Value for Money Jackie Grannell

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Value for MoneyJackie Grannell
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Daily Value for Money Judgements

• Which Brand?
• Its a bargain!

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Value for Money - A definition

• the optimum combination of whole life costs and
  benefits to meet the customers requirement

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Value for Money

• Is not the cheapest
• Is the cheapest way of delivering a product or
  service and having the required outcomes to the
  maximum quality

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The 3 Es

• Value for Money has 3 components
• Economy the price paid for what goes into a
  service
• Efficiency how much you get out in relation to
  what is put in
• Effectiveness a measure of the impact achieved,
  primarily associated with outcomes for residents

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What are efficiencies?

• savings or gains
• Cashable
• actual cash to be used for other things
• Non-cashable
• no extra money, but better services or more for
  the same amount

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• Costs Inputs Outputs
  Outcomes

EFFECTIVENESS
EFFICIENCY
ECONOMY
What did we put in time and money?
What did we do?
What were the changes and as result of our
spending and activity?
What did we produce?
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VFM and Regulation
Happy Housing Ltd Annual report Financial
Statements Company No. 12345 HCA No. 666

• Board are required to produce a VFM statement in
  their annual report and financial statements

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VFM and Regualtion

• Inputs
• Supplier costs (procurement)
• Overheads e.g. offices
• Staffing costs
• Borrowing costs

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VFM and Regulation

• Outputs and Outcomes
• Management cost per unit
• Cost of responsive repairs per unit
• Decent homes
• Re-let time
• Resident satisfaction with services
• Resident satisfaction with repair service
• Resident satisfaction that rent is value for
  money
• New homes?
• Social investment in a non-housing project?

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Exercise - Assessing Value for Money

• Everyday household items
• You have 15 minutes to carry out the exercise
• Be prepared to feedback!

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Optimum Balance

• VFM is high when there is an optimum balance
  between relatively low costs, high productivity
  and successful outcomes

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• Quality in a product or service is not what the
  supplier puts in. It is what the customer gets
  out and is willing to pay forcustomers pay only
  for what is of use to them and gives them value.
  Nothing else constitutes quality
• Peter Drucker
• Management Guru