legislation to desk studies and action research on VM in the public service sector have been identified. These are; (1) Government Best Value legislation which has the same principles as VM, (2) the versatile applications of VM highlighting its use in the public service sector, (3) the tale from the literature which suggests further scope for VM application, (4) the proposed framework: The Three Wheels of Best Value which provides a logical framework incorporating a VM approach, (5) the identification of generic project issues identified in VM case studies suggesting the methodology can be used regardless of project type or sector, (6) Government application of VM highlighting its success, (7) exploration of public service functions using the VM methodology, (8)

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benefits of VM specific to the public service sector, (9) case study: a VM approach in service provision resulting in a positive outcome, and (10) post workshop interviews on the use of VM demonstrating its success. Government Best Value Legislation The limited application of VM to public service projects has presented an opportunity for further exploration at an opportune time in parallel with the Scottish Best Value legislation. Value management and Best Value have similar objectives; to promote continuous improvement and achieve the maximum value for the customer or client (DETR, 2000). Bone and Law (2000) outline that the Best Value policy is; a broadly-based value management policy. Value management has been using the term Best Value since its inception and therefore is familiar with the meaning of Best Value (Bone and Robertson, 2003). The Best Value literature, in particular the Scottish Local Government Act 2003 states that local authorities must make arrangements to secure Best Value. There is a duty to ensure that there is continuous improvement in the performance of the organisations functions and in securing Best Value, maintaining an appropriate balance among cost and quality and having regard to economy, efficiency, effectiveness, and equal opportunities requirements. The Act is not prescriptive and does not outline how local authorities should go about meeting the requirements of Best Value. In a study conducted by Wisniewski and Stewart (2001) it was discovered that councils would appreciate guidance on what is expected from a Best Value service. Hughes and McLaughlin (2001) state that; There is an increasing variety of means by which effective services can be provided and a variety of tools to use in assessing them and that any decision making tool provides support to the process. Value management enhances decision making and could be used as a tool to meet the requirements of the Act to achieve Best Value. The Versatile Applications of VM Bone and Robertson (2003) describe VM as; A multi-faceted discipline that can be applied to any aspect of public service where improved performance is needed or desired. There are varied VM applications across the construction industry that exemplify the versatility of VM. Implementation has been in life cycle costing terms to ensure maximum value across the life cycle of the built facility, in sustainability to confirm that sustainable issues are addressed, and in procurement to ensure selection of the best procurement route available. VM is also used to improve particular aspects of the project such as; operations and communications amongst the project team, partnering relationships, the development of bid proposals, to aid the briefing process in client organisations, and the exploration of scope for business development. This range of applications highlights the diversity of the VM methodology. It should be noted that the types of application outlined are not all specific to the construction industry and could be initiated elsewhere.

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The Tale from the Literature There is little knowledge of VM in the public sector. Some councils have used it successfully for a variety of projects but do not use it consistently (Gwynne, 2003). Garfitt and Sutcliffe (2003) state that whenever VM is applied in the public sector it delivers results as well as addresses one of the key aspects of Best Value which is challenge. VM is all about challenging why and how functions are performed to ensure that the desired functions are achieved. They support Gwynne (2003) in highlighting that; no public service has a fully-fledged value management programme. It is stated that despite good practice in some local authorities, this does not follow throughout the authority or transfer to another, making it difficult to illustrate the benefits of VM. A case is presented by Graham and Sulaiman (2000) for the use of VM to support Best Value. They note that the Value Management Standard (BS EN 12973:2000); is directly relevant to the Best Value and Value for Money Initiatives pursued by UK Government, and highlight that VM will support Best Value reviews and the development of programmes to achieve continuous improvement. This includes the development of procedures, target setting, the construction of performance indicators and the development of an action plan. This is supported by Bone and Robertson (2003) who also highlight that VM supports Best Value by ensuring an action plan is implemented as an output of the review. It is also suggested that the VM workshop for the Best Value review may be strategic, technical, operational, organisational or cross-cutting and may be adapted according to the service under consideration. Best Value is fundamentally about continuous improvement in all local authority services. The Employers Organisation states that; the use of effective high performance people management techniques is essential to continuous improvement of local services. Bone and Robertson (2003) believe that VM is the best tool for the job. Corrigan and Joyce (1997) cite Bohret (1993) who suggests that public managers need new, creative tools of public management to involve public participation. VM provides a structured approach with the use of various tools. It enhances challenge and provides an opportunity to be creative (Gwynne, 2003). Graham and Sulaiman (2000) highlight that tools & techniques specified in government literature to support Best Value in the public sector are commonly used in VM studies. It is evident that a decade later the public sector is in need of the structure of VM to manage their services effectively. The Proposed Framework: The Three Wheels of Best Value The proposed framework; The Three Wheels of Best Value, (Figure 3) was constructed from a logical review of tools and techniques currently used in local government with the addition of a VM approach which allows the project task team to evaluate all the possible options of service procurement ensuring that the best value option for service procurement is chosen.

