Validus Articles

Value for Money : but to do what?

As the drive for efficiency and value for money continues, more high-level tools are being tabled as frameworks and guides for action, like the Audit Commission's Value for Money Profile Tool and the CIPFA Financial Management Model. These tools however present real problems.

There is a drive (quite rightly) for engaging communities and understanding its priorities. However, communities are not homogenous but constitute different groups with differing needs and priorities. A current driving principle is customising or tailoring high quality services to meet the needs of these individual stakeholder groups, ultimately to meet the needs of the individual. (The drive for individually based treatment within the NHS is a good example.)

But, and here is where the real challenge for Local Authority managers and members lies, increased customisation of services means increased variety in the means of delivery. In manufacturing, increased variety to consumers has been provided through targeted investment in multi-purpose machining centres and robotics where variety is carefully managed through advanced scheduling algorithms and backed up with strict quality regimes such as six-sigma. There is also the ability to charge more for non-standard product offerings. But how does this translate into delivering public services?

Increased variety in service environments by definition means more complexity within business processes, supporting IT systems, the skills and competencies required of staff where people are still the primary means of delivery. Increased variety leads to increased costs.

Councils are under increasing scrutiny and pressure to provide improved efficiency and tangible value for money savings on the one hand, whilst providing inclusive, tailored, quality services to increasingly diverse community groups on the other. Because resources are finite this ultimately this means options and choices, but these need to be informed choices.

That is why Validus has developed their Efficiency and Value for Money modelling capability. This enables managers, staff and members to examine in detail, what is currently happening within their own Local Authority and where value for money is being won or lost. Examining the detail is the route to revealing where significant opportunities for improvement lie and the impacts and opportunities for balancing diverse community needs, efficiency and value for money. The detailed data generated supports the development of strategic options, choices and resultant impacts on efficiency and value for money, making the whole process highly visible and transparent.

All too often centrally based 'support' mechanisms and workshops 'talk-the-talk' at a high level but fail to 'walk-the- talk' at either the high and more importantly at the operational service delivery level. This does not help in supporting management choices that have to be made regarding service delivery.

Summary

Managing service delivery will continue to become more complex as the expectations of increasingly diverse communities increase; the drive for efficiency and value for money will continue; the way to understanding and managing strategic options, choices and impacts on efficiency and value for money needs to be based on a thorough understanding of the detail.

Once the options and informed choices have been made, implementation and delivery then requires: focused effort – doing the right things in support of strategic choices – doing them well – at the day to day, front line of service delivery; having a well motivated and workforce with a genuine commitment to service delivery, often in challenging circumstances; training people to a high standard to ensure flexibility and best use of resources available; retaining high quality people – recognising their real worth and the high cost of high staff turnover; 'weeding out' areas of poor performance.

The Validus Efficiency and Value for Money model provides a structured and transparent means of both assessing the current status, at a detailed level, then delivering significant improvements.