Efficiency and value for money
Increasing financial pressure on levels of public spending, the credit crunch and the resulting economic downturn, are increasingly putting purchasers and deliverers of services under pressure to achieve efficiency and value for money. Increasing food and fuel prices and rising unemployment also push this agenda, with people having less ‘free’ income than in previous months. The government is also responding to public perceptions that the increased investment in public services has not delivered expected or desired improvements and that money is being wasted.
What are the implications?
- Financial pressures can lead to procurement practices that favour economies of scale, leading to further polarisation of the sector
- Increase in private sector organisations winning contracts, and then sub-contracting to VCOs.
- The rationalisation of funding streams and delivery agencies
- Pressure to work in partnership or collaboration with other organisations.
- Increased competition for funds and higher expectations of evidence of value and impact (see increased expectations of evidence)
- Increased performance measurement by funders.
Moving forward
Increased competition for funds may mean your organisation has to work harder to demonstrate the outcomes of their work and the ‘distinctive value’ of their services, particularly when competing with private sector providers for funding.
- Do you have good systems in place to assess your outcomes, and the broader value you create (social, economic and environmental)?
- Does your organisation need to improve how it assesses and demonstrates the impact it makes?
- How can you develop your negotiating skills to improve your discussions with funders (potential and actual), and your chances of securing a good deal?
An increased emphasis on value for money and efficiency may lead to a rationalisation of funding streams favouring larger organisations that can offer economies of scale.
- What strategies can your organisation put in place now to manage potential future changes in funding?
- Can you diversify your income sources or work in partnership with other organisations?
Being clear about what you offer commissioners could put you at a competitive advantage.
- You may wish to think about your position in relation to other players – do you want to stay small and cover niche markets, or work towards targeting high volumes of clients to benefit from economies of scale?
- Could working in partnership or collaboration with other VCOs help you to secure funds in the future?
Want to know more?
Re-thinking efficiency and value
Published by: NCVO
Date: 2006
Format: PDF
What is it? An article summarising the key themes of ‘efficiency’ and ‘value’ as discussed at the Sustainable Funding Project’s first Annual Public Service Delivery Network Conference.
How useful is this? This informative article looks at changes in understanding of the terms ‘good value’ and ‘efficiency’, and discusses revising their meaning in light of the ‘added value’ that voluntary and community organisations provide.
Other comments:
Measuring impact – A guide to resources
Published by: NCVO
Date: 2002
Format: Web
What is it? This guide provides an introduction and details of further resources for VCOs interested in impact and its measurement.
How useful is this? This provides a useful starting point for VCOs who want or need to demonstrate their impact. Chapter two looks at why VCOs may be motivated to measure their impact. Chapter three defines impact and describes how this term relates to the more widely used concepts of outputs and outcomes. Chapter four expands on the problems and limitations of impact measurement and aims to help VCOs to be realistic about what can be achieved. Chapter five looks at a selection of tools that have been developed for the measurement of impact. The final chapter includes a useful list of resources for understanding and implementing impact measurement including step-by-step guides.
Other comments: The companion to this volume, Measuring impact – Case studies of impact assessment in small and medium-sized voluntary organisations, reviews the findings and lessons from four different approaches to impact assessment, and makes recommendations for those wishing to engage in similar work.
A Strategy for Performance Improvement for the Voluntary and Community Sector
Published by: Centre for Voluntary Action Research, Aston University – an academic research centre
Date: 2003
Format: PDF
What is it? A scoping paper providinga starting point for the development of the Strategy for Performance Improvement for the VCS.
How useful is this? This report offers a critical perspective on the concept of ‘performance improvement’ and its application in the VCS. Part One sets out the wider context within which performance improvement has gained prominence. Part Two discusses a range of theories and concepts in performance improvement, before moving on to explore some of the challenges for organisations. Part Three highlights key points to be considered in developing and writing the Performance Improvement Strategy for the VCS.
Other comments:
Discuss
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