Value for Money
Economy, Efficiency, Effectiveness
Value for Money (VFM) is often referred to as the 3E's - Economy, Efficiency and Effectiveness.
• Economy - minimising the cost of resources ('doing things at a low price')
• Efficiency - performing tasks with reasonable effort ('doing things the right way')
• Effectiveness - the extent to which objectives are met ('doing the right things').
To summarise, Value for Money is about providing services that are of the right quality, level and cost that reflect the needs and priority of customers, council taxpayers and the wider community.
The Council always endeavours to ensure that the services it provides are good value for money and does so in a number of ways, primarily through financial management, good procurement practices, business planning and periodic reviews of services.
The Council has recently introduced a specific mothodology for value for money which all of the Council's services will be reviewed against over a period of time. The new VFM methodology is currently being tested on a number of reviews including aspects of Leisure Services, all services within the Governance Directorate and the grant paid to the Citizens Advice Bureau.
All services are to be given a preliminary VFM score and this will be used to determine how quickly they will be reviewed. Work on VFM is being championed by the Director of Governance, who is chairing a Project Action Team that will oversee the work on VFM.
The Council's arrangements for ensuring VFM are assessed annually by the Audit Commission as part of the Use of Resources Assessment. Currently the Council scores a 2 (out of 5) for this assessment but is aiming to raise this to a 3 over the next couple of years.
For the last three years the Council has been required by the Government to deliver 2.5% efficiency savings each year as part of the Gershon Agenda. The Government has been reviewing this and in the future the Council will be expected to achieve 3% efficiency savings; this is not a formal target but will be built into the funding given to the Council. The Council will be expected to report on it's efficiency savings as one of the new National Performance Indicators. The work planned corporately for Value for Money will form one of the Council's mechanisms for identifying efficiency savings. Much of the work done through Delivering Change (part of the Council's budget setting process) also contributes to the identification of efficiency savings. The corporate VFM agenda will be closely aligned to the Delivering Change process in the future.