Value for Money
Principles of VFM
Put simply, the principle of VfM can be stated as ‘to make the best use of the resources we have available in order to achieve the desired output and maximise the benefit achieved from that output’.
HEFCE refined its perspective on VfM in 2008, to stress that for value for money to be achieved an institution needs to be as effective as it can be in its use of public money.
Earlier guidance had noted that when considering whether VFM has been satisfactorily achieved or not, it should not simply be a measure of the cost of goods and services, but also take account of the mix of quality, cost, resource use, fitness for purpose, timeliness, and convenience to judge whether or not, together, they constitute good value.
Achieving VFM is also often described in terms of the 'three Es' - economy, efficiency and effectiveness. The definition of the three Es approved by the Value for Money Committee is as follows:
- Economy - careful use of resources to save expense, time or effort.
- Efficiency - delivering the same level of service for less cost, time or effort.
- Effectiveness - delivering a better service or getting a better return for the same amount of expense, time or effort.
HEFCE goes on to suggest that information which reflects an institution’s performance is information that already reflects the achievement of VFM. Some institutions will have an explicit performance management system. Effective performance management should integrate planning, review, financial management and improvement systems to enable management and members to make informed decisions for the improvement of services.
Value for Money sub-committee
The Value for Money sub-committee has been set up to champion value for money across the College. Terms of reference can be found here http://www.gold.ac.uk/committees/tor/smt/vfm-group/
As part of the budget setting round for 2011-12, we asked departments whether there were any departmental activities that they would highlight as examples of providing excellent value for money? We received a number of responses, extracts from which are included below:
“Currently our laboratories provide the best value for money in the Department’s operation. They are not overly expensive to run, and they provide a great deal of technical teaching and support to students at a relatively low cost. They are absolutely central to our offer, and crucial to our continued success in the new funding environment.”
“We are currently undertaking a review of printing/copying in the department with a view to have a more strategic approach to both the hardware and consumables used, thereby saving funds.”“The areas where we are strongest and where we have made progress are:
- Quality of our induction programmes (offered in September and January)
- High quality administrative support and advice
- Addressing ‘problem cases’ and finding solutions”
“We have yet to really harness the potential and creativity of our post graduate research for the development of our intellectual and research culture.”
“Our programme structures have been mapped out to ensure that cost-effective modules are balanced against the more expensive ones. Financial, contractual and academic planning are fully integrated when we compile our course options to be offered to students for the forthcoming academic session. However, detailed course and programme-specific cost estimates would be of great help to the Department in improving this process.”
“Our MA courses in particular are organized such that core courses aside, they make very good use of our teaching resources by utilizing the specialist interests and expertise of academic staff to maximize both undergraduate and postgraduate option choices. We continue to focus on ‘efficiencies’, and are currently in the process of reorganizing some of our MA courses so that they are offered as joint 3rd year/MA courses, to increase student options without increasing use of resources and staff time. The Department will also in the coming year discuss the possibility of reorganizing 2nd and 3rd year teaching in order to again widen student choice through efficiencies.”
“We have five MSc programmes that bring in revenue, but in order to ensure value for money, they share a great deal of core courses; such that, each one shares at least 40% of its courses with another MSc and/or with a final year BSc course.”
“Our strand-based approach to MA programme design enables us to run more specialised MA offerings that recruit fewer students in a way that remains cost-effective for us, but provides great value of money for students.”
Value for Money Policy www.gold.ac.uk/media/vfm-policy.pdf
Value for Money Methodology http://www.gold.ac.uk/media/vfm-methodology.pdf
HEFCE guidance http://www.hefce.ac.uk/finance/assurance/guide/strategy.asp
Content last modified: 28 Jun 2011