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EXAPbenchmarking

goals & sys

PROJECTvalue

management

improvingservice

Coreservice

EFQM, Balance

d Scorecard

IIP, ISO9000, C

M, Six Sigma

EXAPbenchmarking

goals & sys

PROJECTvalue

management

improvingservice

Coreservice

EFQM, Balance

d Scorecard

IIP, ISO9000, C

M, Six Sigma

Figure 3 The Three Wheels of Best Value

The framework illustrated its measurability by outlining a three-stage process that adopts a variety of methods to assess service effectiveness. Quality schemes are used in wheel one to assess the authoritys score in achieving its objectives. In the event of a failure in service quality wheel two uses primarily benchmarking to monitor the service effectiveness in comparison to others. If there is a quick fix following benchmarking then action is taken and quality monitoring resumes. If a project is necessary to resolve the problem a wheel three VM study is held with the output of robust KPIs that are fed back into the authoritys core business in wheel one. The framework works as a continual measurement process to evaluate Best Value in the authority to ensure a practice of continual improvement. The three wheel approach to the measurement of the Best Value, distinguishes between the review of core business and the best value management of a project. Wheels 1 and 2 were derived from a logical analysis of Best Value literature. Wheel 3 resulted from an action research pilot study conducted with a Scottish local authority (Kelly and Graham, 2002). A desk study was also conducted using a mock example which illustrated that the VM methodology may be successfully applied for a service. This research concluded that a process entitled the Three Wheels of Best Value is a logical framework that is project based and may be applied in local government to permit a practice of continuous improvement and to provide a system that may be adopted as the foundation for the measurement of Best Value. The framework goes beyond performance indicators by providing an audit trail for review and a clear analysis of the methods used to obtain value for money in service provision. Value Management Project Issues in Case Studies VM is a project focused service used at specific intervention points or value opportunities within the project life cycle. Because VM relates to projects it was proposed that similar project issues relating to variables; time, cost and quality would arise in service sector projects in the same way as they do in construction and manufacturing projects. These issues include; start, completion, programme, funding, cost certainty, communications, stakeholders and innovation. This was found to be the case as reported in the research findings section of this paper.

