Value for Money (VFM)

Linda Levin

What does VFM mean to you?

The 3 ‘E’s• Economy

– 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

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

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

Specific expectations• 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

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

o 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

o 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