Value for Money (VfM)
Overview
Value for Money (VfM) in DFID’s programme means:
We maximise the impact of each pound spent to improve poor people’s lives.
"VFM is a set of assessment practices for appraisal, review or evaluation of systems and functions as well as initiatives, schemes and projects that are time bound. The development of these practices, following economic policy imperatives, has traditionally been led by the auditing and accountancy professions. VFM is now found not only amongst a range of internal and external controls, procedures and assessments for financial and resource management (for example risk management, fraud and corruption, audits), but also forms part of performance management systems and processes in organizations. Hence there are many and necessary links to results-based management, monitoring activity, impact assessment and evaluations."
3Es (and a CE)
Economy
Are we or our agents buying inputs of the appropriate quality at the right price? (Inputs are things such as staff, consultants, raw materials and capital that are used to produce outputs)
Efficiency
How well do we or our agents convert inputs into outputs? (outputs are results delivered by us or our agents to an external party. We or our agents exercise strong control over the quality and quantity of outputs)
Effectiveness
How well are the outputs from an intervention achieving the desired outcome on poverty reduction? (Note that in contrast to outputs, we or our agents do not exercise direct control over outcomes)
Cost-effectiveness
How much impact on poverty reduction does an intervention achieve relative to the inputs that we or our agents invest in it?
Further Information
- VfM Approach by DFID (2011) (very much worth a read!)
- VfM and Impacts in Governance and Conflict Projects
Updates
- "Measuring the intangible" VfM Symposium held in London.
- Upcoming VfM Conference on the 19th and 20th of September 2013 in Bangkok