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It is evident that if the same tools and techniques associated with VM are being used to extrapolate, analyse and evaluate the issues and these issues are similar regardless of project type then VM may be successfully applied anywhere there is a project whether in construction or in the service sector. Government Application of VM A literature review on the application of VM in the public service sector highlighted that VM is not a common application. Its consistency in use within the public sector varies as well as there being lack of knowledge of the results it can produce. A publication by Bone (1993) was initiated to introduce what Bone describes as a missing element in the public sector, which might be filled by VM. It is stated that the public sector will gain through reduced public spending and that the adoption of this method provides an opportunity and exemplifies the importance of public sector management awareness on what methods are available to increase the value of public services. A case for VM is made by Bone (1993) who describes it as an another tool for managers; an extremely powerful tool, arguably one of the most effective management methods, and one that has stood the test of time in many countries around the world since the 1950s. A case study is outlined by Bone which involves a building maintenance project in London that uses VM to increase public sector value. The workshop resulted in the production of 50 ideas which resulted in 400,000 potential savings. Bone states that the VM process facilitated; a more structured, creative and systematic way than they had been used to. Other public sector authorities that have implemented VM have used it for services such as hospital services which includes catering, cleaning, grounds maintenance, portering and linen, and engineering services. An example of benefits gained from the VM approach are a high degree of client satisfaction, improved functionality and cost savings ranging from 5-15% from studies conducted in Hong Kong (Fong, 1999). Barton and Pretorius (2003) outline the importance of integrating the stakeholder values into the value management of public sector projects in Hong Kong to allow for successful participation. Value in local authorities is a complex area, exemplified by Walsh (1991) who states that; It is not one of meeting service specifications, but of dealing with the shifting value structure of society. Public sector projects involve different stakeholder groups all with different values which have to be captured to allow for effective decision making. Barton and Pretorius outline that there will be multiple perceptions on what is useful, beneficial and important when considering public sector projects. It is suggested that capturing stakeholder values and using these to inform the decision making process is a difficult but necessary challenge that VM is capable of meeting to ensure the success of the project. Exploration of Public Service Functions The importance of project function is highlighted by Maddock (2002) who outlines a prime example of a project failing to meet the needs of the customers. Local people were consulted on what they wanted in their neighbourhood and elected for cleaner streets but instead got something completely different. This kind of government failure causes frustration and confusion on the reasons they were consulted in the first instance. The

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VM methodology ensures projects deliver what the customer wants by using various tools and techniques to bring out the project objectives. In particular, a tool called the Clients Value System is used to understand the levels of importance of the clients values pertaining to the project to ensure that the project team can understand and deliver a service or built facility that satisfies the projects objectives (Kelly et al., 2004). The literature review discovered a number of strategic functions of a public service which have been listed and sorted under the headers of strategic needs which are the necessary functions of a public service to ensure it is successful, and the strategic wants which are classed as the nice to haves (Table 1).

Table 1 Strategic Needs and Wants of a Public Service

Strategic Needs Strategic Wants Satisfy service needs Fill a service gap Satisfy a broad social need Respond to private sector failure Ensure the well-being of society Satisfy public preferences Maximise citizens utility Meet best interests of general public Achieve customer satisfaction Ensure equality Improve core services Promote differentiation Satisfy individual needs and desires The Benefits of VM in the Public Service Sector The attributes of VM as outlined in the VM standard are; better business decisions, increased effectiveness, improved products and services, enhanced competitiveness, a common value culture, improved internal communication, multidisciplinary and multitask teamwork, and decisions which can be supported by all stakeholders (BS EN 12973: 2000). Other authors in the public sector field outline the following; effective engagement of staff and stakeholders, staff ownership, and a clear focused improvement action plan (Gwynne, 2003). Pooling of ideas, variety of issues explored, project clarity, clear objectives, shorter and sharper reviews, and more cost effective services (Garfitt and Sutcliffe, 2003). Empowered staff, and encouragement of innovation and change were viewed by Bone and Robertson (2003) as two attributes of VM. These are general benefits of the use of VM however VM can also specifically support the public sector in a number of areas that relate to the requirements of Best Value, these are shown in Table 2. It is evident from the table that the benefits of VM in the public sector are extensive.

Table 2 The Benefits of VM in the Public Service Sector

Benefits

Best Value Terminology / Keyword(s)

Development of local authority specific key performance indicators that are linked to service goals and objectives

KPIs

Determining the customers values of a service (the local public) and delivering what the customer wants

Values

Addresses the concepts of Best Value by achieving value for money and continuous improvement

Continuous Improvement

Makes best use of local authority personnel by ensuring adequate stakeholder representation Stakeholder Representation

Explores and prioritises all possible options for service delivery Options

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Details action plans for service project Action Plan Promotes ownership of service plans, a principle of Best Value Ownership Ease of Performance Management and Planning (PMP) by means of action planning PMP Assists in annual Best Value Performance Planning (BVPP) BVPP Provides a logical route to achieve Best Value Logical Route Provides an audit trail that can be communicated to service personnel Audit Trail Encourages knowledge sharing by involving front-line staff and public managers Knowledge

