PFM Board

Medium Term Expenditure Framework => Public expenditure management => Topic started by: Napodano on February 22, 2012, 10:25:21 GMT

Title: Value for Money explained in the context of public investment
Post by: Napodano on February 22, 2012, 10:25:21 GMT

Value for Money consists of three components:
1. Economy
2. Efficiency
3. Effectiveness

For an explanaition watch the PowerPoint video at the PFM Board Video Sessions
http://www.youtube.com/user/napodano?feature=mhee#p/c/51C9BA2BAB0F6227/3/ebnDksMuVb0

Attached is also a brochure issued by the UK Government on best practice for Value for Money in complex procurements.

Title: Re: Value for Money explained in the context of public investment
Post by: STONE on February 22, 2012, 17:45:12 GMT

I always thought explaining the three Es was challenging!  The brochure gives this definition of VFM:

"Value for money (VfM) is defined as “the optimum combination of whole-life cost and quality (or fitness for purpose) to meet the user’s requirement”. This is rarely synonymous with lowest price."

Title: Re: Value for Money explained in the context of public investment
Post by: harnett on February 22, 2012, 22:24:36 GMT

Bloody economists - Value for money is if it makes you happy (or happier than if you hadn't spent it for you opportunity costers out there!).  End of (you can even ask Reg).  Om Mani Padme Hum.

Title: Re: Value for Money explained in the context of public investment
Post by: atseacliff on February 24, 2012, 10:34:45 GMT

ICAI reckon their are 4 Es in the context of Aid Money - the Table on page 4 explains.  The addition of Equity makes things a whole lot fuzzier doesn't it?