Sharing Case Study: A VM Approach in Service Provision In the VM case study used in addition to the action research to confirm the theory; a Best Value Review of early childhood services conducted in 1999 (Kelly and Graham, 2002) it was stated by the VM facilitator that; This is practical proof, if ever it was needed, that value management works as effectively in the public services as it does in industry and construction (Garfitt and Sutcliffe, 2003). The general consensus for the VM workshop was that it was a success. Participant comments made at the workshop close were: Today has brought new perspectives Key issues have been identified Phenomenal progress today The knowledge lead today will getBest Value Crystallised thoughts The VM model is outstandingly effective We can examine the whole service in a way that bears scrutiny We have achieved the scoping stage of the strategic Best Value Review Work which might take two or three months has been achieved within one week

(Graham, 2000) These comments highlight the positive response to the VM approach used in local authority service provision. Post Workshop Interviews on the Use of VM Other evidence are supporting comments made during post workshop interviews on the success of VM workshops (Table 3) which was part of a separate study conducted by the author. Although the workshops were construction-related it highlights participants experience of the VM. The study involved three workshops in succession where VM tools and techniques were applied (Hunter and Kelly, 2005). The comments have been extrapolated unaltered from the interview record sheets and have been grouped under headers chosen by the author. Some of the comments relate to the use of VM workshop experiences as a reference or benchmark for future projects which indicates its success.

Table 3 Comments on use of Value Management Workshops (Source: Post Workshop Interviews)

General Comments The workshops were useful and immensely valuable. I was taken on by the whole idea of workshops. I found it valuable. I found them very, very good. We got to know each other as individuals as well as team members. The workshop opened up honesty. We will continue to use through various phases of this project.

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There is a problem for a lot of people to have a whole day workshop. I think its worth it. The use of a facilitator brings together a vast range of ideas from which we can select the best way of going about the project. A Benchmark The workshops provided guidelines for progressing projects. We will use as a templatemore knowledge and experience has been gained. This will be used as a past example to be brought forward when it is relevant. Because of the first one I have been involved in, I will use it to benchmark. I will use it as a reference. I will take points from the reports that were beneficial and I will use these in other projects. I will use as a way of explaining to clients how this project worked if it is successful it will be used as a reference and as background material. Successful Structure There was an organised structure to the way this project has been dealt with, whereas others have not been as organised and things get forgotten about. A successful format. The techniques are so logical and work well; I can see the practicality of it. I like VM because its so clear and logical with clear answers, it doesnt involve a lot of theory and people can see whats happening. THE RESEARCH OUTPUTS There were three outputs of this doctoral research; (1) the predictive framework of generic project issues, (2) the Service Sector Three-Stage Project Model and (3) the Three Wheels of Best Value. Figure 5 illustrates the outputs from the three key areas explored. The value and benefits of these are summarised below.

Best Value

Value ManagementProjects

Recommendations for local government in adopting a VM

approach

The Three Wheels of Best Value

Three Stage Project Model

Predictive Issues Framework

Figure 5 The Research Outputs from the Three Key Areas

(1) The Predictive Framework of Generic Project Issues The research in project issues using grounded theory concluded that similar issues are recurrent at similar project stages irrespective of project type. However, these issues also appeared at different project stages suggesting that the forum for issues identification has not been available and issues have not been addressed earlier on in the project life cycle. Generic issues were identified which are those that apply to any type of project whether construction or service related. The generic nature of the project issues allows VM to be implemented to enhance the value of projects. The predictive framework (Figure 2) may be used in future

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VM studies to assist the team in extrapolating the likely issues at the particular project stage and for use by the facilitator in leading the project team. (2) The Service Sector Three-Stage Project Model The research behind the Three-Stage Project Model explored familiarity with project stages, identified what stages problems existed, and the project stages where more time was required which resulted in a revised service model which included four VM opportunity points (Figure 1). When considering a VM study, local authorities can use this model to identify the best stages in the project to apply VM. Local authorities may also use the model when involved in project work to review the stages involved in a generic project. (3) The Three Wheels of Best Value This research concluded that a process entitled the Three Wheels of Best Value (Figure 3) is a logical framework that may be applied in local government to permit a practice of continuous improvement and to provide a system that may be adopted as the foundation for the measurement of Best Value. The framework goes beyond performance indicators by providing an audit trail for review and a clear analysis of the methods used to obtain value for money in service provision. Wheel three of the framework using a VM approach allows the project task team to evaluate all the possible options of service procurement ensuring that the Best Value option for service procurement is chosen. SUMMARY AND CONCLUSIONS Ten supporting factors have been identified in the research and present a well founded case for the application of VM in local government to support Best Value. The ten areas and their supporting capabilities are: 1. The Best Value legislation has the same goal as VM; to achieve the maximum value

for the customer or client and therefore, VM can be used as a local government tool to ensure this is achieved.

2. VM is a versatile management tool which is evident in its application to different types of project in the construction industry. These types of application are also familiar with the public sector, such as; partnering relationships and business development, highlighting that the VM methodology can be used across a range of projects regardless of sector.

3. The literature draws a strong correlation between the purpose of VM and Best Value and it is evident that VM is an excellent public sector tool to plug the gaps in Best Value service provision identified in the literature which include option appraisal, stakeholder representation and action planning.

4. The framework; The Three Wheels of Best Value developed for local authorities to comply with the Best Value initiative suggests the successful inclusion of VM alongside tools that would typically be used in a Best Value Review to lead the local authority to a number of service options to be evaluated to achieve Best Value.

5. Commonality of project issues discovered from the VM case studies identified in a grounded theory study were discovered to be generic and therefore, applicable to any type of project. This proves that the VM methodology can be used to address these issues regardless of project background. A project framework; The Three-

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Stage Project Model outlining the VM application points in the project life cycle has been developed as a result of the questionnaire findings to support local government in the management of their projects.

6. The application of VM in government has resulted in benefits such as; client satisfaction, improved functionality, cost savings and integrating stakeholder values which coincides with Best Value and illustrates how Best Value can be achieved through use of VM.

7. The exploration of public sector function can be achieved using the VM function focused methodology to ensure that the purpose of the project is thoroughly explored to meet the requirements of the customer.

8. The VM benefits specific to public sector service provision such as the development of KPIs, the exploration of public sector values and the development of performance plans have been identified from the review of literature.

9. In terms of practical research outside the scope of the literature, a case study using VM for a public sector service resulted in a positive response obtained from comments made by the project participants in local government. This case study demonstrates that the application of VM was successful and a positive outcome could be the case in other local government projects.

10. Post workshop interviews in a construction focused study also highlighted a positive perception of the VM methodology and what aspects of the VM process were most helpful.

The three streams of research in Best Value, value management, and projects have shown that VM can be successfully applied in local government. Action research has confirmed this although it should be ensured that the review of Best Value in a particular service area is properly structured as a project for VM to be successful. The Three Wheels Framework includes a VM approach and tools and techniques already used in local authorities to achieve Best Value, and The Service Sector Three-Stage Project Model is a generic model where VM opportunities for a service have been highlighted to improve project practice within local authorities. The use of grounded theory has derived a theory from the issues which identified that similar issues regardless of project type re-occur and therefore the same tools and techniques associated with VM may be applied. The questionnaire has confirmed the research work in terms of the tools and techniques used in wheels two and three of the Three Wheels framework and the project stages identified in the Three-Stage Project Model. The action research study and case studies highlighted that VM can be successfully applied to a local government project and the desk study research on a local authority service project explored the practical use of such a framework and confirmed its successful use. Overall, the research has contributed three research outputs to the field of knowledge and has answered the research proposition by concluding that VM is a management tool of great value in local governments quest to achieve Best Value. Value management is in its early stages of conception in local government and it is hoped that this work will highlight the opportunities of using VM and prescribe a logical framework which can be adopted for compliance with the statutory duty of Best Value.

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REFERENCES Barton, R and Pretorius, F (2003), Managing Values: Challenge for Public Projects in Hong Kong, Hong Kong Institute of Value Management (HKIVM) 6th International Conference, November 2003. Bone, C (1993), Value Management in the Public Sector through Value Analysis and B.P.R, Longman Group, UK. Bone, C and Law, M (2000), Value Management The Best Practice Approach for Maximising Productivity, Performance and Value for Money, Management Notes, DTI (Department of Trade and Industry). Bone and Robertson (2003), Value Management, Delivering Service Improvement, COSLA, Employers Organisation. BS EN 12973: 2000, Value Management, British Standards. Corrigan, P and Joyce, P (1997), Reconstructing Public Management, A New Responsibility for the Public and a Case Study of Local Government, International Journal of Public Sector Management, Vol. 10, No. 6, pp417-432, MCB University Press. DETR (2000), Department of the Environment, Transport and the Regions, now the ODPM (Office of the Deputy Prime Minister), Guide to Quality Schemes and Best Value, DETR. Fong, P. S (1999), Organisational Knowledge of Responses of Public Sector Clients Towards Value Management, The International Journal of Public Sector Management, Vol. 12, No. 5, pp. 445-454. Garfitt, P and Sutcliffe, J (2003), Value Management in the Public Sector, Value, The Institute of Value Management, Volume 12, Issue 3, pp21-25. Graham, M (2000), The Measurement of Best Value: A Pilot Study, Introducing a Value Management Trial at West Dunbartonshire, Unpublished Report on Value Management Workshop for Early Childhood Services held on 8th March 2000. Graham, M and Sulaiman, J (2000), BS EN 12973: 2000 Value Management and its Interface with Best Value, Quality Systems and other Initiatives, Unpublished paper presented at The Centre for the Built Environment, 23-25 May 2000. Gwynne, M (2003), When BV met VM: Value Management in Local Government, Value, The Institute of Value Management, Volume 12, Issue 3, pp12-14. Hunter, K and Kelly, J (2005), Value Management Workshops and Partnering Conundrums, Paper in press, Journal of Construction Procurement, Nottingham. Hughes, M. and McLaughlin, K. (2001), Best Value, Making Choices, Scottish Executive. Kelly, J., Male, S and Graham, D (2004), Value Management of Construction Projects, Blackwell Publishing. Kelly, J. & Graham, M., (2000), The Measurement of Best Value, COBRA (Construction and Building Research Conference) Greenwich, UK. Maddock, S (2002), Making Modernisation Work, New Narratives, Change Strategies and People Management in the Public Sector, The International Journal of Public Sector Management, Vol. 15, No. 1, 2002, pp.13-43., MCB UP Limited.

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Nicholas, J. M. (2001), Project Management for Business and Technology, Principles and Practice, Second Edition. Walsh, K (1991), Quality and Public Services, Public Administration, Volume 69 (503-514). Wisniewski, M and Stewart, D (2001), Using the Statutory Audit to Support Continuous Improvement in Scottish Local Authorities, The International Journal of Public Sector Management, Vol. 14, No. 7, pp.540-555, MCB University Press. Woodhead, R. M. (2000), Investigation of the early stages of project formulation, Facilities, Volume 18, Number 13/14, pp.524-534.

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The literature review examined three key areas which were of fundamental importance to understanding the relationship between Best Value, value management and projects. A robust methodology comprising three key research methods was constructed to answer the research proposition; Value management is a service which can maximise the value of government services to achieve Best Value. The synthesis of the literature explored the corroboration between Best Value, VM and projects and deduced the following; (1) VM is a project focussed services that relies on interventions or value opportunities within the project life cycle, (2) a local authority will instigate projects to ensure continuous improvement to satisfy Best Value, and (3) VM and Best Value have the same objectives, to achieve maximum value for the customer or client. Findings from the Scottish Local Authority Questionnaire Survey Findings from the Grounded Theory Study The Common Issues across Project Stages The Predictive Framework Confirmation of Theory from the Action Research Workshop and Case Studies The Response to VM in the Action Research Workshop and Case Studies

THE TEN SUPPORTING FACTORS OF APPLYING VM IN THE PUBLIC SERVICE SECTOR Government Best Value Legislation The Versatile Applications of VM The Tale from the Literature The Proposed Framework: The Three Wheels of Best Value Value Management Project Issues in Case Studies Government Application of VM Exploration of Public Service Functions The Benefits of VM in the Public Service Sector Case Study: A VM Approach in Service Provision Post Workshop Interviews on the Use of VM

THE RESEARCH OUTPUTS

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